How to do pocket money for your kids the right way
Are you a pocket money kinda mum, or not? Most parents give their children pocket money at some stage. But there’s definitely strong feelings amongst the masses as to when to give pocket money, how much to give and whether or not your children should do chores for their pocket money.
Basically, it’s all about you as a family. About what you believe in, the way you want to raise your children, and your own personal situation around time and money.
Whether you’re already $$$ into the pocket money thing, or you’re thinking about giving your child pocket money, but are not sure how to structure it, here are some tips to help you along the way.
WHAT YOU NEED TO KNOW ABOUT POCKET MONEY
What age should I start giving my kids pocket money?
You can start giving your child pocket as early as you like. A good time is when they develop an understanding of how we need money to buy and do the things we want. This is something you can teach in early play and everyday life. It also helps if they understand the concept of saving, even if it’s just to the point of ‘if you spend it all today, there will be nothing left tomorrow’. With many children this is around the age of five, but consider your own child’s needs, personality and sibling influences.
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How much pocket money should I give?
The big question! How much pocket money you dole out depends on your own financial circumstances i.e. how much do you have to give!? It also depend on the age of your children and whether they do chores for their pocket money, and if they do, then what chores. Also, what do you expect them to use their pocket money for? It may be that you pay for everything for them, so it is just extra spending (or saving) money. If they are older, you might give them more but expect them to buy their own clothes etc.
Should my kids do household chores to get pocket money?
Now this is a tricky one! And there is no right or wrong. Many parents want their children to work for their money as it may instil a better work ethic later in life. Others believe the children should help with chores around the house regardless of money. Either way, money is a motivator so if you want something done, adding a dollar sum to it may help! The Barefoot Investor (Scott Pape) recommends three age appropriate household jobs per week over and above helping the family with general chores. Another way is to give pocket money based on school grades and performance. Choose what works best your family and your children.
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When should I give out pocket money?
Try to stick to a regular time to make your payout. The beginning of the weekend can be a good time so they have money to spend when at the shops with you or out with friends. If they need help saving, you might like to leave it longer between payouts, say two weeks or even a month. It’s good for children to know when they will get their pocket money as they can plan what they will do with it, or even try to increase it with extra chores around the home.
Should I encourage my children to save their pocket money?
If you give your child pocket money, you may also like to advise them on what to do with it. This is a great time to teach your children about money. Never is money so valuable to them as when it’s theirs! Again, you can get some great tips from The Barefoot Investor for Families by Scott Pape. He recommends three simple jam jars labelled Smile, Splurge and Give. The brilliant peeps at MoneySmart recommend the same, so it’s a great starting point and teaches the importance of saving, spending and giving. Allowing children choices with their money is important so they can make their own mistakes and learn from them before the stakes are higher.
Should I give pocket money in cash or on a card?
Money experts tend to push that pocket money should be in cash as kids learn visually. While this is important, the world is veering more towards card payments, so teaching kids about cash and cards is a valuable lesson. There is nothing like the delight of being handed shiny coins or fresh bank notes. But there are some great apps for electronic money which are just as exciting. Spriggy is a brilliant tool to prepare your kids financially under your watchful eye. There’s a digital account for you called the Parent Wallet and a Spriggy account (with flash card) for your child, plus the option to earn additional pocket money through parent controlled jobs.
How to stop arguments about pocket money?
Money is a powerful tool and you may find yourself using it to bribe your kids more than you’d like. Taking pocket money away or lowering it may teach your child a lesson but it could start an argument. To keep the peace around pocket money, have strict rules about how it works in your house, and stick to them so everyone knows where they stand. Write them down and put them somewhere they can be seen and referred to if needed. Tell your child when and why pocket money will be given or withdrawn, and don’t give in if they argue against it. For older children, allow them input in the pocket money process, this way they will be more understanding when you have to enforce the rules.
What if my child is not interested in pocket money?
We always say money motivates, but not for all. If your child has not yet grasped that money makes the world go round, then you may need to incentivise them. Maybe pull back on treating them with your own money and encourage them to earn treats. Talk about what they might like to buy, how much it is and how long they would need to save for it. Use a reward chart to track their savings and make a big hoo-haa when they reach their savings goal.
What are some other ways my kids can earn pocket money?
If your children have ravished the bank of mum and there’s nothing left to give, they can find other ways to make pocket money. How about:
- Selling unwanted toys
- Walking the neighbours dog
- Offering to do chores for other family members
- Babysitting younger siblings or the children of family friends
- Baking cakes to sell or have a lemonade stand
- Sell old toys on Ebay