Why Give Pocket Money?
1 of the most important reasons people 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 begin providing 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 kids where money really comes from, Ie: (by working for it, not just magically pulling it out from an ATM) and the value of money before handing over pocket money.
How much pocket money?
This will depend on a number of things:
* what you can manage to pay for
* 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 problem if there is not much cash to spare in the family, but even a little sum can provide a child the feeling of independence and that they are valuable members of the family because they are given part of the households money.
Furthermore, it assists children to make choices and to appreciate that at times people have to wait to get what they really would like.
Should pocket money be earned?
This is an issue that polarizes many parents. Some say yes, other people say no. For instance, some parents think that kids pocket money should be earned by doing chores about the house, whilst others think that helping around the household is just part of the duty of contributing to the household and not as payment for jobs. You may choose to give out a certain basic amount of pocket money and allow your child make a little more 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 agreement whereby a certain percentage is for saving, some for school lunches and some for the child to spend on anything she wants like chocolate or toys. Be careful not to criticise their choices if you are not happy with them.
Some parents might 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 gets rewarded and bad behaviour gets punished. Conversely taking away all of a kid's pocket money, especially over a long period of time, can cause a lot of bitterness towards you. Sometimes it could lead to children in this situation stealing from their parents or friends.
Pocket money and teenagers
Teenagers who have learnt money skills from a young age will have an advantage while they are moving towards independence. Depending on your teenager's maturity you may want to give a expenses allowance to cover their entertainment 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 may come to an agreement about helping out. Make it clear that next time they have to take the consequences.
Older teens can often earn some additional pocket money from part-time work outside the home. How they utilize this money varies from family to family. Commonly, this money belongs to the teenager but in some families they may be required to contribute something toward the family or their own expenses.
Whether or not to provide pocket money to children is a individual choice but it can be a very valuable means of teaching kids how to manage their finances.
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