Pocket money can be a tricky subject and if you get it wrong it can lead to all sorts of upset. Check out our 9 dos and don’ts to help you survive!
Do set clear expectations
Before giving your children pocket money, it’s important to establish clear rules and expectations for how the money should be used.
You may want to give your children money for fun things certainly, but as they get older you might choose to give them the money to buy their own clothes and shoes, pay for haircuts or other personal needs.
This might also include setting limits on how much can be spent on certain items, encouraging saving, and discussing the consequences of overspending.
By setting clear expectations, you can help your children develop good habits around money and avoid the pitfalls of overspending.
Don’t tie pocket money to chores
While it’s important for children to learn the value of hard work, tying pocket money to chores can create an entitlement mentality and diminish the value of the money earned.
It is also true to say that your child may simply choose not to do a chore and give up the money attached to it!
Instead, consider assigning chores as a responsibility of being a part of the household. This will certainly help when they move out into the side world and end up sharing a flat or become a part of a student household at university.
Do encourage savings
One of the most worrying things about society is how few people have a good savings safety net. Schools rarely teach financial responsibility so suing pocket money as a teaching opportunity is helpful.
Encourage your children to save a portion of their pocket money for a long-term goal. This can help them develop good savings habits and teach them about delayed gratification. You could also offer to match their savings, as an extra incentive.
Don’t give too much
While it’s tempting to give your children a lot of pocket money, it’s important to give an amount that is appropriate for their age and needs. Too much money can lead to a sense of entitlement and a lack of appreciation for the value of money.
It’s true to say that every family is different as is the notion of ‘too much’ so it is important to be aware of how much children get on average and then adjust that for your own family circumstances.
Do use pocket money as a teaching opportunity
Use pocket money as a way to teach your children about budgeting, saving, and making responsible financial decisions.
Talk to them about the difference between needs and wants, and encourage them to prioritise their spending accordingly.
Explain how they can save in the short term for something they would like and also as per our point on savings how that differs from a long term goal.
Don’t take away pocket money as punishment
Taking away pocket money as punishment can create a negative association with money and diminish the value of the allowance.
If you started out telling your children that you are giving them cash to pay for clothes or personal care items then they don’t need less of those if they have behaved badly.
Instead, consider assigning extra chores or giving a different consequence for misbehaviour.
Do be consistent
Children love rules and boundaries. It allows them to make sense of the world and understand what the unwritten rules are.
So it’s important to be consistent with the pocket money arrangement. Set a regular schedule for when the money will be given, and make sure your children know how much they will be receiving. If you need to adjust the amount or frequency, talk to your children about it and explain your reasoning.
Consistency is really important when it comes to the amount and frequency but it is also important regarding reasoning so make sure that if you give money for a particular reason that you carry that login on for other things.
Don’t believe the hype
Every parent faces the dilemma of their child coming home from school and explaining that their friend gets X amount and they think they should too.
Well we can tell you that kids are expert emotional manipulators and the stories you hear when it comes to pocket money are rarely the truth, the whole truth and nothing but the truth.
Don’t be swayed by the fact that the child at school with the richest parents gets more money and don’t believe it when your child tells you with absolute sincerity that “all my friends get that”.
Choose the reasons that you want to give money and how much you want to give and if they are old enough, explain to your child that they can always get a part-time job if they’d like more!
Don’t compare the market
Most important of all, don’t compare yourself to other parents.
Your situation is totally unique and the reasons you give pocket money will be as part of your family decision making and bears no relation to anyone else’s situation.
Comparing yourself to other parents will simply lead to feelings of inadequacy and a belief that you are a bad parent when nothing could be further from the truth.
Make your decisions, be happy with that and don’t compare the market whatever you do.
Pocket money is a difficult subject
If you are having difficulty deciding whether to give your children money or how much then don’t worry, this is a tricky subject and does take some thinking about.
Remember that pocket money can be a valuable tool for teaching children about financial responsibility, but it’s important to approach it with care and establish clear guidelines and expectations.
We feel that by following these dos and don’ts, you can help your children develop good habits around money and set them up for a lifetime of financial success.