What we often forget is that children don’t understand the value of the dollar in the terms we understand money. Sure, they may understand the value of a bag of chips, maybe even a small toy, but what they may be lacking at this point in their life is the true value of that dollar and how they earn the money they wish to spend. Here’s the solution: just give them a fixed amount of money. You might be surprised, or even furious – how can we teach our kids to behave by giving them money? Wouldn’t they become greedy and ask for more later? Don’t worry, there are a list of reasons you should do so. Read first. This method originally is suggested by Bob Cormack. His answer in quora got a lot of upvotes and has inspired many parents.
1. A Fixed Amount Of Money Will Let Them Have A Better Concept Of Money
Like I mentioned, often a child will know the price of a bag of chips or the price of a certain toy. That’s the money language they speak and understand. If you provide a child with a $20 bill at the store, they most likely don’t understand the value of the toys they desire and how much they cost. Your child may run around the store filling the shopping cart with things they would like, to only be stunned at the check-out register when they don’t have enough money to purchase all their hearts desires. This in turn, requires the child to really question how much each item costs and having to make tough decisions on what they really want with the money they’ve been given.
2. A Fixed Amount Of Money Requires Your Child To Make Their Own Spending Decisions
Allowing a child to make their own spending decisions allows them to learn financial autonomy from an early start. Let your child make financial decisions, good or bad; they will eventually learn to spend their money wisely when they do not have any money for the things they truly want.
3. A Fixed Amount Of Money Encourages Your Child To Have Savings
For example, if your child wants a toy that is $15.99, but their weekly allowance is $7 per week, you can incorporate some basic math skills into this dilemma by figuring out how long it will take to earn that toy and if that toy is worth all the work your child will need to complete to purchase it. You may even be surprised to see your child saving for the toys they really want to purchase, rather than impulsively demanding every new toy they see at the store. Perhaps your child will attain a certain awareness and curiosity as to how much a specific item costs and how long it would take them to earn the money to finalize their purchase.
Summation
So giving a fixed amount of money to your child when he/she is asking you to buy toys is not spoiling them. Instead, providing your child with a fixed amount of money, whether weekly or monthly, will allow your child to appreciate the value of a dollar and the toys they wish to purchase. A fixed amount of money will allow your child to make their first financial decisions based on real life items they can purchase in monetary increments they are able to understand.
