THIS week’s column is devoted to bringing to your attention a new product that is designed to educate children about money.
The Pocket Pal system was created and designed by Neil Fairhead. If it delivers nothing other than a simple understanding of some of the features of the monetary system to our children it will have performed a great service.
We live in a world that revolves around the creation and maintenance of wealth.
Unfortunately, there is little taught at our schools to enhance our children’s understanding of money.
The Pocket Pal system is simple and comes complete with instructions to parents to implement it.
You start out with the rate card, where you enter into enterprise bargaining arrangements with your child to strike a rate that will apply to payments for chores. The card becomes the starting point of transactions.
Each week your child submits a job card similar to an invoice. When you pay the child for the services rendered some tax will need to be deducted. A rate of 10 per cent is suggested.
The child is able to enter into income insurance to ensure that in the event of inability due to sickness to perform any duties, they will be covered by the same amount as their income from the previous week.
Your child will receive a cheque book into which you deposit their pay. Balancing the cheque book and cashing their cheques through you (their personal banker) will become second nature to them.
Some 20 per cent of everything they earn will be transferred to a savings account to provide for their medium and long-term goals.
A credit card with an interest rate of 5 per cent a month is issued to the child.
At that interest rate they will learn fairly quickly that credit cards are a two-edged sword. While the convenience is important the cost can be debilitating.
Pocket Pal is simple and does not require any software or other materials. It is designed to teach children about money and if it achieves this then it is a worthwhile exercise. It costs $49.95.
