Growing up, if there’s anything that most of us can relate to is waiting for the first day of the month to request our parents to refill our pocket. The sheer excitement of owning money and having full authority over it is unmatched and is an integral part of childhood development. This event continues when the kid becomes a teenager and gains more knowledge about the responsibility they’ve been handed over in the form of banknotes, or as parents now prefer- deposits in their teen’s bank account, or card, like Fampay.
Giving out pocket money to children and teenagers is common among parents who want to instill financial literacy and a sense of responsibility in their children. But do they factor in the psychological implications of it? Most importantly, do they know the psychological effects of giving out a pocket money card on a child’s brain? Let’s find out.
The upsides:
- Motivation to work hard: In older times, a piggy bank was the standard storage system for the pocket money that kids got. Now teenage bank accounts, debit or money card have replaced them. They provide teens with the convenience of tracking their savings through their phones. Additionally, parents can monitor their kid’s expenditures in real time. Parents can decide when to reward their teens with money in addition to giving pocket money periodically. They could reward them when they help in work, stay consistent with their goals, or bag an academic or extracurricular achievement. It could motivate teens to work hard towards their goals, even if it is just for the monetary reward that comes along.
- Promotes decision-making: When teens get the authority over money, they are also handed over the responsibility of spending or saving it per their needs. Parents can encourage their kids to use their pocket money app to buy snacks, stationery, or other items they frequently need. This can strengthen the decision-making ability of teenagers as they’ll have to be cautious about how much they’re spending and on what. It can teach them important budgeting and decision-making skills.
- Teens feel independent: When teens have to make decisions for themselves, they feel independent. Teens can decide how they want to spend their money, which, if it turns out right, can encourage them to make bigger decisions and get closer to achieving financial independence. When teens get their bank account, debit card, or money card for teens, they can feel free to take up a part-time job to earn some extra money.
The downsides:
- It can cause conflicts: When teens want something but don’t have enough pocket money to afford it, they may feel annoyed and can start an argument with their parents. If a parent keeps giving pocket money periodically, a teenager may feel entitled. They might build a false sense of pride that they will get money no matter what they do. It can become emotionally draining for parents and stop teens from working towards their goals. Thus, parents must clarify under what circumstances their child will receive money.
- Teens may get jealous: Regarding pocket money, children can be quite sensitive to comparison. While receiving pocket money can feel empowering and exciting for kids, it can also lead to a range of emotions when they compare the amounts they receive with their friends and classmates. Just imagine a young child at school who excitedly shows off their shiny new toy, purchased with pocket money. In such a situation, a parent must encourage their child to stay true to their motivations and set up bigger personal goals that they would never show off to gather liking from their peers.
- It can cause anxiety: managing money is undoubtedly a big responsibility. A teen might feel anxious about losing money due to their carelessness. In such instances, pocket money can become a source of stress. Moreover, a teen might also be prone to social comparison. When seeing their peers spend money in a certain way, they may feel like they need to spend their money the same way as their peers. This pressure to conform can lead to a variety of negative emotional consequences. Children may feel anxious or stressed about making the right purchasing decisions and worry about being left out or judged by their peers.
In conclusion, pocket money is not inherently good or bad. It can be a valuable tool for teaching children about financial responsibility and promoting independence and decision-making skills. However, it can also have negative consequences if not managed properly. Parents should be mindful of how much money they give their children and what they spend it on and should use pocket money to teach their children important life skills.
