Should I give my child pocket money? In short, yes!

So, you’re thinking of giving your child/children/ kids some pocket money and you’re not sure of the benefits or how much to give them. Well, thankfully, there is research out there that explains the benefits of such a task and even indicates the average amount of pocket money for different age groups.

Why should we give kids pocket money?

I give my children pocket money — though I have only started doing so in the last 6 months. And I’m by no means alone. Seven out of ten parents in the UK give their kids some form of pocket money with the amount given going up with the age of the child. Research suggests many advantages to children receiving pocket money, especially when it is linked to household tasks to earn it. They are:

1. Better money management skills.

The Money Advice Service report (2013) found that money habits are set by the age of seven years. Therefore learning good money management skills early on in life is more likely to result in good habits when your child reaches adolescence and adulthood. Individuals with good money management skills know how to budget and make money last until the next pocket money instalment (or paycheck!).

2. Learning to save money.

Likewise, learning that you should save money in order to purchase what you want is a great skill to acquire. It means an individual may be less likely to buy on credit in adulthood.

3. A sense of purpose and achievement.

Yes, they may spend their money on cheap or frivolous items, which can be frustrating for a parent to watch. But trust your children, eventually, they will understand the feeling of achievement when they work hard and save hard to get that desired item. And when the hard work finally pays off, that sense of achievement will also help boost their sense of self-worth and confidence too.

4. Teaches the value of hard, persistent work.

Whether we like it or not, being rewarded in monetary terms is a key part of doing a good job and it is important that a child understands that things in life are and should be earned and not handed to us on a plate. Moreover, research has proven that in childhood rewarding the process and effort has a greater impact on future efforts and achievements than the actual result, so remember to reward the efforts your children put into tasks (which is mighty difficult when they’ve not realised they need to move things to dust!).

5. Teaches children about arithmetic.

And of course, it supports a child’s learning of basic arithmetic — adding, subtracting, multiplying and dividing can all be taught through the use of money. In fact, many children find this tangible way of learning arithmetic much easier to grasp.

How much should you give?

This is a tricky one to give a straightforward answer to and very much depends on the family circumstances and what you feel comfortable with. The average for a seven-year-old is £3.26 according to Go Henry’s latest research. Whereas the average for a fourteen-year-old is £12.15. However, when deciding what to give to your own children you should consider:

1. How much can you comfortably afford?

It is no good giving your child £20 per week, if that leaves you struggling in other areas. Conversely, a child may not see the value in getting £1 per week, if you buy them a pair of trainers or sweets whenever they like!

2. What are you giving it for?

Will they be needing to buy their own clothes and pay for their own clubs out of this pocket money? If so, they may need a little more. If they are only paying for a treat or two and to save for a more expensive item, then the pocket could be less.

3. What tasks (if any) will they have to do for the money earned?

My own children have a list of three tasks that they should complete each week in order to earn their pocket money which is £10 each. If they do not do their tasks, then I take off a token amount to demonstrate the importance of completing the full job — usually, I would get them to suggest how much to be taken off and they are usually much harsher than I would ever be!

How should you give it?

Cash. Cash is the more tangible and traditional way of giving your child pocket money. The real thing in your hand often feels like more of a big deal to children as they squirrel it away and look after it. It can also help with the arithmetic benefits of managing money. The downside of cash is that many of us do not carry cash any more, such is the way of the world, but for me, it still has its place in society (but that’s another blog post entirely).

Apps. In the last decade, apps have begun to pop up as a way to support parents to support their children in managing money. Think of Rooster and Go Henry. Generally, they provide a log of tasks that have to be done in order to earn money and parents can make easy transfers through digital banking and keep track of what is spent where and when. But these apps usually cost money through a monthly subscription charge and therefore you will have to factor this into the costs of pocket money.

Bank accounts. A bank account can be a good option for an older child who likes the responsibility and convenience of card payments (some banks allow this from as young as thirteen years old). You can now also add this to Apply Pay or Google Pay on smartphones which can have added face ID, making it more secure and less likely that someone else could use your card. However, as I have already stated, younger children may not be able to have access to a current account and may have to have an ISA-type account which may not have a debit card to make purchases (though it usually has a more favourable interest rate).

Top Tips

Finally, if you do go ahead with giving your child pocket money, then I have some final tips for you from my own experiences and in no particular order:

• If you are undecided on an amount, start lower, you can always increase it if you need, but decreasing it could be very demoralising for your child.

• Make sure you set some expectations as to what is required in order to ‘earn’ the pocket money

• Set expectations as to what your child might spend the money on and if any savings are required.

• As with everything that you do with parents, model good money management skills. Show your children how you are saving for things that you want and make a big deal out of it when you finally can afford to pay for it. I did this for a family holiday we took recently, it took me two years to be able to pay for the flight but finally, I was able to book!

I hope you have enjoyed reading my blog today. Check back again tomorrow and I’ll post another. For more latest updates and information, you can follow me on Facebook and Instagram. If you would like any writing, editing or proofreading services from me, get in touch to find out about the services and my rates.

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