Pocket Money – How Much? I’m not very good at pocket money, it’s a bit willy nilly. Each of the children is supposed to get pocket money on a Saturday but we forget to give it to them, and they forget to ask. Then suddenly they’ll announce we owe them 300 weeks of pocket money! I bought little books for each of them so they could write down what I owed them and what they had borrowed off me – but of course they lost the books. Susie ~ 2 daughters & 1 son (9, 12 & 14 yrs) I fell out with my husband at the weekend. Our daughter wanted some new clothes and asked my husband for some money. My husband just gave her the cash, he didn’t check with me or think about if she would spend it properly. I said to him that it isn’t right for a 13 year old girl to get money whenever she asks for it. She needs to attach some value to money and to think about where the cash she needs or wants is coming from. Carolyn ~ 2 daughters (9 & 13yrs) Whilst carrying out our discussion groups we became more and more interested in the subject of pocket money and how different families deal with it. Many parents we spoke to felt that pocket money was a good way to teach their children about the value of money. There was a great deal of consensus about the benefits of giving pocket money. However, despite the support for the idea, and a lot of parental good intentions, many families haven’t got the hang of making pocket money work. So below we’ve started by summarising the benefits of what we’ve learnt, from families who make giving pocket money work for them. Then we’ve included a few practical pointers for families who like the concept of pocket money, but have yet to get organised. Parents were pretty much in agreement that giving younger children pocket money, and older children an allowance, helped them to understand how to use money properly. Childhood is a great time to develop the saving habit because children have so few demands on their cash – no heating, car insurance or supermarket bills to pay! Children get a great sense of achievement from saving for something. Learning to count the money, keeping it safe and spending it in shops is all useful practice for children – and it means more if it is their own. If children experience the satisfaction of being in control of their own money they are inclined to want more of it. They have “tasted” the independence that having their own money gives them. This means they are more willing to do paid jobs around the house; and, when they are older to look for part-time jobs outside of the home. Giving pocket money helps children develop an understanding and respect for the money that is earned by the parents; and, in some families parents think this has translated into children taking better care of things in the home. They seem more likely to develop an understanding that there is not an unlimited supply of money to replace scratched DVDs. With younger children, pocket money can be a useful tool to restrict how many sweets a child eats, and also to avoid a scene in shops when a child demands to be bought something.
We run a bonus chart. The boys get a nominal amount of pocket money which they can boost by doing certain things, like: putting their dirty clothes in the washing basket, feeding the fish, bringing the Guinea pigs in and doing their homework without being nagged. They can earn an extra 50p or so for doing this – they are good at it for about 3 weeks but then it drifts back. It does work to a certain extent, although we do have to get at them a little bit. We did hope that the chart will stop us having to remind them about their jobs. Perhaps one day they will have got so used to doing I and we won't have to remind them. Deidre ~ 2 sons (7 & 9 yrs) We moved to the allowance system when my eldest son was 14 because he didn’t like the clothes I was buying him. He has to pay for absolutely everything out of his allowance - the clothes he wears to school, the cinema, going out with friends. I buy his sports gear but he buys everything else. My younger son also now gets the same type of allowance and is very happy but he looks like a tramp because he won’t spend the money on clothes. I have to nudge him to buy shoes and so on. We pay the allowance by direct debit into their bank accounts. When we go shopping I sometimes “lend” them cash, if they haven’t been able to get to the bank. We have a cash book we write this down in and I do make sure they pay me back. Kit ~ 3 sons (9, 14 & 16 yrs) So how do you operate an effective pocket money system? The families that succeed gave us the following ideas: Pay it monthly, then it’s much easier to remember. Either the first day of the month or the first Saturday of the month seems to be the favourite time. For older children consider paying it by direct debit into a bank account. One mother suggests that, if you can spare the cash, you consider make up envelopes, with the pocket money in, at the start of the year: one labelled envelope for each child for each month. So even if you don’t give it to the child on the due date you’ll know exactly where you are and which child has had what. This is good for younger children who don’t get a large sum. Be very clear what the children are expected to fund from their pocket money – for younger children it really only works well with sweets, ice creams, smaller toys and holiday souvenirs. Don’t undermine the system by buying them lots of extra treats. In general children under 7 do not save well and it is counter productive to make them try. As they get to about 8 they can get the hang of saving for bigger items and for using their own money to buy other people gifts. To help them save, you could try drawing out a chart showing how long it will take and the progress they are making. Consider paying them interest to encourage them to save (see the quote from Sue below). When they have saved enough for a bigger item, take them shopping with you and let them hand the money over themselves – getting it on their behalf isn’t so much fun for them and they don’t get the same sense of achievement. Some parents feel strongly that items bought with the children’s own money have special status and a child shouldn’t be made to share or lend them.
I am hopeless with money and I am desperately keen that the children learn to budget and save better than I do. To encourage this we pay the children interest on any cash they have in their money box at the end of the month. We actually pay 10% a month, I know that’s generous but it is easy to work out. They actually count the money themselves and then come and tell me how much I owe them. Recently I came across my daughter working out how long it would take her to save £40 for a computer game she wants. She was allowing herself to spend a little but to save at least ¾ of her allowance. She also set herself a target of earning £5 a month. She seems to have got the hang of money management at 10, perhaps she could help me? Sue ~ 1 son & 1 daughter (8 & 10 yrs) I come from a family of spendthrifts and I have always been a spender myself. I desperately want my children to be better with money than I’ve been so we use their allowance in what I hope is a positive way. Firstly up until 10 they get a pretty nominal amount of pocket money, but at age 10 I ramp it up to £1.50 a week. Then we pay it out at the beginning of each month – so they have to sit down with a calendar and work out how many Saturdays there are in the month and how much we owe them. I also pay interest on anything they have saved in their money box. They get a rather generous 10% month, so if they’ve £5 in their money box they get 50p extra allowance that month. This was a strategy I developed to try and stop my daughter buying endless pink plastic tat. She would ask for some lurid hair set and I would say she could buy it out of her own money but would also remind her “interest day” was coming up so why didn’t she wait a bit? It seemed to work and she is noticeably more careful about what she buys now. Both the elder children have been successful in saving up for major purchases themselves – PS2 games and a portable CD player. Most families with “pocket money savvy” advise against making pocket money dependent on helping around the house. Many of our interviewees believe that children should do a certain amount to help because they are part of a family, not because you pay them. The suggestion is that you pay them for helping with bigger jobs, such a spring cleaning or painting the garden fence, but not for emptying the dishwasher or making their bed. Paying them to do jobs is a good way for them to understand the difference between essential spending, like food and clothing from optional spending like computer games and days out. It is so easy for children to take the luxuries in life for granted, and as a consequence not to value them or to enjoy them as much as they ought to. Recently my daughter desperately wanted to book a holiday drama course – I said yes if she earned £20 towards the cost by half term. Her happiness and sense of achievement in earning the money was lovely to see. The help she gave around the house was also wonderful – even if she doesn’t enjoy the drama course it will have been a worthwhile exercise! Jane ~ 2 sons & 1 daughter (1, 7 & 9 yrs) We are going to do more on how to get children to help around the house in our hot topics section – especially how much should they help and how to encourage children to be willing to help. If you want to be kept updated on new hot topics then click the 'Contact Us' link second right at the top of the page to let us know. You can also use this link to ask Karen and Caroline for confidential advice. Check out our Café Board discussion forum as well – see the link centre left above. |