Don't raise greedy kids

Slack parents breed greedy kids By Greg Smith

When I was a kid I really looked forward to 6.30pm every Friday as this was "pocket money night" Without fail, my dear old dad would sit myself and my two brothers down at the kitchen table and hand out our pocket money in a "Japanese tea" like ceremony. Now, instead of just handing us the money, he would then spend some time talking with us about the things we did that week in order to earn it. Then he'd chat about how we were going to allocate it. Back then I used to think this ceremony was quite weird (and let's face it what kid wouldn't). But thinking about it now it was a truly wonderful learning experience. You know, this little Friday night special helped me to grow up with great appreciation of having to work for my money and knowing how to budget and look after my money.  

Unfortunately, there doesn't seem to be too many parents like my dear old day any more. Now days, it seems that many parents are not taking this very important issue of pocket money seriously. In fact, from a recent survey of over 1,500 Austraians conducted in July 2008, I found that a whopping 68% admitted to only paying their children pocket money every now and again.

But wait there's more. Close to 30% of parents simply preferred to just give their child cash instead of pocket money. Many of them saying that it was just easier and less hassle this way.

Wake up Australia!

What sort of message are we giving to our children? First of all, paying them one minute and not the next not only defeats the understanding of the concept of a regular wage it also creates a boom-bust mentality.

In other words, a boom-bust mentality will condition children to spend 100% of their money as soon as they get it as there is no guarantee of any future money. Definitely not the message we want to impart especially when we should be teaching them good habits about budgeting. Second, paying your child cash without expecting them to perform a task is simply breeding a greedy child. Over time they will wise up to the fact that you are just buying love and then they will just use it against you. Gone will be your opportunity to teach them the work for money ethic.

Sadly, I fear that we are not giving children the proper grounding in basic money skills. Among many things it can start with the most simple of concepts - pocket money. Look, if my dear old dad could do it, so can any other parent. It just takes a bit of commitment. (Want some help? Just check out the Shopping Page to see some of the Kids Money Education products I've developed or visit our sister site http://www.kidsmoney.com.au/ )

Just in case you are not up to speed on the latest pocket money techniques here are my top three tips to refresh your memory:

1. Allocate out how much pocket money you can afford - include pocket money as a regular expense in your overall budget so that you can continue to pay it regularly.

2. Work out the going rate - ask other parents what they are paying and what they expect in return this will give you an indication but then set the amount you can afford and that you and your partner think fair.

3. Pay pocket money consistently - whatever day you decide is pocket money pay day stick to it as this helps your kids plan around it and get them ready for when they start earning a regular salary.