Understanding residual debt insurance!
You've probably heard of residual debt insurance. But what does it mean and do you need it?
It’s up to each family to decide when they want to start giving their children pocket money. However, if you want to give your children their pocket money at regular intervals, for example monthly, it’s better to wait until they have learnt arithmetic and are beginning to get a better idea of time. Starting secondary school can also be a good occasion to introduce pocket money.
That being said, children can start learning the value of money well before that, with little everyday things. For example, you can ask your child to count out the money for bread at the corner shop or you can pay him or her for doing small chores at home. Little by little, your child will understand that everything has a price and that money doesn’t grow on trees.
Parents don’t have to give their children pocket money, but there’s no reason why they shouldn’t. On the contrary, it’s a sign of trust and a way of giving children responsibility from a young age.
There is no set formula here either but there are some factors that you can take into consideration:
Traditional savings account with a preferential interest rate, allowing your child to learn how to manage their savings the fun way.
Whatever you decide, it is important to stick to a routine and not withhold pocket money at any given opportunity. If you start giving your child pocket money, he or she should be entitled to it even if he or she hasn’t tidied their room for example. Equally, don’t give your child money just on merit. If your child gets a good mark at school, it’s better to reward him or her with an activity that they will enjoy: a cinema trip, outing to the park, etc.
So, your child has blown it all on sweets or the latest trainers? Your child is entitled to spend his or her pocket money however he or she sees fit, so it’s important not to meddle in his or her choices!
What if he/she runs out of money and asks for an advance? Rather than giving in, suggest some solutions. Explain to your child how to save up or show him or her how to keep a cash book. This will help your child learn how to prioritise certain items and give some thought to what they want to do with their money. By opening a savings account for your child, you’ll be encouraging him or her to put some money aside and actually watch it grow over time.