UAE: How pocket money can teach your children financial literacy

Parents in the Emirates advocate transparent, enjoyable, and interactive approaches to educating kids about money management


Nandini Sircar

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Published: Tue 20 Feb 2024, 6:00 AM

Last updated: Wed 21 Feb 2024, 3:05 PM

Several parents in the UAE are instructing their children to set aside up to 50 per cent of their allowance, aiming to impart financial management skills.

Despite the allure of spending all the money, particularly in a country with numerous attractions like the UAE, parents are actively fostering a savings habit in their children.

They are trying to achieve this by promoting transparent, enjoyable, and interactive educational approaches.

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Goals and rewards system

Parents explained they are focused on the importance of youth financial literacy by incentivising responsible spending and saving habits, often through a goals and rewards system - nurturing the next generation's ability to be financially responsible.

American expat in the UAE, Naeema Zaki, who is a mother of three children, said, “About two years ago, we began giving our children a weekly allowance of about Dh20.” She explained this allowance was meant more for “spending cash” or “pocket money” rather than savings.

Naeema's children
Naeema's children

“Our aim was to teach them the value of money, encouraging them to make decisions about their spending instead of constantly asking us for everything they wanted. They earn their allowance by completing basic chores around the house, such as making their bed and cleaning up their toys. They receive their allowance each Friday after school,” she added.

Making better decisions

Zaki explained one significant takeaway from the exercise is that it has helped her children make better decisions about money and their spending habits. “They've become more ‘conservative’ with their spending when it comes out of their own pocket money. That’s a win for us. They've also become aware of price differences, understanding that larger supermarkets tend to charge more and that venues near special events like Global Village and airports often have higher prices. Additionally, they've learned the benefits of buying in bulk versus individual items, directly gaining insight into unit rates.”

She stressed that the reason she continues this practice is the genuine gratitude her children express when she is buying them something. “As opposed to when they used to constantly ask for things. I actually get a big ‘thank you’, when I don’t make them spend from their own money. I am growing more interested in apps or even getting them a children’s bank account a little later.”

Money management

Similarly, Filipino expat Ben Lebig, whose daughter is in Grade 10, said, “As a registered financial planner who teaches personal financial planning as part of my advocacy, I strongly support teaching our children the fundamentals of money management at a young age. Giving them pocket money allows them to learn how to properly handle money, how to save, and how to prioritise in how they spend their allowance.”

Lebig highlighted his daughter, Isabella, who is already an Amazon-published author, has a unique setup since she earns through the sale of her books on the platform.


“So, we teach her how to manage her money. For example, 50 per cent of her income goes straight to savings, between 10-20 per cent she can use to buy stuff she likes, and a big portion she donates to her charity. If we have to give her money it’s not on a regular basis but we do monitor her spending regularly.”

“Since she is exposed to money at a very young age she can appreciate the value of money, so her spending is controlled,” he added.

Intelligent choices

Educating children on money management at an early age can equip them with a crucial life skill to make intelligent choices, experts have said.

Pioneer of an initiative that teaches children about finance, Marilyn L. Pinto, Founder, KFI Global, said, “Starting young gives them so many advantages. Studies have shown that they fare better in other subjects, they are better prepared to start businesses, they can start saving and investing early.”

Marilyn L. Pinto
Marilyn L. Pinto

She added, “With the increasing rate of financial scams, being financially educated prevents youngsters from being taken in by these scams because they are now aware of what are the red flags that they should look out for, and they understand more about how financial fraud works.”

Teaching youngsters how to make smart money decisions is crucial because the information gets hardwired at a young age, and they instinctively make better decisions.

Girish Hemnani, Life Coach and Energy Healer based in Dubai, said, “Pocket money is a fabulous idea to teach financial literacy as soon as possible. Just like more people are becoming aware of the importance of emotional intelligence while growing up, the same goes for acknowledging the feelings and association with money. Hopefully, financial literacy and emotional intelligence soon shall be an integral part of the school curriculum with more relevance to the real world.”


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