Most financial planning experts agree that it’s best to start early when teaching children about money. If there’s one thing that Filipinos can do now to raise the country’s savings rate in the future, this is it. One child at a time.
Allowance appears to be the most popular tool to do this. INQUIRER.net’s personal finance article today says money management is conspicuously absent from most school curricula, which means lessons on financial literacy should begin at home. Citibank answers this question from a reader:
My husband and I set the allowance for our eldest child, now in 2nd year high school. We wanted her to have enough money so she won’t go hungry during the day, but not too much that she can buy anything on sight. Just one month after school started, our daughter is complaining that her allowance is “too small”. Now, we’re thinking maybe she should just bring “baon” and we’ll cut her allowance. What do you suggest? – Benny C.
The article says finding the right level of allowance is crucial. So is not missing out on children’s “pay day”. Be consistent. Teach them about the ground rules on what to buy, what is the ideal amount to save, and how to track their expenses. Most of all learn how to be flexible.
When it comes to whether paying children for doing chores, on the other hand, there are different schools of thought. Some say that’s bribery; others believe that’s letting them experience reward for hard work.
Teaching children how to work hard cannot be done with talkies. They have to experience it, they have to get their hands all dirty and sweaty to learn the lesson. This is a life value that we all want our children to have in their genes.
Why not take the path in the middle? There are chores that they should do because they care about the family. These are done out of love and not because they would get paid. These might include washing the dishes, cleaning their rooms, straightening the closets, or taking out the trash.
Designate which chores they can do to earn a salary. Say, repainting a portion of the house (please use child-friendly paint!), restoring wood furniture, or doing a major garden clean-up. Perhaps the rule should be chores that keep the money in the family instead of paying someone else to do it.
Keep in mind the golden lessons they should learn: responsibility, the value of hard work, that money is a limited resource and should thus be handled wisely, and when they do handle it wisely, it can bring happiness :-).
August 23rd, 2007 at 11:52 am
i used to get paid for taking out “uban” from my dad when i was a kid. my rate was 10 centavos apiece.
haha.
August 21st, 2007 at 4:28 pm
I don’t think this is a good idea. Chores are training for kids so that when they grow up they can live independently. If you designate a chore that will earn them money chances are they will ask for more chores that earn money and forget about their regular chores, or use it as an excuse so that the kid can do away with regular chores. I know most of us have chores that we like the least ( I don’t like doing the dishes ). Teach him instead to do business of his own (renting his comics, etc) or have him help in your family business and then you can pay him.
August 21st, 2007 at 4:19 pm
we don’t pay our children to do chores. our 8 yr old makes a lot of money selling his artworks to classmates. some kids even owe him money. we had to tell him not to sell too much. the poor kids may be giving him their money instead of buying food. we don’t teach them. they just do it on their own.
August 21st, 2007 at 12:27 pm
Another suggestion is have them work part-time or for free for a very successful business man. The lessons he/she will learn will be worth it even if its free.