Ins & Outs of Pocket Money

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There is a never-ending debate about giving children pocket money. Some parents and experts believe that pocket money can be the secret ingredient to teaching kids money management. While others think it only fosters the habit of unnecessary spending.
We get how challenging parenting can be. Now imagine adding these controversies to it. The result will blow your top!
That’s why the YounGo Money team decided to put an end to the pocket money subject and assist young parents using a complete guide to children’s pocket money, its pros and cons, and the appropriate ways of giving it.

Which Pocket money outlook is right?!

Before giving you a solid answer, let’s take a closer look at the two POVs causing this dispute.

  • The first group considers pocket money a must for children to learn how to manage money. They believe that if the given amount covers their essential expenses, such as lunch money, school equipment, or fun activities, they’ll learn the value and how to budget and save. 
  • However, the second group believes that children should only get money when needed. That way, you’ll prevent misspending. 

We have a little surprise! In this matter, there is no right or wrong. However, there are #4 different methods of giving kids pocket money. You can choose one of them based on your financial situation and parenting methods. As a result, taking the final decision is up to you. But don’t worry, we don’t leave you be!
Before walking you through methods of giving pocket money, you better take a look at some vital tips.

pocket money tips

Pocket Money Tips for Parents

  • Sit them down and talk about money, its value, and the way it works.
  • Set some certain rules about spending money and make your children follow them.
  • Help them save their money and set clear goals for them.
  • Monitor their spending.

Methods of Giving Pocket Money

Wait for their request “on-demand”

Some parents only give their children money when they need it. Whenever they want to buy something or go to the movies with their friends, they have to ask for it. Those parents believe if they buy their children what they demand, pocket money will be an unnecessary concept. Doing so gives parents more control as their kids need to ask for their permission anytime they need something.

Allowance

In this method, children receive a fixed amount per week, month, or year. Some parents also use allowance as a punishment. If a kid doesn’t behave, parents can reduce or cut their allowance. 

Pay it Per Task

This is like giving your children a salary. Ask them to do household chores or a certain task and pay them accordingly. Here you can find the ins and outs of “Children Chores.”

pocket money per task

Write a Negotiation Letter

In my opinion, this method can be the most up-and-coming one. Set a negotiation with your children. Let them come to you with a proposal of how much they need and what tasks they are willing to do in order to gain money. Then together, you can write down the job they should do and the amount you will pay for each until you reach their desired amount. In this method, not only do they learn negotiation skills, but they also learn how to spot demands.  

There are some questions you can ask yourself to choose the best method to give your children pocket money.
For instance: Should my child be paid for chores? Should they be paid based on the “result” or their “effort?”

Should parents give their children the money or make them earn it?

Again, it’s your call! If you give them money without asking them for any tasks, they may learn a few money skills like managing, budgeting and saving. On the other hand, rewarding them after they finish an assigned chore makes them see the result of working hard.
However, we recommend combining these two approaches. Give the kids a small amount of money, and if they manage to help around the house and do household chores, award them with some extra pounds.

What Are the Pros of Pocket Money?

  • Teaching kids the value of money 
  • Helping them in saving up for what they desire or need
  • Boosting the sense of responsibility 

What Are the Cons of Pocket Money?

  • Misspending
  • There might be arguments about not receiving the same amount among siblings

How much should you give your children?

The amount of pocket money you give your children is based on your salary and your personal decision.
However, the average amount per week in the UK is £7.62. The standard amount for 18-year-olds is £14.79 and for 7-year-olds is £3.52.

To Sum Up 

There is no right or wrong when it comes to giving our children pocket money. The family’s income, parenting strategies, etc. determines the method and the amount of pocket money.

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