Giving children an allowance is a good opportunity for them to learn about proper money management. A study published in the Journal of Economic Psychology suggested that kids who received an allowance spent less and had better money management skills than those who did not. This shows that the best way to teach kids about finances is to give them an opportunity to handle their own.
And here’s a better idea: let your child earn their allowance. “Free money” may be unwise; we all need to work hard and work smart to earn money for ourselves. Giving our kids unlimited “free money” by just handing them cash whenever they ask for it, is not the right lesson to teach.
Filipino financial experts agree that giving kids an allowance by having them “work” for it is the better way. For example, many parents nowadays give their kids a weekly “sweldo” for completing tasks at home or helping in household chores.
As soon as your child starts “earning,” teach them how to properly budget their money: setting aside a portion of their savings and then spending on needs before wants. Nowadays, teaching kids the importance of saving has been made easier with bank accounts specially designed for them.
A savings account for kids is a great way to make them understand that their money will grow over time as long as they continue to make smart decisions and develop the habit of saving. This is also a great way for parents to show their kids how financial institutions protect their money, how their savings are adding up, and how much progress they are making towards their goals.
For this, you can try the BDO Junior Savers Account. It has an affordable initial deposit and a low maintaining balance. [Click here for more information: https://www.bdo.com.ph/personal/accounts/peso-savings-account/junior-savers]
It doesn’t just stop there. Parents can also help their kids grow their savings using a Junior Savers Plan. This allows you to add to your kids’ initial fund by scheduling regular deposits using your BDO Online Banking Account. Just set the amount and date of transfer and you can easily build their savings and teach them more money lessons.
With these lessons, your child will more easily learn and practice saving money – a life skill that will give him or her a future of financial freedom and security.
i totally agree with you on this, a child with a clear knowledge of how to budget will run you dry as a parent.
I think it’s so important to teach our children how to manage their money early. An allowance is a powerful tool for doing that.
We started giving our kids an allowance a few years ago. They have since learned so much.
Such an important skill for a child to use. I wish financial intelligence was normalize in al settings, but especially at home and at school.
I definitely plan on having my child learn to save. It’s such an important lesson that I feel like the current generation lacks.
In Japan, we teach kids to not have any money allowance in school but I see your points here. It would be good to teach my kids the value of saving money
There are indeed some benefits of giving our kids allowance. it teaches them to value money and learn to save for their future.
Interesting idea! I definitely would try the way of “earnings” with my kids. I agree that they will better manage it when they earn their money.
It is always good to think about saving ahead, and to work on good financial habits with children as well.
When I was younger I was paid to do various chores around the house. This may explain why I am pretty good with my finances.
Great idea, I will check the BOO account since it helps with this. Thank you for sharing!
I’m on board with this idea. Teach kids the value of hard work and money at the same time.
That’s interesting and appreciate your insights and tips for parenting!
Yay! Nakapag open Ako Ng savings account Kay lo for future use. Especially sa education nya.
Ah yes! Having an allowance is a good way to teach and learn with your child some good financial management and interactions. I highly encourage it.