How to decide when to give your child pocket money and how much to give.
Most of us remember the thrill of receiving pocket money as a child, but as a parent, it can bring new dilemmas. When should you start, and how much should you give? Will they spend or save it wisely?
When to Start?
An *Experian survey found that 75% of parents/guardians start giving pocket money between ages five and seven. Once your child can count and understand basic money concepts, they're ready for pocket money, even if it's just a small amount every week. Tie it to chores like tidying up to promote earning.
Toy cash registers and playing shops are great ways to introduce young children to money. As they get older, involve them in real-life shopping to make money more relatable. Parental actions have a greater impact on a child's financial capability than any other education, so talk to your child about money and involve them in everyday purchases.
How Much to Give?
However much you give, they’ll always want more, so don't be swayed by comparisons. Consider:
- How old are they?
- What do you expect them to pay for?
- How much can you afford?
Advice on Spending
Receiving pocket money regularly and deciding how to spend it is vital for financial independence. Some parents/guardians let their children learn from mistakes, while others advise them. Encourage young people to think about purchases and differentiate between wants and needs.
To support your child/children to become more financially capable you could:
- Discuss household income.
- Show how to check a bank balance.
- Set money rules for the family e.g. pocket money, spending, budgets.
- Talk about budgeting and spending using everyday examples like the weekly shop or buying a gift for a friend or relative.
- Talk about how to save a little bit of money each week.