We have found that a good place to start teaching children about money is through pocket money. By giving children pocket money you can teach them about saving and spending. By letting them have control of their own money they will soon realise that some things cost a lot more than others and they can’t always get what they want straight away. They may need to save up first and it may mean, if they want the Xbox game then can’t also have the new basketball boots.
*The average amount of pocket money paid by parents and grandparents in the UK is almost £13 per week, with the most amount of people paying between £5 and £9.99. Meaning that on average, UK children are earning just over £50 in pocket money each month.
By giving them their own pocket money, you are putting a limit on the amount they can spend on things for themselves and they will eventually learn how to manage and plan their own spending.
This could also mean fewer tantrums as you don’t have to say ‘no’ when they ask for ‘the toy that they have always wanted’, because you can advise them to save up for it with their pocket money! By doing that, you are teaching them that if they want something, they will have to save up first and not spend the money on other things in the meantime. This helps them to reinforce their decisions and make sacrifices to get the things that they want, which is a really useful skill for them to have for later in life. You might also find they don’t want that “must have” item quite as much when they have to pay for it with their own money!
There are lots of things you can teach them about spending and saving, and the most important thing is that you can’t always have everything you want, as some things cost more than others. You can also teach them that you may have to save up to get the thing you want, whilst sacrificing other things so you can get it quicker.
Gone are the days of just giving children pocket money for them to put in their piggy bank where they would then go down to spend it at the sweet shop. Children now want to be able to buy a pair of trainers or a bag from an online shop. Digital pocket money apps are really useful for this and over the last few years there has been a rise in the number of phone apps that can be used to pay pocket money.
This article from the Financial Times, “https://www.ft.com/content/ddc7140a-0bec-11e8-8eb7-42f857ea9f09” explains how children as young as 4 can benefit from digital pocket money app’s. It goes on to say “Unlike a conventional bank account, these app-based services appeal to parents who are keen to educate their children about the value of money, but want to retain a margin of control over what their children do with their cash. For example, they might want to monitor their child’s purchases, or restrict what they can spend on in-app purchases or digital downloads. It is also possible to set tasks — such as completing chores — for your child to complete to earn their pocket money”
Having used one of these apps with our son we found it a great way for him to have the freedom of having a debit card to be able to pay for small purchases, but we could also set him tasks to earn his own money. Although he did challenge us on the £2.50 to wash and clean inside his Dad’s car… But that in itself goes to show that he’s learning about what is a fair rate of pay for doing a job.
Berry & Oak do not recommend any particular pocket money app. This article is for information only and should not be taken as advice.