Dubai: An 11-year-old Indian boy earns Dh2-3 for every household chore he successfully completes. In less than two years, he managed to build up pocket money worth more than 300 Dh. It was even after he rewarded himself, bought gifts, and occasionally lent parents money that they returned within a certain time frame.
Her story is a great example that financial planning can start early and doesn’t always have to be a strenuous or boring exercise. Here’s how his UAE-based expat parents taught their son how to save from an early age.
Learning by doing
From cleaning her room to watering the plants to buying milk at the neighborhood grocery store, 11-year-old Madhav Vishnu helps her parents with small errands. Each time he completes a task, he earns Qh2-3 for it.
He started doing this exercise since January 2020 and in less than two years has managed to earn more than 300 Dh in pocket money, which he saves in his piggy bank. Even though Madhav saves the money in his piggy bank, his mother Sreeja Shankar also taught him how to use an excel sheet to keep track of income and review it every two months.
Madhav’s mother, Shankar, who is a teacher by profession, said: “Nowadays, from elementary level, children learn with real-world examples, which proves to be more effective. Through things like role-playing, kids learn life skills in a fun yet hands-on way and tend to retain better.
“So in grade 7, when Madhav started learning computer science, I thought of introducing him to Excel sheet work. It also helps him keep track of his income against the household chores he does. It’s a fun activity for him and also improves his excellence skills.”
#1: Tip on how kids can learn to calculate or budget in a fun way
Since one of his tasks is to buy milk from the grocery store, Madhav has to do a quick calculation on how much money should be returned to him whenever he doesn’t have exact change.
“This exercise hones numeracy skills through hands-on experience. It also teaches him to keep track of the prices of regularly purchased items. Over time, these little drills teach kids crucial bidding skills,” Shankar said.
“Every two months, I spend Dh20 to buy four comics from a nearby store that sells used books,” Madhav explained. “But before withdrawing money from the piggy bank, I consult the excel sheet to find out the exact amount I will have left. This is because I am planning to buy a pair of shoes before my birthday in August which will cost me 450 Dh which means I need to save more than 150 Dh by then.
Since his pocket money mainly comes from doing household chores and annual Diwali donations, he has to plan his spending carefully. “That’s why I rarely buy things like candy and tokens from the vending machine at school.
“Besides the comics, the only other things I bought with my pocket money were a birthday card and a set of stickers for my dad at Dh25.”
#2: Tip for instilling the habit of mindful spending in children
Shankar introduced Madhav to the concept of pre-loved books, as a brand new book would easily cost more than double the amount he currently spends as the total bill.
“It’s our way of teaching Madhav to consume responsibly and sustainably from an early age. It’s always a matter of choice, so whenever possible, he goes for second-hand while buying new,” Shankar said.
Talking about brand new things, recently Madhav went to a mall with his parents where he liked a bag and bought it. “There were two options, one slightly pricey lower than the one I chose which cost around Dh250. So, my dad asked me to chip in DH50 and agreed to pay the rest of the amount. I agree that 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 bought the bag for Madhav without asking him to part with his hard-earned pocket money. But that wouldn’t have made him feel like he deserved it. And the rewards must be earned.
For example, we make it a point to buy him birthday presents that he really wants, but for the rest of the year, every reward should be earned. It’s also something children need to learn from an early age to feel good about their accomplishments and value the things they hold dear.
At the same time, whenever Madhav volunteers to do something good, whether it’s helping a friend at school or babysitting a dog for a family friend, Shankar makes sure that he is rewarded. “My mom treats me to ice cream,” Madhav shared with a dazzling smile. “When I got a certificate from school for successfully completing some tasks I signed up for beyond schoolwork, she also took me out to dinner at my favorite restaurant.”
#3: Trick for Kids to Teach the Value of Earnings
Apart from planning big purchases like the bag or a pair of shoes, Shankar also taught Madhav to review his spending. “This is because by reviewing the excel sheet he will have a clear idea if he has been paid for all the tasks performed.
“Since we sometimes borrow coins from him, it’s our way of making sure he makes sure we get paid back on time. It’s through such small things that children learn to estimate their income, while learning budgeting skills.