Pocket money is one of the first ways that kids learn about money; about the value of money, and the fact that they have to make decisions regarding their money. Do they spend it now on something small, or do they save up and get something bigger and better later? Do they blow all their pocket money on candy today, then watch with envious little eyes when their brother or sister rips open the box of that new toy they’ve been saving up for? Or do they strike up a deal with Dad and mow the lawn for a couple of extra bucks to stick in their own piggy bank (craft activity post)? There really are so many valuable lessons to be learnt!
But how much pocket money (or allowance) you give, when you give it, and whether you give it at all really depends on your family circumstances and personal choice. So, let’s take a look at the basics…
When do i start giving my kids a little pocket money?
If you have decided to give your kids pocket money, the general consensuses is that a good age to start is around 4 or 5 years old. Doing so starts introducing your child to the concept of basic money management and delayed gratification. This is specifically true if you take the time to explain to your child about saving money (an earlier post), and encourage them to be patient, and save up for something that they really want. Kids of this age might not be great at waiting months and months, but if you encourage them to save for something realistic, that they can attain within 3 or 4 weeks, and create a progress chart to complete with them, they will be able to grasp the concept relatively easily. When the time comes for them to purchase the much awaited ‘prize’, your little one is going to have a real sense of accomplishment, i will associate saving money with a pleasant and rewarding experience. This sets your child up with the right attitude to money for later on in life.
As your kids get a little older, be sure to sit down with them and agree on what you expect them to cover with their pocket money. Decide which toiletries and cosmetics are going to be covered by You Guys (the parents) and which are going to have to come out of the pocket money. Things like fancy perfumes and colognes, or anything more than basic make-up, could be covered by pocket-money, because it could be seen as a luxury and not a necessity.
Remember – As the ‘boss’, you are still in charge of what your kids spend their allowance on. If your little one wants to buy a whole bunch of candy, feel free to say ‘No way, Jose!’ And if your teen wants to spend their pocket money on a nose-stud and 4 pairs of ripped tights, well, good-luck! (Only joking 😉 but that’s another topic for another time)
How do you decide on an amount though?
The amount of money that you give your child really depends on your family situation and your personal choice. There are a million different formulas out there, if you google it you’ll see (a dollar for each year of their life, or roostermoney.com has a table if you’d like to check what they suggest, etc.) But really, the truth is, if you sit down with your child and have an honest discussion with them about what you expect them to use the money for, and tell them straight how much money they’re going to be getting, and then stick to that, your child will find the rhythm and make it work. Kids are amazing like that. Also, don’t worry about what others say or think. You need to find an amount that is right for you and your family. Do not go above your budget – putting pressure on other areas of your life just so that you can give your kid a fantastic allowance is only going to create big problems in the long run.
What should pocket money cover?
These are just a few ideas…
- special make-up or perfumes
- special toys or video games
- gifts for friends or family members
- outings to the movies or other special places like ice-skating
- part of their cell-phone bill (ie. phone calls to friends
- new skate shoes
- special sports equipment
Should there be any rules or conditions?
If you ask me, the answer is a very strong ‘Yes!’ I’d say, sit down with your child as soon as you decide to start giving them pocket money, and discuss all the rules. Is your child going to have to do any chores (another post) for their pocket money? What happens if they don’t do those chores? You could also start teaching your child about consequences now, by explaining to them that they may risk losing a percentage of their pocket money for certain behaviors. For example, you could make an agreement that if the toys aren’t tidied up before dinner time, they lose a little of their pocket money, and with teenagers, threatening to dock the cash always works wonders (hehehe 😉 )!
1. Don’t feel pressured – pocket money is a personal decision and is different for each family. It really doesn’t matter what your best friend gives their kids, or how much your parents thing you should give your kids. It also doesn’t matter how much your kids’ friends get. You give your children the amount that you decide, based on your calculations.
2. Be straight with your kids – tell them exactly how much pocket money they’re going to be getting, and then sticks to your guns! If your child understands that they have a specific amount and no more, it teaches them about living within their means.
3. Try and stick to a payment schedule – give your kids their pocket money once a week or once a month and thats it! This teaches your children the basics of money management. A good way to do this is by helping your children draw up a little budget (free printable from PBS.com).
4. Avoid giving advances – this just becomes a confusing cycle, and it’s better for everybody if the answer is just “sorry…”
5. Look for opportunities to teach your child about money – Children are very observant, and learn a lot about finances and dealing with money just from watching us, their parents. It’s up to us to point out opportunities to save, to explain to our children the basic concepts (when you spend your money, there is no more), and to educate them on financial ethics (if you borrow money, you have to pay it back when you say you will).
If you’re looking for a really cute, fun piggy bank for the kids, Amazon(affiliate link*) has a couple of amazing ones! These three are my favorites, if you want to take a look…
Digital Electronic Counting Piggy Bank What i love about this one is the fact that it counts the coins as you throw them in! I’m sure the kids would get a laugh out of that… just get them to count them first to practice their maths 😉
Cute Steal Coin White Cat Piggy Bank Money Box Gift for Kid.This is your typical cutesy “Cat hiding in the box and stealing the coin” piggy bank, but i know so many little girls that would love this one… and there’s also a Panda!
.Vintage 1950s / Early 60s Child’s Piggybank- Black Dog with Red Beret This vintage 60’s piggy bank has to be my favorite! Go check it out,and tell me what you think..
Well, there you go. With a bit of luck, the pocket money issue will be just a little bit easier to swallow now.
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*All that this means is that a small percentage of the sale comes to me, i ‘spose as Amazons way of saying ‘Thanks!’ for sending some business their way. I use those proceeds to help with the running of my household and towards the upkeep of this site, so please, go wild 😉 . (Only joking! Brightnbrainy supports responsible spending.)