Pocket Money Tips for Parents
When does a few coins for treats become regular pocket money? And how old should your child be before you starting giving it? Here are a few tips.
We always want to give our children what we can where we think it will be best for them, but how do we go about giving them their own pocket money? How much should we give? And when does pocket money become an allowance?
Is pocket money a good thing?
Whether you think pocket money is a good idea or not, the first thing to consider is – can you afford to give it? Although your child might nag about having their own money, the most important thing is to manage their expectations according to what you can comfortably give.
If it’s going to stretch you and make you worry about finances then the stress of trying to keep up promises you can’t really afford is going to make your home less happy. Being at ease as a family is far more valuable than a child who is happy for five minutes after being bought a new toy.
How much on average do kids get these days?
A survey released by Halifax in January 2009 showed that children’s pocket money had on average gone up by four times the rate of inflation in the past two decades! They were comparing figures with a pocket money survey for the Little Extra’s Club in 1987. At that time, the average every child received was £1.18 and now it is a whopping £6.13 per week. And take note parents in London – in the capital the average is £8.47 per week!
Incredibly, pocket money has on average come down by about £2 a week since its peak in 2005. However, giving your child more than £5 each week is extremely generous and, of course, should be scaled depending on the age of your child, what items their money needs to cover (for example if they have to buy storybooks etc. as well as sweets), and vitally, how much you can afford to give week in week out.
What if I can’t afford to give my child pocket money?
If this is the case, offer small treats as and when you can afford them - once in a while a major day out at somewhere like Legoland can be on saved up Tesco vouchers, for example, or you can give a little bit of money when you can, at the beginning of the holidays perhaps.
You don’t have to burden your child with your money worries, but there is no harm in your child appreciating that funds and treats don’t come easily.
Pocket money vs cash for chores
Some parents prefer to offer children ‘pay’ for doing little jobs around the home, in order to give their children the value of earning it.
Whichever way you go, make sure your child understands that this money is linked to a time in their lives when you feel they can manage that little bit of financial independence.
And don’t forget, there’s no harm in reminding your kids that the money comes from what’s been hard-earned by mum and dad!
Sam from Barnet, who has just turned 8, is a big believer in earning his rewards. “After my birthday, when I got extra cash instead of presents, I realised that having my own money meant I could buy much better things. I get £2 a week and sometimes I want to buy Match magazine or Thumb Wrestlers. That’s how I used to spend all my money. So now if I do things like washing or sorting recycling stuff for my mum, I get some extra money to save up for the Playmobil sets I really want. Mum gives me £2 for putting on a clothes wash and hanging it out, and I get something like 50p a time for other jobs like sorting out the piles of DVDs!”
What age should I start giving my child pocket money?
Until your child is aged about six they won’t really understand the value of regular small amounts of money. Until then you can just suggest the occasional trip to the shops with some of the money set aside from birthdays or Christmas.
With smaller children, you might want to put most of their accumulated gift money in one place for now – possibly adding it to a bank savings account, especially if you are building one up from a Child Trust Fund (eligible to all children born on or after September 2002).
If you feel your child is ready a little earlier than this, or possibly later, then there’s no reason to rush into giving pocket money just because their friends might be getting it already.
Don’t forget - between the ages of five and seven your child may well be getting a fairly steady income from the tooth fairy, anyway!
How much money should you give?
Again this is completely at your discretion. However, until they are around 10 years of age, anything between 50p and £2 a week is more than enough. You should still be overseeing what they spend their money on and can always top up special purchases if you feel they are suitable, with saved up birthday cash.
The main aim during these years should be that they learn the value of saving for something important, and when to spend a little at a time on smaller items. For example, if they collect football cards or little toy cats or dogs, remind them how much money they have spent week by week so they can assess whether they might actually have preferred to splash the saved cash on something bigger!
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