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Use pocket-money to develop independence

15 June
Posted by:
Michael Grose

“How should I give my children pocket-money?” is one of the most common questions asked at parenting seminars.

“Should kids receive pocket-money when they complete jobs and should they lose pocket-money if they are poorly behaved?” are also common queries.

Giving pocket-money is an excellent way to develop independence in children and young people.

Children should receive pocket-money as their small share of the family wealth just as they should share the workload at home. For this reason I prefer not to link pocket-money to chores or behaviour. This is not to say that the family income is divided equally between all members. Rather, children are given a realistic sum of money, given their age, needs and ability to deal with money.

Here are five ideas to help you use pocket-money to develop independence and also a sense of generosity in your children:

1. Give pocket money regularly: Like adults children should have a pay day each week or fortnight when they receive their share of the family wealth. My children received their pocket money at the conclusion of our family meetings. This was not so much a reward but a way of helping me remember to pay them. (I do suspect though it may have been a factor in the success of our family meetings!!)

2. Use the three jars concept: Provide three jars for children when you give them pocket-money – one for spending, one for saving/investing and one for charity. Ask children to distribute their pocket-money among the jars. Giving children coins rather than notes makes this activity easier. This is a fascinating activity which gives you the chance to teach kids a great deal about money and its use.

For instance, you can get across the idea of saving before spending – i.e. setting aside an amount of money for saving/investing rather than saving what they have left over at the end of the week. You can also introduce them to the notion of tithing or setting aside some of your income for charitable purposes. You may want to have a rule or procedure that states once money is allocated to a jar it is not retrieved later!

3.Link pocket-money to age and stage of development and their needs (not wants): Provide guidelines about spending including letting them know just what they are expected to buy. A child in pre school and lower primary school may get enough to purchase some sweets and one or two other items, whereas a child in upper primary school may get enough to cover lunch orders, bus money and some treats. An allowance that covers clothing can be useful for adolescents who can be very costly to outfit in the latest fashions.

4. You can pay me back later: If you get sick of your children asking you for treats or even the latest fad or gadget suggest that they can make a purchase or at least make a contribution from their personal wealth. If you are pestered at the supermarket to but an ice cream or some such treat you can say, “Certainly you can have an ice cream out of your own money. If you haven’t any money with you I’ll buy it and you can pay me back when we get home.”

5. Teach children about goal-setting: By encouraging children to save for a big ticket item (or even make a contribution) such as a bike or skateboard children learn a great deal about planning and looking ahead, the value of budgeting and experience personal satisfaction of reaching a goal.

When used wisely, pocket-money is an excellent way to develop independence in children and young people. And by the way, it may be smart to cut or reduce pocket-money when they turn fifteen and encourage them to get a part-time job so they begin to pay their own way.

Find out more practical ideas about raising independent kids in my book Thriving!.
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  • allowance
  • allowances
  • independence
  • pocket-money
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