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Is Pocket Money a Good Idea?
Do you give your kids pocket money or do they have to earn it? Do your kids save it or spend it? How much is appropriate? If you have kids, you have most probably thought about the pocket money issue. It is important to think carefully about it, because parents’ attitudes to money will arguably affect the financial and budgeting skills of their kids later on.
Pocket money – earned or handed out?
There are plenty of kids who simply receive pocket money from the bank of mum and dad. Every week or month they get a handout of a few pounds or more simply to spend on what they like. The major problem with this is that your kids could get the message that money is free and their parents are like a wonderful money tap! Also, when does it stop? As your kids approach 25 years old are you still going to be handing out money so they can fill their car with fuel or pay their rent? Kids who have never needed to stand on their own two feet where money is concerned, probably never will.
Kids – like mine – can earn the money they receive. They can do tasks that are relevant to their age and ability. The 9 year old child of the house can do a fabulous job of dusting all around the house (skirting boards too) every Saturday. The teenager can wash the car, or help out with the laundry. There are certain jobs that your child can do without payment too. Taking care of their bedroom for example, and making their beds in the morning. These are chores that are expected rather than extra and you can make two lists of jobs so that your kids know where they stand. By earning their money, your kids will get a clear message that money is not free and if it is earned it is more likely to be appreciated and spent wisely.
Pocket money by age England 2012
|Age||Average pocket money|
|8 years old||£4.44 per week|
|9 years old||£4.81 per week|
|10 years old||£5.22 per week|
|11 years old||£5.65 per week|
|12 years old||£6.60 per week|
|13 years old||£6.68 per week|
|14 years old||£7.61 per week|
|15 years old||£8.38 per week|
Pocket money – spent or saved?
Ok, so however your kids get their money they will either spend it or save it. Many parents I have spoken to have been exasperated when their little angel has blown the lot on a £3.99 comic (aren’t they a rip off these days!) and a bumper bag of Haribo. There are some clear lessons to be learned here. First of all educate your children to save for something that is really wanted and worthwhile. Secondly, by making your children earn the money they spend you can point out how much their wasted purchase has really cost. For example say to your child, “do you realise that comic has taken you and hour and a half of housework to earn?” there is the strong liklihood that your offspring will realise that it really was a waste of money!
Pocket money – none at all
There are parents who choose not or can not give their kids pocket money. Money is scarce these days and giving money to the kids is a struggle for many families. Other parents buy everything their kids need and do not see the necessity in giving them cash of their own. Whatever your circumstances it is worth thinking about when you will educate your kids for their financial future.
If money is tight, you may involve your little ones in budgeting for the family food shopping. Say to them “you can choose a cereal and a bottle of cordial for yourself but it has to cost £3″ for example. This way, you are giving them pocket money of sorts, but your child is buying something that you would ordinarily buy anyway! Educating your child to spend money wisely like this won’t cost you an extra penny.
Is buying everything for your child and not giving them money really a good idea? These children will probably never know the value of anything. Possessions will be disposable and ‘cheap’. There is the danger that they will expect everything for free and not appreciate that mum and dad have to work jolly hard to provide the things they have. Consider getting a piggy bank for your child to save copper coins for something they want but you would normally buy without question. Saving for a new DVD for example, could take a long time. This way, your child will get the message that saving for things is how most people get what they want and that mum and dad do not have a money tree!
Wherever you stand on the pocket money debate, bear in mind that now, more than ever before, we need to educate our children in financial decisions. With today’s economic climate I would rather my children become financially competent and independent when they fly the nest – wouldn’t you?