Where does money come from?
27th January, 2021
We’re all familiar with the age-old adage “money doesn’t grow on trees,” but it doesn’t come from the bank of Mum and Dad either.
Put yourself in their shoes
From a child’s perspective, they see us paying with plastic (or a tap of our phone) for just about everything these days and as far as they’re concerned, the bank link is a never-ending source of money. Rarely do they see the hard work that goes into affording the essentials—let alone the extras.
Explaining where money comes from is no easy task. A good place to start is by describing the jobs you and others in your family do every day. It’s also good to point out workers they see or interact with on a regular basis—their teacher, the taxi driver, the clerk at the grocery store—and talk about how everyone gets paid for their work (e.g., a set annual amount paid monthly, wages and tips, by the job, by the hour, etc.) and who pays them.
It’s also important to help them understand that the better someone is at what they do, the more money they can potentially earn. It’s good to discuss the varying degrees of experience and expertise required to do a job and make a link between increased skills—whether it be formal education or on-the-job training—and income potential.
Learning to appreciate the value of money
Pocket money (or an allowance as we call it in the States) is a personal decision, but it can be an excellent tool for teaching your kids about how to manage money. Blowing €10 on a toy that gets played with twice before being forgotten isn’t a lesson learned unless you can equate that €10 to the time and effort it took to earn that money and then realising it simply wasn’t worth it. And by the way, just forget that we’d prefer our kids to be spending their money on books and board games—the lesson to be learned here is buyer’s remorse, which is a tough lesson that should be learned as young as possible.
We’ve all regretted spending money we shouldn’t have or wasting money on things we didn’t need—let alone even want soon after—but once the money is spent, it’s gone. I don’t know about you, but I’d much prefer my son to be experiencing buyer’s remorse after having bought a crap magazine and realising it took him a week to earn that money rather than him not knowing the grief and consequences of buyer’s remorse until he ends up blowing a month’s salary on a spur-of-the-moment weekend getaway with the lads!
Buyer’s remorse can only be learned though experience, so let your children make mistakes and don’t bail them out. Pocket money is a tool to support meaningful conversations and lessons about money, not a substitute, so take advantage of those teachable moments.
Practice makes progress
Regardless of whether you tie pay to chores or encourage your child to look opportunistically for jobs that need doing (or better yet, both), it’s hard to argue against the benefit of learning the value of money at an early age. Learning how to manage money responsibly takes practice and the sooner we start, the better we get.
If you haven’t already, you can download the Cents for Kids Job Brainstorm here to get started and check out our 20+ job ideas to get your child thinking. You can also download the Cents for Kids My Job Chart here to help your child make a weekly plan for the jobs they do and the money they earn.
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