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How much pocket money should you give your children? It’s important to get it right as the amount you give can help teach your kids about the value of money, saving and spending, while gradually learning responsibility and financial independence. Here is our guide to the best way to ‘strike a deal’ with your children.
There is no right or wrong answer to this. How much you are prepared to give depends entirely on what you believe is fair. It depends on what you want your child to get out of it, and how much you can afford. Some parents feel that a child’s age should play a part in how much they are given. The older the child, the more things they will need to spend money on.
When it comes to deciding on pocket money for your child, start by considering what you think is appropriate for their age. Speak with the other parent to come up with a figure you both think is sensible. You might choose to each pay half of the amount. Also, think about what else you can give your child. For example, would a standing order from your account to there’s help them understand more about money? These may help them learn important skills for later in life.
If you are happy to buy the majority of things they want or need, you might not want to give them too much pocket money as well. It could also be handy to have a chat with other parents about how much they give their children. But whatever you do, don’t get sucked into competing with them!
Research from Child Trust Fund provider The Children’s Mutual has shown that 16% of parents feel like they are paying too much pocket money, but are pressured into keeping up with what other parents are giving. Only you can know what best suits your child (and your own pocket), so don’t ever worry about what others are doing.
Once you’ve decided an appropriate amount, sit down with your child and discuss it with them. You might like to make an agreement that they will get a ‘pay rise’ each birthday, or ‘bonuses’ for good work at home or school, this will give them something to look forward to, as well as some incentive to behave well and succeed. Or at least to try their best.
Some parents prefer to set chores that need to be done before their child ‘earns’ their pocket money.
This is entirely up to you, and obviously will partly depend on how old your child is. If your child doesn’t do their chores and pocket money is withheld then they will learn that hard work yields rewards.
Of course, some parents may feel it unnecessary to pay their children for chores that should be done anyway. In this case, perhaps you can divide the chores into things that need to be done (eg. – cleaning their room or helping with the dishes) and extra chores they can earn pocket money from (like helping in the garden).
Another option is to set a minimum amount of pocket money: for example, £3 per week. Then offer an extra 50p (or whatever you think is appropriate) for any chores you’d like them to do that week, such as making the bed or tidying up the toys.
As they get older and their pocket money increases, these chores should become part of what is expected of them. You can even offer different ‘bonus’ chores. It’s a good way to show not only the rewards that come from hard work, but also how important it is to contribute at home as part of the family. Making your child “earn” their money will also help them to start appreciating its worth.
Remember, this is how a lot of bonus structures in companies work. So teaching these lessons may turn your child into the next Richard Branson one day!
Once your kids hit secondary school, there’s little doubt the whole pocket money debate will need to be renegotiated. Suddenly, your child is going to find they ‘need’ a lot more things. Be it clothing, gadgets, events, their current earning potential may not be enough to sustain them.
Be sensitive to all of this. Remember, it’s not easy being a teenager and there’s a lot of pressure to ‘fit in’. But don’t just cave in and give them more money when they’ve run out or buy whatever they want. Instead, use this as an opportunity to teach them about the value of things and the importance of saving.
You might like to agree to pay for the necessities, while giving pocket money for the fun extras. So decide with your child what you will and won’t pay for. Basic necessities might include: transport to and from school, school uniforms and supplies, clothing for day-to-day wear or a special occasion.
Extras could be things like going to the cinema or other trips with friends, fast food and other snacks you’re unwilling to pay for. It could also be beauty supplies, or even network subscriptions such as Netflix or Spotify. For bigger purchases, perhaps you can agree to pay for half of it while they save for the rest themselves. This may be a nice way to teach them about saving and kindness.
Decide when you will pay pocket money. You could decide to pay your child a lump sum at the start of the month, which has to last them till the next month. This will start teaching them the importance of budgeting and make them think about what they spend their money on. Rather than blowing it all in one go, they will need to learn to get by on what’s given.
Other handy tips to consider include:
If your child is old enough, you could encourage them to get a part time job. Keep in mind the restrictions that apply to young people in terms of working hours however. Monitor what they do to make sure an employer isn’t taking advantage of them.
Of course, there are also many other great ways for young people to earn money on a more casual basis. Things like babysitting or dog walking can work well. They might even like to sell their old clothes, DVDs and games on eBay or similar sites.
Pocket money can be a minefield for parents, so it’s no surprise that grandparents also feel a little unsure too. If you’re a grandparent wanting to give pocket money, then take on board the advice we have given, and give the money according to how you think is best.
If you would like your grandchild to earn their money, then put a list together of small tasks you know they could handle. Of course always keeping in mind their age and size. Windows need cleaning? You know exactly who to ask! It’s probably a good idea to talk over your plans with your grandchild’s parents, this way you can avoid stepping on anyone’s toes, keeping your plans in line with theirs.
You may find that they would be grateful for the help, and perhaps you could agree to go halves on the weekly amount. If the parents feel that their child is already receiving enough money, then consider investing what you were going to spend into a child’s savings account. This way they could use it when their older for something important like a car or house deposit. Pocket money can come and go, but savings may help your grandchild later on in life when they really need it.
Pocket money can be a useful tool for teaching your kids how to save. You can always encourage your child to keep some of their money for themselves, while putting the rest in a savings account, where they can watch their savings grow and earn interest. This way they could use it for something really special, a big purchase that they otherwise may not be able to afford, or may need your help to afford.