The benefits of pocket money for you and your child.
by Joanna Fortune, Monthly Blog-Osity Contributor and Clinical Child Psychotherapist
Parents often ask me about pocket money and how they can use it as a positive parenting tool. Here are some tips on that.
There are many child development benefits to giving your child Pocket Money, including;
• It encourages independence
• It helps develop budgeting skills and an appreciation of the value of money
• By affording them the opportunity to decide on things they like and want, they
are developing a capacity for desire
• It can help them develop saving skills
The amount you give is absolutely up to you and should be influenced by your family's financial situation but also your child's age and stage of development. You can decide if pocket money should be earned by doing household tasks for you but I would add here that part of being in a family is the expectation that everyone helps out so I would suggest that there are set chores/tasks that your child is responsible for that they are not paid for, but you may offer them the opportunity to take on additional chores to earn money. If you do this then be consistent with it and if the chore/task is not done properly, they do not get paid for it.
In terms of what age your child should be to start this system, I would say that is your parental decision, but you could start it from as young an age as 5 years, but just ensure that the amount you are giving and the chores/tasks you expect to be done by your child are appropriate and reflective of their age and stage of development e.g. a 5 year old child can be responsible for feeding the goldfish every day and putting their dirty clothes into the laundry hamper but perhaps not loading your dishwasher.
What do you expect their pocket money to cover? Are they to buy their own phone credit or personal items (teenagers) or do you cover these and their pocket money is for extra or treat items. The amount you give should reflect this and you should be clear with your child from the outset, perhaps have a pocket money agreement you both sign up to. Do not be swayed by what you are told their friends get. You are responsible for parenting your child alone and you won't know what arrangement other parents have with their children regarding the pocket money they give so you must develop your own system and stick to it.
If you want pocket money to be an effective developmental tool then stick to your own budget as much as you want them to learn to stick to theirs. What I mean is regardless of age, when it is gone, it is gone and you do not top it up during the week. This way your child learns moderation and how to make their money stretch to the whole week. If there is a busy week coming up in a month (perhaps someone's birthday or an outing with friends) when you know they will need more money, encourage them to save a percentage of their weekly money so that they have extra for a more expensive week.
Having your child, regardless of age or amount of money, put 10% of their pocket money into a savings account is a good habit for them to develop for later on in life as well.
Note: You may also be interested to read more about this topic in a post that our Education Development Manager Rebecca wrote some time ago on the idea of 'Spend, Save, Share'. You can see Rebecca's post here.