Why Give Pocket Money?
One of the most important reasons families give pocket money is to help a child develop a useful sense of how to deal with money, spending and saving. It is important that children learn these skills while they are still young and you can guide them.
At what age should you start giving pocket Money?
The age at which you begin giving pocket money varies from family to family and from child to child. Lots of parents educate their children where money really comes from, Ie: (by working for it, not just magically pulling it out from an ATM) and the importance of money ahead of handing over pocket money.
How much pocket money?
This will depend on a number of things:
* what you can afford
* what the pocket money is expected to cover
* the 'going rate' among other families in similar circumstances to yours.
If your child has a lot less than the going rate, she may feel hard done by and lack confidence with her peer group. If she has a lot more pocket money, it can bring about resentment amongst friends.
Providing pocket money to your child can be a challenge if there is not much cash to spare in the household, but even a small sum can give a child the feeling of independence and that they are important members of the household because they are given part of the households money.
Additionally, it can help kids to make choices and to realize that sometimes people have to wait to get what they really like.
Should pocket money be earned?
This is an issue that polarizes many parents. Some say yes, other folks say no. For instance, some parents believe that childrens pocket money should be earned by doing chores about the house, whilst others believe that helping around the household is just part of the duty of contributing to the family and not as payment for jobs. You might decide to give out a specific basic amount of pocket money and let your child make a little extra for some special chores, such as washing the car.
What should pocket money cover?
This depends on what you work out with your child. Lots of parents set up an arrangement whereby a certain portion is for saving, some for school lunches and some for the child to spend on anything she wants like candy or toys. Be careful not to criticise their selections if you are not happy with them.
Some parents may decide that if the child is doing well with saving for something special that they will give a hand. For instance, every time the child makes a saving milestone, they might add an extra bonus as a reward and encouragement to remain on track.
Pocket money and punishment
Holding over pocket money for naughty behaviour can be OK in the short term. It may teach them that good behaviour will get rewarded and bad behaviour gets punished. Conversely taking away all of a kid's pocket money, particularly over a long period of time, can trigger a lot of bitterness towards you. Sometimes it could lead to children in this situation stealing from their parents or friends.
Pocket money and teens
Teens who have learnt money skills from a young age will have an advantage whilst they are moving towards independence. Depending on your teenager's maturity you might choose to give a spending allowance to cover their leisure costs and perhaps to buy clothes.
If they make a rash decision and blow their allowance on something they then regret buying, it may well teach them about prudent spending. If this happens, you might come to an agreement about helping out. Make it clear that next time they must endure the consequences.
Older teenagers can often make some additional pocket money from part-time work outside the home. How they use this money varies from family to family. Usually, this money belongs to the teenager but in some families they might be required to contribute something toward the household or their own expenses.
Whether or not to provide pocket money to kids is a personal choice however it can be a very effective way of teaching kids how to manage their money.
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