How Much Pocket Money You Should Be Giving Your Kids
Helpful advice for parents on how much we should be giving our kids - and should we make them earn it?
10 April 2019
All Credits: PA
Most children receive pocket money, but lots of parents are muddling their way through it, unsure how much to give, and whether it should be earned.
Research by shopping price comparison site idealo reveals 81% of parents give up to £20/ AED 96 pocket money each week, with 3% handing out even more than that. However, last year’s Halifax Pocket Money report found the average weekly amount is now £7.01/ AED 33.
Ultimately, it seems there’s no right or wrong amount, and many parents will just give a similar rate to what their friends give their kids – depending on age, of course.
But should we make our kids ‘earn’ their pocket money, by doing chores in return for cash?
“As a parent, it’s common to feel confused about what’s right and wrong when it comes to managing money with children,” says child psychologist Erik Bohjort, head of research at Gimi – a free pocket money app.
"Parents might have taught their kids how to manage money through chores charts stuck on the fridge or piggy banks but with cash disappearing from everyday life, it’s important kids learn how to handle digital money from the get-go"https://t.co/QmpdB3VGLu@dad_info
“But it’s important parents recognise valuable lessons can be learned from not getting everything. That’s why pocket money is so effective. It’s a powerful tool that lets children practise earning, spending and saving for themselves – just like they will in their adult life.”
Here are five tips from Gimi to help parents perfect giving pocket money…
1. Start Early
Gimi says research shows the best time to start giving children pocket money is from around five or six years of age. This is the age children start to read, count, and begin exploring things they want to get better at. But you know your child best, so start when you feel they’re ready.
2. Keep It Frequent
A recurring weekly allowance is likely to suit children aged five to 11 best, says Gimi, as it allows them to get used to the process of receiving pocket money regularly. A child is usually ready for a monthly allowance from age 11. “This transition encourages them to manage their finances like an adult, and make their money last longer,” explains Bohjort.
The amount of pocket money you give should allow and require your child to pay for some things themselves. “It should be high enough for them to spend and save some, yet low enough for them to prioritise,” stresses Bohjort. “Gradually, they’ll start to learn the difference between ‘want’ and ‘need’, especially if they’ve got their eye on something.”
4. Add Incentives
Chores are a great way to teach children the merit of hard work. It’s good to set some mandatory jobs that children have to complete to receive their allowance, and some ‘stretch’ chores that allow them to earn additional money. Optional chores work well when a child has a savings goal, as they can see how earning money moves them closer to their goal.
A number of free apps are available to help parents and children keep track of pocket money. The apps, like Gimi, allow parents to set recurring allowances and chores, and helps turn children’s pocket money and savings experience into a game.