Dubai: A 11-year-old Indian boy earns Dh2-3 for every household chore that he successfully completes. In less than two years he has managed to build pocket money worth over Dh300. This is even after he rewarded himself, bought gifts and occasionally lent money to parents that they returned within a certain timeline.
His story is a great example that financial planning can start early and doesn’t always have to be a forceful or boring exercise. Here’s how his UAE-based expat parents went about teaching their son how to save at an early age.
Learning by doing
From cleaning his room to watering the plants and buying milk from the neighbourhood grocery store, 11 year-old Madhav Vishnu has been helping his parents with small errands. Every time he completes a task, he earns Dh2-3 for it.
He started doing this exercise since January 2020 and in less than two years has managed to earn more than Dh300 as pocket money, which he saves in his piggy bank. Even though Madhav saves the money in his piggy bank, his mother Sreeja Shankar has also taught him to use an excel sheet to keep a track of the earnings and review it every two months.
Madhav’s mother Shankar who is a teacher by profession said, “These days right from the elementary level children are taught with real world examples which proves to be more effective. Through things like role play children learn life skills in a fun yet practical manner and tend to retain better.
“So, in Grade 7 when Madhav started learning computer sciences, I thought of introducing him to work on excel sheet. This also helps him to keep a track of his earnings against accomplished household chores. It’s a fun activity for him and one that also improves his excel skills.”
#1: Tip on how children can learn to calculate or budget money in a fun way
Since one of his tasks is to buy milk from the grocery store, Madhav needs to do quick calculation on how much money should be returned to him every time he doesn’t have the exact change.
“This exercise hones his calculation skills through a practical experience. It also teaches him to keep a track of prices of items that are bought on a regular basis. Over time such small exercises teach children crucial bidgeting skills,” Shankar stated.
Spending mindfully
“Every two months I spend Dh20 to buy four comic books from a nearby store that sells pre-loved books,” Madhav shared. “But before taking out money from the piggy bank, I review the excel sheet to know the exact amount that I’ll be left with. That’s because I’m planning to buy a pair of shoes before my birthday in August that will cost me Dh450, which means I’ve to save more than Dh150 by then.”
Since his pocket money comes mainly from doing household chores and annual Diwali gifts, he must plan his spending carefully. “That’s why I rarely buy things like candies and chips from the vending machine in school.
“Besides the comic books, the only other things that I’ve bought with my pocket money are a birthday card and sticker set for my father at Dh25.”
#2: Tip to inculcate in kids the habit of mindful spending
Shankar has introduced Madhav to the concept of pre-loved books because a brand-new book would easily cost more than double the amount that he now spends as total bill.
“This is our way of teaching Madhav how to consume responsibly and sustainably from a young age. It’s always a matter of choice so where possible he opts for pre-loved while also buying brand-new stuff,” Shankar said.
Earning rewards
Talking about brand new stuff, recently Madhav went to a shopping mall with his parents where he liked a bag and bought it. “There were two options, one slightly lower priced than the one I chose which cost around Dh250. So, my father asked me to chip in Dh50 and agreed to pay the rest of the amount. I agreed since I really wanted this bag. Before buying this bag, my pocket money had gone up to Dh368,” he added.
Explaining the parental perspective Shankar said, “We could have purchased the bag for Madhav without asking him to part with his hard-earned pocket money. But that wouldn’t have made him feel as if he earned it. And rewards must be earned.
For instance, we make it a point to buy him birthday gifts that he really wants but for the rest of the year every reward should be earned. This is also something that children must learn from an early age to feel good about their achievements and value things that are dear to them.”
At the same time whenever Madhav volunteers to do something good, be that helping a friend out in school or dog-sitting for a family friend Shankar makes sure that he gets rewarded. “My mother treats me with an ice-cream,” Madhav shared with a dazzling smile. “When I received a certificate from school on successfully accomplishing some tasks that I had signed up for beyond schoolwork, she also took me out for dinner at my favourite restaurant.”
#3: Tip to teach children the value of earnings
Besides planning for big purchases like the bag or a pair of shoes, Shankar has also taught Madhav to review his expenses. “That’s because by reviewing the excel sheet he will have an exact idea whether he has been paid for all the accomplished tasks.
“Since we borrow coins from him sometimes, it’s our way of ensuring that he is being careful about being paid back within the committed timeline. It’s through such small things that children learn to value their earnings, while also learning budgeting skills.”
