Advantages
Independence:
The most important plus point of pocket money is that it teaches children independence, which is essential for success in today’s world. When their parents allow them to have their own money, children feel connected to and believe their parents trust them. When kids have money, they learn to handle it and understand its value. Secondly, when kids have pocket money, they don’t have to rely on their parents for little expenses. They can buy things when they want and need. Pocket money gives children financial independence by teaching them the true value of money and how it can empower them.
Responsibility:
Pocket money not only helps kids with their expenses, but it also instills in them a sense of saving at an early age. Pocket money teaches children responsibility since they must plan a budget and then figure out what to do with the money. When this is done correctly, there will be a sense of success and pride that can go a long way. Most parents are concerned that their children may misuse the money that has been provided to them, but until you trust them and allow them to contribute to their expenses, they will never learn the difference between “use” and “misuse” of money.
Disadvantages
Misuse:
Children often lack the wisdom to use money wisely, so they end up buying items they don’t need. But this is often a part of the learning process. Also, sometimes kids may not be honest about what they buy and it could be items that are inappropriate for their age.
Misplaced values:
Children often disregard the importance of their parents’ time and other relationships in favor of money. Pocket money is the easiest way to make the children’s nature more lavish than is required, which is difficult to maintain as time passes. Giving youngsters a small amount of money as pocket money is not bad. Yet, parents should keep an eye on how their children use their pocket money. They don’t have to double-check every single transaction, but they should surely keep an eye on one-time pricey purchases or frequent requests for extra money. After all, earning pocket money is the first step towards financial literacy and the growth of your child!