We all know that giving your child pocket money is a great way to teach them about the concept and value of money and that hard work earns rewards, but when is the right time to start giving them pocket money?
One of the first things to consider is your child’s age. Experts believe that the right age is normally around five or six when your child can really start to grasp the concept of money- what it stands for and how to use it. It’s also important to look at your family values as a whole and decide when you want to start introducing your child to these key concepts. For instance, “what you put in is what you get out,” or “Hard work pays off”.
Pocket money or not?
The reason for giving children pocket money is to help educate them about how to manage money from a young age. Giving your kids pocket money instills a sense of responsibility, as it’s their choice to make decisions about what they will spend their money on. Trusting them with their ‘own’ money also helps them to understand that sometimes it takes time to save up for something you really want. This often results in a more mature approach towards saving and spending.
A good idea is to give your child pocket money and encourage him to save a certain percentage, whether it’s in a bank account, a piggy bank or under the bed. If you do decide to open a bank account for your child, ensure you choose a bank which doesn’t charge high monthly admin fees.
When should I start giving pocket money?
This really depends on your child’s personality and temperament. Most experts say that a child should only start receiving an amount after the age of five or six. Children younger than that won’t understand the concept of pocket money and how it works. You may want to introduce your younger kids to money matters by giving them small change to spend; or buying them a pretend cash register with coins and a basket of pretend groceries. In this way they’ll experience firsthand how money works.
Visitng a store with your child and letting them pay for something will teach them the concept of bartering and that once they’ve spent the money, it’s gone and can’t be replaced. If your child prefers to save money, it might be a good idea to let him put the change in a glass jar, so that he can see how his money ‘grows’. This also encourages saving money from a young age and patience as your little one will have to earn enough money to buy that special toy or trip to the zoo.
How much money should I give?
There are no rules here and you shouldn’t be too concerned about what your child’s peers are getting. The amount of money you choose to give depends on what you can afford and what you expect your child to do with his pocket money. Obviously an older child has different needs to a younger one – take time to discuss what your little one ‘needs’ rather than ‘wants’. Advertising has a strong influence on children – that’s why it’s important to explain the concepts of ‘want’ and ‘need’ to your child as soon as possible.
It’s also important to discuss what you expect your child to do with his pocket money. Will it only be for treats or should it, for example, include buying birthday presents and paying for outings? Experts believe that it’s best to give your child between R10 and R15 for every year of his age. For example, if your child is seven years old, R70 to R105 per month should be enough for his savings and personal spending.
It’s also good to teach your child from a young age, that all families are different and that the amount your child gets can’t be compared to his friends’ allowances, but rather what works in your family. The amount given should be age-appropriate and should be increased as your child gets older and has more personal responsibilities.
Should your child earn his pocket money?
According to the book All About Children, Questions Parents Ask by Tony Humphreys, it’s not advisable that children are paid to do chores. “They live in the house, are provided with many comforts, eat the food, are clothed and share in many other benefits. If they are the equals they claim to be, they are obliged to share the toil. When children are tangibly rewarded for chores, they assume that they need not do anything unless there is something in it for them. No opportunities to develop a sense of responsibility are provided under these circumstances. The emphasis has been placed on ‘what’s in it for me?’ Children need to be part of the whole scene of family life; responsibilities need to increase with age and they also have to share in the family’s spending money, which needs to increase as the child gets older.
“It is not wise to have any connection at all between chores and allowances. children are requested to do chores because they contribute to the family welfare. They are given allowances because they share the benefits, and they need to be allowed to spend their allowances in any way they like. In the same way that it is not advisable for parents to reward children for doing chores, neither is it wise to reward children for their cooperation.” At the same time though, should your child want to save up for something he wants to buy, there is nothing wrong with giving give him extra money for additional chores he takes on in the household.
• Once you have decided to give your child pocket money, you should remember that this is an ongoing process. Whether it’s a weekly or monthly amount, you should make sure that you stay consistent and reliable about the specific ‘payday’ to avoid confrontation.
• Allow your child to make mistakes with his pocket money – if he spends all his money at once, he should know that he has to wait until the next ‘payday’ before any more money is given to him.
• It’s not a good idea to let your child borrow money from you, as this will not teach him healthy money habits. However, should you decide to lend him money, make sure that he repays you.
• Often, taking away pocket money may seem like a good way to punish your child if he has done something wrong, but be careful of doing this. In some cases it’s okay, for example if he carelessly broke something, he could pay it off or part of it. Nevertheless, stopping pocket money over a period of time may result in resentment and may cause your child to be tempted to steal money from you or his friends.
• You should clarify with yourself and your child whether pocket money is unconditional and guaranteed or if it’s dependent on good behaviour.
• It’s never a good idea to link pocket money to performance. It is said that if financial inducements could make us smarter we would all be professors! Ultimately, pocket money helps teach children about making choices, how to deal responsibly with money and how to be patient when saving for things that they want.
A BBC report states that 29% of boys and 20% of girls spend their pocket money in the week they receive it. The study also suggested that over 30% of pocket money is spent on sweets and chocolates.
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