There are many issues that parents encounter during the course of their child’s life that will divide opinion and one of the most fearsome can be the debate about pocket money. For some parents, it is simply a little amount given to the kids each week without any real thought about earning it or what they do with it. For others, it is the first step to earning a living and budgeting their household. So what are the pros and cons of pocket money and does it teach kids the value of money?
How much and when
One of the main questions parents ask is how much pocket money to give and when to give it. Many say that they start dishing out the cash when the kids reach the age of seven or eight. By this time, they can understand the different coins and what they mean, add up enough to work out how much things costs and also, if there are chores involved, be big enough to complete them. Some choose to start earlier and use the giving of small amounts of money as a way of learning the kids about our currency as well as counting. Counting up a big pile of pennies is great practise and makes younger kids think they have a fortune!
Studies show that in 2013, the average pocket money paid to children had actually dropped in recent years, probably due to the financial constraints many families faced. The average amount given to an eight year old was around the £6.50 mark, rising to around £8 when kids were in their mid-teens. The biggest deciding factor, of course, is the family finances and how many children there are. Pocket money shouldn’t be taking funds away from essential items, no matter how desperate the kids are to have their own funds.
Earning pocket money
For some parents, pocket money isn’t something is just provided regardless of any factors – it is something that has to be earned. Their belief is that kids need to learn from a young age that money doesn’t grow on trees, as the old saying goes. They need to learn that working for something has its rewards and this can then be used for other things they require.
It also has the benefit of learning kids what it means to look after a house or at least a part of it. Some parents make a tidy bedroom the condition of the pocket money while for others, a set rota of jobs around the house is the answer. Empty the bins, mow the lawn, wash the car, these are all favourite kids chores that are used to gain the reward. It helps teach the kids that you have work for money, rather than it simply appearing as required.
These little jobs done can also be a big help around the house if there are working parents and the kids can feel they are an essential part of the household. They contribute to keeping everything right and are crucial to their parents. As one parent put it, they are ‘part of the team’ and are helping the house run smoothly.
The down side of this can be when the kids won’t do any chores without a financial reward involved. No cleaning of the bedroom unless there’s a monetary bribe involved. So balancing paid chores and unpaid chores can be the answer and perhaps not stipulating which ones will get them the cash. It’s a lottery – do them all right and you win but you never know which one is actually getting you the money to slack off on the others. Another suggestion is that the chores come before pocket money – get them doing little jobs from a younger age and introduce pocket money to them around eight. By this time, the chores will be normal and the funds a nice additional bonus for work they already do.
Pocket money can be a great way to learn kids about managing their money and start off with habits that will hopefully stand them well into adulthood. Kids always want something, particularly when they go to the shops. While giving them pocket money doesn’t have to mean you can no longer buy them treats without risking being a bad parent, it can mean that you can learn them about saving up for something a little more expensive. So they want the latest Lego set, Barbie doll or computer game – explain to them how long they would need to save at their current rate to get the item. Perhaps incentivise them! Get them to do extra jobs around the house for bonuses and let them see how much quicker this will get them to that desired number.
Some parents make their kids save their pocket money even if it isn’t for a specific aim. A family holiday on the horizon can be one reason or a special trip somewhere that a larger than normal amount of spending money would be a good idea for. The key here is to making them understand why they have a spending ban in place – perhaps explaining the costs of the holiday can help with older kids.
A thoroughly modern idea about pocket money is to get a pre-paid children card for kids from the age of eight up until eighteen. Using a website such as goHenry, parents deposit an amount of money into the account they have opened and a week later, the child receives a card through the post. This card can have limits set in place as to a weekly spend as well as tasks and spending rules as well. It even means you can adjust the amount if they have done extra jobs, such as chores around the house, or a special accomplishment at school. You can also dictate where they can use the card – withdraw money at cashpoints or in shops. And the card can be instantly blocked if it gets lost.
Whatever method you choose, the general advice is this – don’t give in pressure to do what the kids want rather than what you want. So their friend gets £5 and they only get £3? That’s life and while a hard lesson to learn, perhaps not a bad one to help them cope with the randomness of adult life and particularly finances.
Main image by Magnus D