Is it okay to give your child money from a young age? Maybe many of you who already have children are wondering about this.
When to Introduce Money to Your Child?
In fact, giving them money from an early age can help them learn how to manage their finances and be responsible. Starting from managing daily expenses and setting aside money for savings to sharing kindness by giving sadaqah, all are the benefits of giving money to a child even though they are still young.
How Can Giving Money to Your Kid from a Young Age Help Them Learn About Finances?
1. Your child can learn to manage their own needs
By giving your child money, they can learn to manage what they will use the money for, according to their needs. Whether for snacks, to buy their favorite toys or for other purposes. They can also choose to save their daily pocket money if they decide not to use it.
At this time, you can introduce your child to the 50/30/20 money management method popularized by Elizabeth Warren, a senator from the United States, where 50 percent can be used for needs, 30 percent for wants and 20 percent for savings (source: Investopedia). Of course the introduction can be done in simpler ways or words so that it is easier for them to understand.
As a parent, you can tell your child that the money they can use is within the budget you have set, so they will be more responsible in how they use it.
2. Your child can learn the difference between needs and wants
While giving money to your child, you can also chat with them about what they want to buy with their money. Give them an understanding of what priorities are, and slowly tell them that what needs to be a priority is needs, not wants.
Giving them examples of needs and wants may be easier for them to understand. Buying a new doll, for example, is a kind of want, not a need, especially if just last month your child received a doll as a gift from you because of their achievements at school.
3. Your child can learn to make a spending plan
By giving money to your child, they can start to know what a spending plan is. They already know how much pocket money they will receive each day and can make a spending plan based on priority needs.
For starters, get your child used to making a spending plan for the next week first.
4. Your child can learn to save from a young age
No less important is getting your child to start saving. Explain to them the importance of saving from an early age so that not all the money you give is spent on buying this and that. For example, by saving your child can learn not to be wasteful, which is prohibited in Islam.
By saving, your child can also become a more patient individual and learn to appreciate money. It takes discipline and commitment through saving to be able to buy something they like.
5. Your child can learn to be charitable from an early age
Apart from the four benefits above, by giving money to your child, you can also get them to start passing on kindness from childhood. Apart from being used to fulfill needs and wants and to save, your child can also set aside some of their pocket money for charity. Introduce them to sadaqah, which is highly recommended in Islam.
How to Teach Your Child to Manage Money by Opening Interest-Free Accounts at Bank Jago Syariah
To make it easier to allocate money for your child, you can take advantage of the large number of accounts that can be created at Bank Jago Syariah.
1. Open many bank accounts using the Jago Syariah Pocket
The way to have multiple accounts is to create many Jago Syariah Pockets. Each Pocket you create has its own account number, which can be found in the Pocket details.
2. Separate money for your child in a different Spending Pocket
Name the Pocket the way you want so you don’t confuse it with the Pockets for other needs. Make sure every month you allocate money to this pocket. If you give your child daily money in cash, you just have to move the existing money to another Pocket. By using the Pocket, you ensure that you don't give too much money to your child.
3. Open a separate savings account for your child as well
If your child only uses part of their pocket money or doesn't use the money they are given at all in one day, you can transfer the money to a Saving Pocket that you have created specifically for them This way, it will be easier for you and your child and both know the progress of your child's savings.
Having savings and managing expenses with Jago Syariah, you can rest easy because the Jago Syariah Spending Pocket and Saving Pocket use interest-free Wadiah Yad Dhamanah akad, which is in accordance with sharia principles.
Practical Cashless Payments Using the Jago Syariah Visa Debit Card or QRIS Jago Syariah
Another benefit of managing finances with Jago Syariah is the availability of practical non-cash payment options using the Jago Syariah Visa Debit Card or QRIS Jago Syariah.
When you and your kid are at the mall and they want to buy some snacks and are willing to take from their pocket money, you can use the Jago Syariah Visa Debit Card or Jago Syariah QRIS instead of spending cash.
It doesn't matter if you only have 1 Jago Syariah Visa Debit Card that you have linked to a Spending Pocket that wasn’t created for your child. You can unlink the card and link it to another Spending Pocket as a source of funds for payments. Awesome, right?
Likewise, payments with QRIS Jago Syariah where you can choose the most suitable Spending Pocket as a source of funds. The budget for every need is safe because you don't take or use the wrong funds.
After knowing the many benefits that can be enjoyed by giving your child money from an early age, such as can learn how to save and make a spending plan, what age do you think you will give money to your them? Whatever your choice, Jago Syariah is here to help you more easily allocate budget for every need in each respective Pocket.
