Should children get pocket money?
Don’t just meet your child’s financial demands – teach them financial responsibility by having them manage their own budget.
Here’s a few ways pocket money can teach your child useful life lessons.
Saving for the future
A regular income allows kids to save regularly for the future. It’s an opportunity for them to learn that small savings can add up to something big over the long term.
The next time your child wants something big they know they can save up their pocket money to get it. This is a useful way to get your child to act responsibly with their cash – a behaviour that will serve them well in later life.
You could further encourage this behaviour by subsidising long term savings. For example, if they’re trying to save up £50 you could encourage them to save by contributing £10 once they reach £40. This can be a positive early saving experience for a child.
The value of money
If a child doesn’t have to pay for things themselves – out of their own money – they may not fully appreciate the cost of things.
“Giving my kids pocket money actually saved me a fortune. Instead of endless pester power, they were in control of their own budgets and started to learn the value of money: ‘wow, that’s really expensive – I’m not paying that’. And started saving too, for holidays and treats.” - Carol
Managing their own budget can help kids to understand what a pound can buy, what a good deal is and how prices compare. They will have to make decisions about what to buy and what not to buy.
“It has made them appreciate how much things cost. It’s amazing how price-conscious they are now they have to fund non-essential stuff themselves.” - Lorraine
Should children earn their pocket money?
Payment is a compelling way to motivate your child to help around the home. This can either be a requirement of receiving pocket money, or a bonus on top of their basic pocket money.
There are various kinds of jobs children can do to earn their pocket money, and it’s never too young to start. You might be just as interested in instilling a cooperative work ethic as making use of the cheap domestic labour.
“Both my children have the opportunity to earn extra for their money boxes by helping around the house.” - Lucy
School results
Some parents use financial rewards to encourage good performance at school. Of course it’s not your child’s fault if they struggle with a particular subject, so rewards could be based on effort rather than results.
How much pocket money should you give, and when?
Children in the UK aged between 4 and 14 receive between £2.73 and £8.03 on average. right amount of pocket money to give depends on the child’s age and your individual circumstances.
By the age of seven a child has typically developed some basic concepts relating to finance, according to research undertaken by behaviour experts at Cambridge University. That’s why it’s recommended to get children started with money as young as possible, even if it is small sums.
Weaning kids off pocket money
When is the right time to stop giving pocket money? You probably don’t want your child relying on you financially forever, so you should encourage them to find part time work when they are old enough.
Stopping pocket money altogether might seem too harsh, but it should be low enough to encourage a teenager to get out there and earn their own money.
Pocket money is a useful way to prepare your child for the future. From teaching them the value of money, to incentivising housework and academic success, leverage pocket money to your – and their – advantage.
