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Should you give pocket money to children?

Should You Give Pocket Money to Children?

Should you give pocket money to children?

This is a question that many parents ask themselves when they are deciding how to create an allowance for their kids.

When it comes down to it, pocket money is usually given as a reward for doing chores around the house or completing other tasks and is completely subjective. Should you give pocket money to children?

It works for some parents and for others, it doesn't.

It's also used as a way of teaching your child responsibility and giving them some control over what they purchase with pocket money.

When should you start giving your children pocket money?

There isn't a set age that pocket money should begin, as it doesn't have to be related to your child's age.

However, there are some factors you may want to consider when deciding if and how much pocket money your children will receive:

What is the value of pocket change in your area?

How does this compare with similar areas?

Can they handle managing their own expenses with pocket money or do you need to step in every time an issue occurs (e.g., buying lollies at school)?

Once you answer these questions you will be able to come up with a pocket money amount for your children.

How do you give them an allowance?

There are a number of ways you can give pocket money to your children. 

Each allowance method has its own benefits and drawbacks, so it's important that you find the one which works best for both you and your kids.

One allowance method is giving out cash on a weekly basis in an envelope or jar with their name written on it, this way they have accountability over how much money they spend each week without having to rely solely on memory.

Another option is creating savings accounts for your children where all income goes into these accounts until certain milestones are met (i.e., saving up for their birthday present).

This teaches them to save rather than spend everything as soon as possible while also helping them learn about long-term goals and financial responsibility.

What are the pros and cons of giving children an allowance?

The pros:

- allowance teaches responsibility

- allowance gives children control over their money, which can be empowering for them

- allowance can teach children about budgeting and delayed gratification

The cons:

- allowance may not teach about saving and planning long-term goals if there are no incentives to do so.

- allowance teaches that money is the most important thing in life, which isn't always true (i.e., spending everything they get even if it's not a necessity)

- allowance may be too much for younger kids who won't have any expenses or responsibilities

The benefits of teaching kids about finances early on in life

There are many benefits to teaching children about finances early on in life.

By teaching your kids the value of money, you can help them make better financial decisions when they're older and prevent bad habits from forming that may be hard to break later down the track.

Teaching your children about how much things cost also teaches them empathy for those who earn less than they do or have less access to essentials like food and clothing.

How much should you give them, and how often?

This is a hard question to answer because it is so subjective.

However, pocket money can range anywhere from £0-£30 a week for children under the age of 12.

Teens between 13-17 may receive pocket money upwards of £40 per week or more depending on their lifestyle and how much they need to live off each month.

When deciding on an amount you should do some research into what your child needs to get by in life (e.g., school fees, transport costs if they're old enough). 

Then take this number and compare it with similar areas where you live - as pocket change is relative!

Lastly, add a bit extra so that your kids are able to buy small treats throughout the year without having to ask for extra money or feel like they have been deprived.

Ways to teach your child how to spend their money wisely

- Talk to your child about your purchases -  This is a great way to teach your child about money as it will help them learn how much things cost and what you value in life.

- Make pocket money conditional - If you give pocket money unconditionally, children might feel like they are entitled to spend the whole lot on lollies at school without realising that this isn't sustainable or good for their health!

- Teach them delayed gratification - pocket money can be used as an incentive for older kids who may not have many responsibilities (i.e., buying new clothes after saving up). This teaches your kids to save rather than spending everything straight away.

- Consider creating savings accounts with conditions attached - As mentioned earlier, there are benefits to both pocket money allowances so if you think pocket money is the way to go, why not use pocket money as an incentive for older kids?

- Give children a budget -  If pocket money is all they receive, creating a monthly budget will help them understand what's important to you and how much things cost in life.

- Take them bargain shopping -  Shopping for bargains is a great way to teach your kids how much things cost and also teaches them about value.

- Give pocket money as an allowance - pocket money can be given weekly, monthly, or yearly depending on the age of your child in order to help them learn financial responsibility.

What to do if they spend it all in one place or don't save any of it

If your kids spend all of their pocket money in one place or don't save any of it, you can do the following:

- Create a budget for them to follow - teach them about what they need and how much things cost. You can also create this budget together so that they know where every penny is going.

- Set some goals with pocket money as an incentive - This will create long-term memories rather than just spending everything straight away on buying lollies!

Make the goal achievable - (e.g., £20 pocket money per week) and let them earn rewards along the way such as treats at school or more pocket money if they achieve certain milestones such as saving up half of their pocket money before using it.

- Make pocket money conditional - If you give pocket money unconditionally, children might feel like they are entitled to spend the whole lot on lollies at school without realising that this isn't sustainable or good for their health!

- Give pocket money as an allowance - pocket money can be given weekly, monthly, or yearly depending on the age of your child in order to help them learn financial responsibility.

If none of these methods work and your kids still insist on spending all their pocket money straight away, then it may not be time yet for them to have a cell phone with internet access or any other expensive items that they will only end up charging (e.g., games). 

Having said this, if you think it's important then they learn about pocket money and financial responsibility, then do what you feel is best for your family.

Wrapping Up

There are many ways to teach children about finances, but giving them an allowance may be the best way. 

It teaches kids how to budget their money and make spending decisions that will help them in the future. If you want your child to learn good financial habits, give them a weekly allowance of £5 or more!

One thing is for sure, you should be giving your children at least one type of allowance. It's up to you whether it’s a weekly envelope or jar system or simply handing over the cash each time they need something.

This will help children make better financial decisions when it comes time for college tuition, car insurance, etcetera.

The pros of giving your kid their own spending money outweigh the cons so don't hesitate!

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