Pocket money has been around for quite some time and is something that can be really important for teaching children about money. Whilst not all parents embrace this with the same level of enthusiasm, once your child reaches a certain age, pocket money can empower them providing a real sense of independence. Not only that, it can also help them to learn some important financial realities such as how to spend money sensibly and that you sometimes need to save up if you want something special.
In this day and age there can be such an overwhelming amount to fit into one day that it’s no surprise that people are reluctant to add any more to their already overextended lists. However if you can give pocket money once a week or even once a month (for the more mature children) then it can be really effective and in the long term should make your life easier.
First of all think about how much you spend on your child each week, not the essential items such as food, clothes and such like but the more frivolous things such as ice creams, a cheap top in the local shop, magazines or energy drinks and sweets. Work out what you think is the right amount to give to you son or daughter then hand it over. Make sure that the child knows your expectations and that once the money is gone it’s gone (don’t be tempted to top up mid way as that will only set a precedent), of course younger children will need a degree of supervision but you may be impressed by how well your child can manage.
One thing that can be really helpful is to set some goals. Ask your child to identify some items they would like and help them work towards them, some of these could be smaller things such as colouring pencils, a new book or a trip to the cinema, whilst larger items such as Xbox games or gadgets need some saving commitment. Help them stay on track and keep focused reminding them to ask ‘do I really want this’ before they make a purchase.
Earn and Learn. Once children are given responsibility for money it doesn’t take long before they realise they would like more of it! There’s nothing wrong with a bit of enterprising spirit and rewarding children with small amounts of cash for agreed tasks or targets will help them become more independent and see them taking more responsibility, (let’s face it, when you’ve had to work for it you’re a lot less likely to spend it frivolously!)
Finally start young! Even if you don’t think your little one is old enough to be given pocket money you can start talking to them about money, helping them to appreciate its value. Research has shown that children learn most of their money habits from parents and these can be developed from as early as 7 so lead by example as much as possible and don’t be afraid to talk through your buying choices. Grab the opportunity to talk about money when you’re out and about, challenge the kids to find the best offers around the supermarket or when doing an online shop.
Vanessa Cameron is a mum to three boys and the founder of Qwiddle, a free online piggy bank for children powered by PayPal. Also known for her blog MissPocketMoney.co.uk Vanessa is committed to educating young people about money.
As a special offer for LivedwithLove readers, Vanessa is offering a £5 balance to each child registered by the end of September 2015. Visit www.qwiddle.co.uk to sign in using the promotional code LWL08 or for further information please email firstname.lastname@example.org
*Guest post by Vanessa Cameron