Money can sometimes cause friction and arguments between parents and their children. How much, when and how to give your children money can be a hard road to navigate and can lead to breakdowns in communication, complaining and even the odd teenage tantrum. So to help calm stormy waters when talking about money with children, here are my top five common causes of parent-child money arguments and some tips on how to resolve them…
1. "All my friends get more pocket money than me"
Every family does things differently when it comes to pocket money. Talking to other parents may give you an idea of how much other children are getting or you can use the internet to find out the average national statistics. However, it doesn’t mean you have to match it. You should do what is right for you and your financial situation. My top tip is to involve your children in these decisions to make them feel empowered and teach them valuable lessons in financial education and planning.
2. Running out of money in the summer holidays
We all know summer holidays can be long and filled with exciting (and often expensive) activities, leading to children over-spending and running out of pocket money. This can be resolved by giving your children a chance to earn extra money through rewarding the completion of chores and tasks. Using goHenry you can set tasks online for each child and make one-off top ups as required. Rewarding children for work, rather than just giving out extra cash is an important life lesson in terms of learning to earn, save and spend.
3. "Everybody else has got one"
Whether it’s the latest mobile phone or pair of trainers, peer pressure and comparison can be the trigger for many family arguments with children feeling they need to keep up with their classmates and parents feeling pressurised into spending more than they would like. A great solution to this is to set savings goals with your children so they can save towards bigger purchases. Setting goals is fundamental to learning the value of money and saving and also creates a sense of achievement when that purchase is made.
4. "I’m too grown up for pocket money"
An allowance is a great way to teach older children and teenagers how to live within a budget by providing them with a regular sum of money. By moving from weekly pocket money to a monthly allowance, you will increase their sense of responsibility, teach them about the importance of financial planning, and align cash flow with what they will experience in later life at work.
5. The "I need a credit card" debate
Parents should be extremely cautious about making their own credit cards available to their children, as they don’t provide a structure for learning about money in a safe and controlled environment. A pre-paid debit card that is the responsibility of the child provides a safer and more manageable solution. With the goHenry Pre-paid Visa Card you can control exactly how and where the card can be used, set weekly or single transaction spending limits; and limit or disallow cash withdrawals. The card is entirely managed by you and can be personalised to fit the needs of your child- you decide how much should be spent and where.
However, my top tip for solving any money argument is open and honest communication. Education and involvement in decisions about money is vital — from common questions like how to save it, how to make it grow, and most importantly, how to spend it wisely. If you keep the channels of communication open with your children you should be able to minimise the risk of tempers flaring and arguments happening and as they say, prevention is always better than cure.
Image sourced fromÂ http://www.telegraph.co.uk/finance/personalfinance/9907832/Parents-paying-6-pocket-money-for-chores.html.