Pocket money for children: Talk, save, invest and spend!

Children should learn how to handle money from an early age. Because that equips them for life and protects them from stupid and useless mistakes. But the most important prerequisite for dealing with finances properly is to talk about money. I wrote down the following ten points and also discussed them with my 12-year-old daughter and her best friend.

1. Children should get pocket money early, preferably from the 1st grade. A little more every year, paid weekly at first and later monthly.
2. Children should be able to decide for themselves what they do with their pocket money, because it is their pocket money. When they are older, they can also take on more responsibility and, with the appropriate pocket money, they can also buy their own clothes.
3. Parents should talk to their children about money, that it has to be earned with hard work, why there is too much or too little available and also how there are differences to best friends or neighbors.
4. In addition to a savings account, children should be given a checking account at an early age , from which they can deposit and withdraw themselves. This creates work for the adults, because the legal guardians have to help. But the joint learning process is helpful. Grandma’s birthday money, the money for mowing the lawn at the neighbor’s and the car wash for the parents can then be paid into the checking account. Children can transfer from there as long as there is money in the account.
5. If children or young people go abroad for a longer period of time, a credit card is also useful – preferably a prepaid card. This means that the children can move around financially there too and the level of expenditure remains under control.
6. A gift is a gift: If you give your children money, then it belongs to the children. If you want to attach conditions to a gift, do it at the beginning, not later.
7. Small investments for the children work well in accounts that many Volksbanks and savings banks have as youth or driver’s license accounts for children.
8. Long-term investments for children work best today with a securities account. Attention: If you set up the custody account in the child’s name, the money in the account belongs to the child. That’s good, possibly also for the tax. But it is also final. Such deposits are better than the classic savings account for birth!
9. By law, children are not allowed to go into debt. You should therefore only shop online yourself, with money that you have.
10. If children have a regular income of a certain amount every month, they may have to take out health insurance themselves . Be sure to!