“Daaad? Please can I have some more money?”
If you’re a parent you’re bound to have heard this many times, and the easy option is to hand over a pound for a packet of sweets, magazine or toy. But we all know this is not the best approach for the long term, especially if you’re trying to teach your kids the value of money.
One of the advantages of regular pocket money is that it can be used to help children understand whysaving can be just as satisfying as spending. Childhood is a great time to develop saving habits as kids have so few demands on their cash, unlike parents who have bills to pay.
a few tips on teaching children money management through pocket money:
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encourage your children to put some of their pocket money aside each week or month for savings. Regular savings can encourage them to be thrifty in the future and teach them that saving can bring them closer to that more expensive purchase or something they really want
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be consistent - set a fixed amount and stick to it. This is important and can teach your children about salaries and how they work. Of course there are exceptions to the rules, e.g. for special occasions or when they have done something you wish to reward
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Finally, make it clear that the money is theirs to manage as they wish but they won’t be getting any more if they spend it all in one day. It’s important for kids to make mistakes so they will learn for the future.
so how much should you give them?
A good starting point could be to explain how your own income and expenditure works. If they’re old enough, it might be a good idea to show them how much you earn and how much goes on bills to feed and clothe them. This way they can see how you decide the amount of pocket money they receive.
The average amount of pocket money we dish out for our kids each week is £4.92 for seven to 10 year olds, rising to £8.22 for children aged 11 to 15 years.1
Ultimately it’s up to you how much pocket money you give your children, but teaching them the value of money could be beneficial for them in later life.
Like to know more about children’s savings? You could start by looking at our junior easy save plan which allows you to save towards a tax free lump sum. Alternatively, you may want to think about our child trust fund, another way to give them a financial head start.
1. London School of Economics Report quoted in the Daily mail 9/1/2010 http://www.dailymail.co.uk/news/article-1241765/Why-mannered-child-cost-6-000.html
