Parents encourage children to practice need-based spending
A recent survey explores the parent-child relationship with regards to money. Prachi Rege speaks to a few parents to find out how they manage money matters with their little geniuses
Pocket money has always been a vital point of discussion between a parent and a child. With changing times and lifestyle, the need for children to have those coveted bucks in his/ her wallet has increased. However, while the kids are busy hoping for a cash rich pocket, parents try their best to balance out this 'hope' within the limits of their humble salaries. "I give my son an allowance of Rs 100 every week, that too on a Friday, which is the last day of school, to party in the canteen," says Supriya Desai, mother of a 10 year old, who likes to eat out most Fridays after school.
According to a survey conducted by ING Vysya bank, on an average, children below 10 years either do not get an allowance or get a pocket money of less than Rs 500 per month. Those between 15-18 years get below Rs 1000 per month. Shrushti Parab, a parent, gives her 18 year old Rs 2000 to 3000 every month to buy study material and sometimes to eat out. “The money also takes care of birthday gifts of friends, treats, etc," says Parab.
Ajit Kadam, is a lucky parent when it comes to his 11 year old son. "My son still hasn't yet demanded pocket money. He doesn't like to eat out and travels to the school by bus," says Kadam. Mother of two kids aged 15 and 13 years, Shenaz Rahim doesn't give any pocket money either. "I encourage eating home cooked meals, and money is given just to travel from home to tuition and back," she says.
In a pan India survey conducted by the bank with a sample of over 4000 parents with children in various age group, it was concluded that children tend to mimic their parents spending habit. The survey explored three areas— pocket money, online shopping and saving avenues. Eighty four per cent of the respondent parents in the survey are online shoppers. A majority of them are worried that their child is tempted to buy items that are not necessary. "I encourage need-based shopping. I reason with my son about the need of the product he is demanding from me," explains Desai. The trick she uses is that she asks her son to wait for a week to ten days to realise, 'whether the toy or gadget that he wants really necessary at this point in time'.
While Desai is a reasoning mother to her son, Kadam is the daddy dearest to his 9-year old daughter. Be it a doll, kitchen set, dress or a pencil box, he always has a budget for her. " My wife thinks I am spoiling our daughter," he quips. Parab’s husband is an avid online shopper. "He mostly buys gadgets for them online, but that is need-based and not to flaunt it to friends," she specifies.
Shruti Dhawan, another mother, plans to play the 'ignore card' when her little one graduates to throwing tantrums at the mall. "Window shopping is fine, actual shopping should be only for necesary items," she emphasises, just like all other parents. Rahims's 13 year old son has been vying for a PS 4, but she is not giving in to this demand. "It's not always that they have to give up on their demands sometimes even we have to give up on our stand, it is mutual," she explains.
On saving avenues, the survey collates that parents with younger kids prefer to open a child’s savings bank account over other investment options, and investing in fixed deposits is second most preferred choice. "We both are earning and have made enough individual and joint savings. We don't really have education fund yet, since our kids are quite young," explains Kadam. Children’s education was the most significant reason for parents to save. Parab champions the need to save, " Around 20 years ago when I started working I invested in LIC and other funds. Today, it helps me to deal with my kids demands." Rahim is partially pinning hopes on her gold ornaments among other savings to provide for her children.
The survey says....
Majority felt child only above 15 years can operate bank account independently
Majority allocate less than 10 per cent of monthly income for child’s future
Forty nine per cent parents said they will not encourage their children to shop online.
Last year over 50 per cent of parents were not in favor of giving out pocket money, but this year two-thirds of them are in favor of giving pocket money to the child above the age of 10