Tuesday, 5 May 2015

Pocket Money for Kids?

My son is now 9 years old and he reminded me about my plans for his allowance/pocket money recently.

Baby and toddler days

When he was a baby and a toddler, we've just been buying him stuff he needs (e.g. "educational" toys) but we felt the pinch when his little sister came along.

Clothes expense - First, we tried to re-use all the baby clothes and baby equipment, which tide us over for the first 1-2 years. The hand-me-downs didn't really work well for our daughter because our son's t-shirts turned out too big on her small-frame. In any way, I was grateful that at 4 years old, she can still wear his 2 year old t-shirts.

Next, she's a girl who likes PINK thus when she turned 3, she turned up her nose at almost all the navy blue items :)

Thus, I've been shopping for affordable little girl's t-shirts and dresses. Thankfully, she doesn't mind bright colours like orange, sky blue or green shorts.

Toys - Our home looks like a Montessori kindergarten because I have quite a number of wooden toy sets, colourful blocks and other manipulative toys.

I am glad that we bought good stuff where we can afford them because they are coming to 10 years old soon (!) yet they look good and can withstand toddlers' rough handling.

I find that battery-operated toys aren't worth buying even if they are Fisher-Price because we've already discarded 4-5 of them because they stopped working and we don't know anyone who can fix toys.

Building blocks/bricks, cooking toys, Playdoh sets, wooden blocks and LEGO are definitely good buys because the kids play with them again and again and again :)

Pocket money for primary school

The main point about this update is our kids' allowances or pocket money.

When my son was 7, he started primary school and since I pack food for him, I gave him RM1 a day as pocket money. I taught him the concept of pocket money i.e. money he could use or save. He was pretty good and saved up to RM70+ or so, I think.

I even brought him to the bank to open a savings account where he watched the bank teller tallying up all his coins and notes, deposited them and he noted down the amount in his savings book.

When the toddler noticed that he's got all these coins in his piggy bank, she demanded for money too. I would give her spare change when I have and she'd happily insert the coins into her piggy bank :)

When she started kindergarten, she told me about the french fries, sandwiches and Vitagen she could buy from "school". Once a fortnight or so, I'd give her pocket money to buy sandwiches, cautioning her to buy french fries only ONCE in a blue moon. Ugh!

Food expenses

One weekend, I was on my own with the kids and it was raining heavily yet we had to go to the wet market for groceries like chicken, fish, pork bones and vegetables.

Then, I remembered too late that I had forgotten to withdraw money from the ATM on Friday - I only had RM2-3 in my wallet! I contemplated driving to Tesco or something but hated the idea of buying fish or poultry from the supermarket...

The kids had a brilliant idea! They said that they had A LOT OF MONEY in their piggy banks - Mummy can use that money to buy stuff at the wet market :)

I was so touched to see them rushing for their piggy banks and pooling the coins and notes together. We had a grand total of RM25+ Yay, we could go to the market!

I was embarrassed about paying in small change but the wet market vendors were very gracious -

"It's still money! Spare change is better!"

The vegetable vendor even threw in a free carrot or something. I was so grateful :)

All in all, I was relieved that I got enough groceries to cook lunch and dinner - we could even share 2 dishes for breakfast.

Driving the kids back home, I asked them how much I'll have to pay them back but my 8 year old son said,
"It's okay, Mummy. You used the money to buy us food - you don't have to pay us back the money." 
Aww...doesn't that melt your heart?

Weekly/monthly allowance? Rewards? Wages? 

Anyway, my son reminded me recently that he had not received ANY pocket money last year but he would like to again.

Let's look at his monthly budget:

1. Food - RM7 per week x 4.5 = - RM31.50

Last year, I was crazy busy with work, the school run, homework, extra-curricular activities and exams that I've been packing them snacks or giving them almost the exact amount for sandwiches from the school canteen e.g. RM2 for RM1.80 sandwiches. He'd use up the RM0.20 to buy erasers or replace broken rulers etc.

If I had to give him RM2 per day, that'll come up to RM10 per week x 4.5 = RM45/month

2. Toys - RM50 x 3 months = - RM150

We'd bought him B-Daman, 2-3 Transformers, LEGO Ninjago or some other cartoon character toy, which each cost RM100-150+ (each toy is 3 months' worth of food money).

In other words, we'd spent more than RM440 per year on his toys (assuming that he got RM10 per schooling week x 44 weeks) on his toys.

We bought him the special toys because he had been doing well in school.

Since I emphasize on the love for learning, I feel like I'm giving him an extrinsic reward for his school performance :P

Once or twice he's come up to me saying, "Can you buy me the XYZ if I get 100% in ALL the subjects?" I told him it's not the marks that matter, what matters is what he learns from the lessons.

He loves school thus I don't really want to create a direct relationship between studies and rewards.

3. Laundry (wages) - RM10 per week x 2 weeks - +RM20/month

He used to help me with the laundry i.e. folding and storing the clothes, for which I gave him RM10 per week. However, he didn't do this during the weeks when he has ECAs, school projects and exams.

As working parents, we have a FIXED BUDGET:

i) Although he didn't get any pocket money, he still got whatever money we decided to allocate to his gifts. However, I'd like him to have some experience managing a personal budget.

ii) I don't like to pay children for chores because the househould MUST be kept clean, no matter what.

He's asked to earn extra money by helping me around the house again - first, I've got to focus on age-appropriate chores. Here's another article about not paying kids for doing household chores.

I'll pay him RM5 for small "projects" where he's contributed his smarts too if I can figure out the price list:
i) Helping me haul pots in the garden
ii) Sorting out books for sale
iii) Stacking up newspapers for recycle - he and his sister each got RM5

Interestingly, he got RM5 for a job well done from one of his teachers.

In total, he can visualize an amount of RM20-30 spending money per month.

I found a link on Forbes about important money lessons for kids. Here's another financial lesson.

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