Money matters: How Math will help your child manage their allowance?
“Mom! Dad! Can I have this bike?” asked 10-year-old Sam while staring longingly at the beautiful thing that was gleaming behind the glass window inside the store.
Mom and dad, who had walked ahead, turned around to see Sam’s longing expression. They walked up to him and said, “You know, you can buy this bike yourself with the help of your allowance. It is $100. If you save wisely, then you will be able to buy it in a couple of months. Why don’t you talk to us about how you plan on saving.”
Sam thought of the math. He had a weekly allowance of $20 and had already thought of putting half of it in the bank. He also decided to skip taking the bus to school to save a little more.
Do not save what is left after spending, but spend what is left after saving.
He then told his parents the idea. His dad, curious, asked him why he wanted to put $10 in the bank, given that he would still save money by not taking the bus. Sam said that the money in the bank meant that he would not have to think about it. And extra money would mean he could buy bike accessories.
Introducing your child to the concept of money and banking at an early age teaches them the value of money and helps people like Sam buy the bike of his dreams. And while finance may appear intimidating to both children and adults, it is an integral part of life that will not only help you buy that bike but also think about that dream holiday that you have been dying to go on.
To make your child understand the value of money, why don’t you sit with them and make a spreadsheet to see how they have spent their money. This way, they will know how much to save and responsibly manage their finances.