Buying stationary, new colors for the art class, or a birthday present for a friend; your child's needs will vary and increase by large once he steps into the small world of his own, where he has his school, and set of friends. Just to make sure that he enjoys the freedom of dealing with the little money matters of his everyday life with a sense of responsibility, pocket money does seem to be a great idea.

Most of the parents swear by this method that keeps them off from the constant demand of money by kids. All they need to do is fix in a monthly amount, and they get no pleas of bringing in any random kids' stuff.  But pocket money is not just limited to handing over a fixed amount to your child to spend as he wishes to. It's one good way of making your child learn the value of money and use it wisely. With good planning, you can even prevent them from turning into an extravagant spender.

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Why & When the Child Needs Pocket Money?
 

It's true that you are very well taking care of your child's needs. But as your child starts understanding the value of money, it's always good to let him spend some on his own. This is a great way of making your child understand the role money plays in human life. Also, this even helps him in managing his daily expenses with a set budget. So once you feel that your child is able to shop for small things on his own and manage his little expenses, it's time you give him pocket money.  

How pocket money helps the child?

• If planned and adhered by in a systematic way, pocket money does benefit the child in a number of ways. 

• Your child learns the importance of money

• Values the need of spending it wisely

• Learns to abide by a budget and plans expenses accordingly

• Keeps away from being an extravagant 

How To Fix Your Child's Pocket Money? 

The amount of money given to the kids as pocket money tends to vary given the personal choices and also to an extent, the child's nature. Fixing an amount for pocket money is solely your decision as a parent, taking into count your family budget. However, do analyze your child's everyday routine to figure out how much added expenses he bears while being away from home. 

Some Useful Tips on Giving Pocket Money

Your job doesn't end with merely assigning a fixed some of money as the monthly pocket money to your child. If proper care isn't given, your child might start taking the money given for granted and often misuse it. Always monitor his spending so that he doesn't get carried away with the freedom of spending money as per his wish. Here are some important tips to keep in mind:

• Explain to the child the purpose of giving him the pocket money. 

• Set a limitation for spending, so that your child doesn't overspend the money.

• Fix a set date on which the pocket money is to be given, avoid paying in advance.

• Watch out as to where all the money is being spent.

• Don't fix an amount that's too much a sum of money. Keep it moderate and at par with your budget.

• Advise your child to write down all his monthly expenses, this will help in knowing how much money is being spent by your ward in a month.

• Always encourage him to try and save some money every month.

• Set a good model yourself. When your child see how you value and save money, he will also follow the  suit. 

Keep these important rules in mind and make use of pocket money as one major tool for teaching your child the value of money!