Should you give pocket money at all? Pocket money can help teach children from a young age about the value of money and how to look after it. A survey by CommBank found that almost 80 per cent of parents in Australia give their children pocket money. The survey also showed that the most popular way to give children pocket money is in return for doing certain tasks. This can help children understand that money needs to be earned. Popular tasks include:. These situations can be a win-win, as children can better appreciate the value of money while you get some help and also incentivise good behaviours.
Once a chore is completed, you can pay pocket money straight into their account and encourage them to check their balance in the CommBank Youth app. Research has suggested that money habits are set by the age of seven. At a meeting of head teachers and authorities on Wednesday, some will call for better financial education in primary schools. Whatever children are taught at school, a few pennies at home - starting in cash - can go a long way, according to Sarah Porretta, of the government-backed but independent Money and Pensions Service.
For those parents who no longer carry cash - just using payment cards and smartphones - the mother-of-two says: "The trick is to go and get some coins, just so your children have the opportunity to interact with them. If you are paying with a card or with a phone talk to children about that and link it back to those coins they have handled.
A growing band of pocket money smartphone apps suggest a different answer. Pocket money is changing. We pay for things with the touch of a button," says Will Carmichael, father-of-two and chief executive of one of those apps - RoosterMoney. That is no longer the case.
You may use it for [video game] Fortnite online. You might use it to pay for a pair of trainers from an online shop. The app starts for four year-olds with an online reward chart, it moves on to a pocket money tracker which allows youngsters to set savings goals. Dr Chicot says: "If your child has saved up their allowance, it is their pocket money. It sends a confusing message if you take arbitrary amounts away from them at any time. Dr Chicot says: "Although it is possible to encourage a child to work hard and save, do not be surprised to find that your children are all different.
You can have an ongoing conversation about money and pocket money with your children, from young children to teenagers. Results from pocket money surveys vary widely. A CommBank survey of Australian parents in showed the following average weekly pocket money pay-outs:. However, the amount of pocket money you give your children each week should be based on three key factors:. It's a good idea to give your children their pocket money at the same time each week, eg every Saturday morning, so that they get accustomed to planning, receiving and budgeting around a regular date - much like adults in the professional world.
Once they hit pre-teen, you could give them their pocket-monthly bi-weekly, and monthly when they hit their teens - thereby challenging them to plan and make it last longer.
From the age of 12, children can have access to their own bank accounts and their own debit cards. In doing so, there is a risk that kids will use their cards excessively and wipe out their savings quicker than anticipated Managing bank accounts and electronic money is an important part of adult life and it's important that our teens become financially literate before they can get their hands on things like loans and credit cards!
Younger children should be paid in cash. In Lower Primary, while they are still learning basic maths, it is a good idea to give them their pocket money in coins and lower denominations to help them practice addition and subtraction.
Be clear with your children about what you pay for in the house eg food, utilities, phone, transport and what you expect their pocket money to cover eg lollies, comics, short and long term savings, charity.
Don't bail them out or give them extra money if they run out. Financial literacy starts at a very early age and children will never become proficient at managing their money if they don't learn from their mistakes. You will also need to lay down some ground rules about what restrictions you have on their spending; just because they have money, doesn't mean you will allow them age-inappropriate computer games, pet snakes or bubble gum if you have a six year old who tramples it into the carpet.
What are your views on pocket money? Let us know in your comments below Enrol Contact Compass. King's Blog.
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