8 min read

Should you give your children pocket money?

Young boy who is really excited about making a tower out of coins

The average amount given to kids aged eight to 15 in the UK is £7.04 a week, according to Halifax’s Pocket Money Survey 2017. And, encouragingly, this survey found that 80% of children stash away some of this money in a traditional piggy bank.

OneFamily has created a Pocket Money Calculator to help kids learn about money management. The interactive tool allows children to work out how much money they could have depending on how they choose to save or spend their allowance over a set amount of time.

Helping kids to save teaches them about the value of money, and could give them a better appreciation of the things they own if they’ve had to save up to get them. Pocket money could give your children an incentive to do household chores and homework. And you could also encourage them to give a portion of their money to a good cause they would like to support.

Paying for chores

Mum of two Lucy has a five-year-old daughter and an eight-year-old son. She gives her son £1 a week to put on a GoHenry card, a pre-paid Visa card for children as young as six. “He always saves it to buy something he really wants, usually Harry Potter based,” she says. “Both my children have the opportunity to earn extra for their money boxes by helping around the house.”

Depending on your child’s age, there are various kinds of jobs they could do to earn their pocket money if you are happy with this idea, and it’s never too young to start. Camilla pays her six-year-old 5p per pair of socks he folds, and says he also likes to help out with other jobs around the house.

Should pocket money be earned?

Some parents argue that children should be expected to do chores just because they are a member of the household, and shouldn’t be paid for this. But others think it gives children greater pride in the money they have if they’ve worked to earn it. As a compromise, you could always choose to pay them pocket money for some household jobs and not others. This is what Lucy does: “Hoovering, mopping, hanging out washing, folding clothes and sweeping the garden are all ‘paid’ jobs, tidying their bedrooms and putting away toys are not.”

Caroline says her and her husband disagree on this issue: “I think they should get pocket money, and I’m not talking a lot, as a separate thing as it’s a life lesson in managing finances. He thinks they need to do chores to earn it. My view on that is they should contribute to the household as part of a family unit, not for financial gain. They use things and create mess so can be part of sorting that out!”

It’s a similar issue with whether you should charge your adult children rent. Some parents feel it’s only fair adult kids still living in the family home, should contribute to the costs, whereas others believe that due to the financial pressures on Millenials, they deserve to be cut some slack.

The value of money

Carol says pocket money really helped her kids to understand the value of money and how to budget. “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.”

Lorraine has two daughters aged 11 and 13 and she gives them an allowance of £20 a month, which she says has given them more awareness of the prices of things. “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.”

Weaning kids off pocket money

Encouraging teenagers to get a Saturday job or a paper round when they’re old enough could mean you can start to wean them off pocket money.

Rebecca has a 13-year-old daughter who gets £20 a month pocket money on the understanding that her daughter keeps her room tidy, helps around the house and gets good grades at school. “I pay for her phone, essentials like school kit and shoes, and she pays for anything extra like make-up. She also has a paper round that earns her £7 a week.”

She also uses pocket money as a way to manage behaviour: “I have stopped the pocket money once for bad behaviour and lack of helping out.”

It might not be popular with the kids, but withholding pocket money could be an effective way for parents to show them that an allowance is a privilege, not a right.

 

Written by Hannah Smith – Financial Journalist

Note: Whilst we take care to ensure Talking Finance content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions.