Pocket Money - the Big Debate

I think my kids are too young for pocket money (3 and 20 months). They aren't getting any until they have a full grasp of the complexities of economic theory and relative valuation... JOKE!  Although I do think it's harder for children to learn about money when we use plastic cards and online purchasing for so much these days, I think they need to see me making judgements about the worth of stuff and denying myself treats from time to time, as well as seeing that it's OK to share nice things occasionally.

The three of us share a cake or a chocolate bar a couple of times a week if we're out in town. I frequently buy new books - maybe one a week. These tend to follow favourite themes, so we've had four dinosaur books in a row! I also consider that allowing clothes with characters on is a treat, so buying Bob pants instead of plain ones counts as a treat. They had so many presents for Christmas that I don't think they need anything else. We do like to do family days out to zoos or wildlife parks in spring and autumn when it's a long way from their birthdays and Christmas. It's worth remembering how many good things are free too!

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Our children don't yet get pocket money from us - they're almost three and five - although they both know what money is!  They get a monthly amount of pocket money from one of their grandparents but this goes straight into their bank accounts. They have more than enough toys and things so they don't need more at the moment.  As they grow older we'll let them keep this money and choose whether to save some or spend it, and they can save up for more expensive toys, if they wish.  As to when they should get pocket money - not sure. We might start at five but we might wait until six.  Once they get a little older we'll expect them to "earn" it with regular small chores.

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We have a chart for simple household chores like making their bed, putting shoes on the rack and dirty clothes away.  They can earn between 5p and 20p per task and we evolve them as they become a habit as they will do everything and cost you a fortune.  Even my youngest (three) participates and happily lays the table.  

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Our daughter receives £2 from her grandparents each week which she is allowed to spend on whatever she chooses, some weeks it might be a small book or toy other weeks it might be a magazine or some sweets.  If neither of these interest her then she is encouraged to save her pocket money in her own money box.   Every few months it is emptied by my daughter and taken to the building society to deposit into her account.  It is amazing how quickly it adds up....she has more money then we do now!

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We have just started giving pocket money to our two children, aged four and three. We started because our eldest kept asking for toy after toy. As his birthday is only five days before Christmas, we used to buy odd toys throughout the year but he was starting to demand them a bit too often. We decided to give him pocket money of £1 a week and let him save up for his toys. It will teach him valuable lessons about saving, waiting and choosing as, obviously, he won't be able to buy everything at once. He does seem to have grasped the concept and it is also a useful disciplinary tool as we threaten not to give pocket money if they behave badly (a threat we have carried out once or twice!).

The youngest probably doesn't understand it as well but we like to treat them equally so decided to give him his £1 a week too.

In addition to pocket money, they get occasional sweets. I am reluctant to allow them to use pocket money to buy sweets for themselves as I like to decide when they will have them, how many and what type. I really don't want them spending £1 on Haribo every week! I also buy books for them as and when they want them. We like to encourage reading as much as possible and feel that books should be a necessity, not a treat.

As they get older, they will be expected to do jobs around the house to earn their pocket money.

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Chloe has had pocket money since she was about three, and this covers magazines, sweets, etc that she wants to buy when out and about. This was mainly done as a way to stop her asking for something in EVERY shop and to try to get her understand that there was a finite amount of money and she had to choose between the glittery pink magazine with a fake phone on the front and a chocolate bar!  I still will get her extra stuff when I'm out but generally in the form of a fruit salad from the Surfin Cafe, rather than a chocolate bar.  My mother-in-law still has not grasped the point of it, and continues to buy her whatever she asks for, as soon as she asks for it - but I let this go as it is one of the roles a granny has to play.

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We started giving the girls an "allowance" this year as an aid to our household budgeting, which is very tight.  Everyone gets a weekly amount of cash from which they have to fund everything they want or need - from going to the football to a Tweenies comic, depending on how old you are.

The girls don't know that there is a set amount (and the youngest is too young to care anyway).  The five year old is now used to the idea of buying stuff from her own money though.  The next step is going to be to get her budgeting so she can start to understand that old chestnut "the value of money".  However, at five they have little concept of the relative scale of numbers even if they can count, so this will wait a while.

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I think that it is important for children to understand the value of money.  Once old enough, I think they should receive a nominal amount of money each week which they can spend on comics and toys with the proviso that, once spent, there won't be anymore until the following week. If the amount is not too much then a child might be encouraged to save so that they can purchase something more expensive should they desire. 

I am not sure what a suitable age is to start pocket money, maybe around five years old when they start school and can (hopefully) grasp the concept.  I also think it would be important to make sure that the pocket money is 'earned' to a certain extent and is certainly not given if there has been bad behaviour.

My son is only two and so far does not receive pocket money.  In an ideal world, I would be saving a small amount each week or month for him now but I am not. (I am not sure what I think about parents saving vast amounts of money for their children to waste away when they are 18!)  Many would say that he is quite spoilt as he quite often receives new toys or magazines.  I think it may be hard for me to implement my ideal pocket money scenario!

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When my eldest daughter was younger we would give her a set amount of money, say £1 a week, but also give her the opportunity to have more for magazines etc as a incentive to be good. As she has got older, we tend to give her money for helping out at home which works well for us as we have a house of five and there is always something to do! I personally wouldn't give money to my youngest children as they don't quite understand the concept of money at the moment but will probably start to give them spending money from the age of five. In the meantime, we save money regularly for all three of them for their future.

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We intend to give our children pocket money but when they are a bit older as, even at four years, our eldest doesn't yet have enough of a concept of money.  But we do give both children (4 and 2 yrs) loose change to put into their piggy banks, then every few months we count it up and put it in their building society accounts, we hope to encourage a future savings habit in this way.

When they do get pocket money in the future, we intend to link it to some small tasks around the house that are their responsibility, to try to show them that you don't get money for nothing, a fact we frequently point out to them just now as they think money gets given to you by the shops/hole-in-the-wall!  I would intend that they would have to buy all little items that they want with this money and to have to save up for specific bigger things that they want.  We think that instilling a responsible approach to money and savings is a very important life skill to pass on to our children.

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I have a just five year old little boy and an almost three year old little girl. I haven't as yet really thought about pocket money for the kids. I do, however, feel that it is important to teach your children the value of things in this day and age. I am sure everyone is guilty of buying their children things - just because you know they will love them. I know I was terrible when my first was little. I guess it was the excitement of having a long-wished-for baby. But all of a sudden, as your house begins to fill with toys after their first birthday and Christmas, you feel that there must be some sort of reining in and thankfully I manage (most of the time!) not to make rash purchases. In this day and age it is hard for children not to be spoilt. Let's face it, toys and clothes are cheaper than ever and it can be all too easy to succumb to a pleading child or screaming toddler whilst getting the groceries in Tescos. not to mention the "I just couldn't resist" from grandparents/aunties/friends etc.

Suffice to say, my husband and I decided to hatch a plan which, hopefully, will teach them some idea of monetary value in a money rich society and help us to sleep better at night! It boils down to bribery but hopefully in the least obvious way! It started with a 20p piece on the chest of drawers at bedtime with the promise that, if they stayed in bed until 6.30am or 7.00am, they would get to put their 20p in their money box. This idea continues and occasionally, for exceptional behaviour or for kindness or thoughtfulness, another 20p. Sometimes more (a hugely wonderful £2 coin for my son when he had a brilliant first school report) or 50p for helping to rake up the grass after it has been mown is given to them and they still get just as excited as they first did when their money chinks into their moneybox. About once every six weeks or so, we empty them and go on a trip to ELC or Toys r Us. This is fairly unenjoyable for the adults as we are met with a barrage of "but I really really really want this" etc etc. At this point we have to explain that, if they really really really do want that toy, then they need to save up for it. By the end of our usually hour long trip a small purchase is made (usually something cheap and plasticky). However, the kids are suitably chuffed with themselves as they feel like it is their money. Archie is realising that it might be worth saving his money to buy something better next time - he has managed this once - but so far, Ruby can't make it out of the shop without something clasped to her chest.

So I guess this is pocket money in its first form. We certainly plan to keep up along these lines as it works so well and hopefully will teach them that money needs to be earned to get them the things that they want and, as far as we can see, the younger you start the better.

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My son is only three but we fill his bank with our loose change, and every now and again, he asks if he can take some out.  He doesn't fully understand the concept of needing money to buy things yet, nor is he aware that it does NOT grow on trees, but he is making a bit of an association at an early age. I think sensibility with money is one of those things that not many parents teach these days.  "Back in my day" we had chores and we were given an allowance each week for doing those chores (setting the table, clearing the table, dishes, make own bed, etc).  I ask both my toddlers (3 and 1) to help me put the toys away so they understand the value of tidying/chores. Later, I will offer to pay them for it!!  Should come even easier then!  So, yes, I am in favour of pocket money, earned by the child and spent by the child how they wish.  They soon learn that when it's gone, it's gone.  With any luck that helps them to build financial responsibility.

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At three years old, my daughter is too young for pocket money. However we have opened a savings account in her name to deposit money received as birthday gifts and money we change up from all the loose coins we collect etc. I suppose when she is at school she'll probably have a piggy-bank and we'll give her a small amount of weekly pocket money for things such as comics, small toys, sweets and souvenirs - things that we would not necessarily buy her ourselves. Hopefully it will be fun for her to spend her own money, but also to learn that she can only buy something if she has enough cash !

We also opened a Child Trust Fund and intend to add to it each year, so that in the future she will have extra funds if she chooses to go to University, needs to buy a car etc. It does seem a bit scary to me that (assuming all goes well !) my daughter will at 18 years of age have access to a rather large lump sum of money - obviously we would hope that she does spend it wisely rather than just frittering it away, and it will be up to us to teach her the value of saving and managing/spending her own money responsibly.

I think it's important that children are not just given everything on a plate, and that for the older child it could be a good idea to give them opportunities to supplement their pocket money by giving them jobs to do like washing the car - this way they learn that in the adult world money has to be earned somehow, it doesn't just appear !!

These days with all the internet bank accounts available and payments for shopping more often than not being made by credit/debit card, rather than handing over cash, money seems to be becoming an abstract concept. I hope that by giving my daughter small amounts of pocket money, encouraging her to take spare cash to the building society to put in her savings account, and later down the line going to withdraw some cash in order to buy something special she will learn the benefits of saving up and that being able to afford to buy something means more than just having a plastic card.

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