Pocket money! How do you help your child learn about money? Here are some top tips on how to manage the pocket-money in your family:
1. Get into a pocket-money routine
Giving pocket-money here and there can end up being both time-consuming and exhausting (as well as causing lots of arguments!). Getting into a pocket-money routine means that you can track exactly who gets what and it keeps it fair for everyone involved – reducing pester power and arguments in the shops. A regular routine also shows children that you can exercise control over money which gives them the confidence to do the same later in life. You don’t have to spend a lot to start a routine and using a notebook, wall chart or online tool l can help make managing that routine really simple.
2. Let children help around the house
If there are things that you pay someone else to do at the moment, think about getting the children to do it in return for pocket-money. If you need your windows cleaned then maybe your children can tackle the ground floor? Many families use household chores as a great way to get children involved and learn about rewards, encouraging them to understand the link between work and money, and giving them a sense of achievement that comes from earning their pennies.
Make sure you are clear what is a job versus something you expect them to do as part of the family and when you agree a rate, be firm about the amount and stick to it.
3. Be creative
Jobs around the house aren’t the only thing children can be rewarded for. The supermarket is a great place to get your kids thinking about the value of money. Hunting for reduced price items can be a great way to save cash and making it a challenge will be fun for your children (and a distraction from simply picking up sweets!). You can give them an incentive with a pocket-money reward from the savings you’ve made. Alternatively, consider paying your children for coming up with energy-saving ideas that drive down your monthly bills.
4. Give pocket-money in a way that suits your family.
There is no right way to award pocket-money – that comes down to what suits your family best. Some parents prefer to give a regular weekly amount which they expect their children to cover specific things – like trips to the cinema or top-ups on their mobile. Other parents prefer to use star charts and convert stars into pocket-money once enough have been awarded. However you do it, be clear with your children about how you are structuring pocket-money and how much they can expect to receive and when.
If you do decide to give regular pocket-money, always trust your judgement about how much you can afford. Working out what your children are expected to cover with it and sticking to this can also help you save money too – you shouldn’t spoil them, rather the opposite.
5. Let children choose how to spend their money
Let your children take responsibility for how they spend their pocket-money within boundaries set by you. This encourages them to think about their money carefully and will lead to positive family discussions about their money. Importantly, you will urge you children to appreciate the opportunity cost of their decisions. In other words, understanding that if they buy that comic now, it will be at the cost of whatever else they might be saving for and when their money has gone, it’s gone!