There's a lot of debate these days about whether or not parents should be giving their children pocket money.
The act of giving your child money for simply existing is an act that is synonymous with spoiling or even mollycoddling your children. However, if done right, pocket money can actually be a highly rewarding and educational gift.
Pocket money can help your child to understand and appreciate money, learn the importance of saving and at a young age they’ll probably be making small financial decisions, such as deciding to spend or save their money. As a parent, it’s your role to ensure that pocket money is given to your children in a controlled way and done with rules in mind, so your children can get to grips with money management from a young age. You could also incorporate Junior ISAs, or current accounts etc, into your financial lessons.
4 reasons why you should be giving your kids pocket money...
1: A sense of independence
You may think that giving your child money for nothing is equivalent to you spoiling them and not teaching them the value of hard work. However, while your child is too young to get a job, giving them pocket money each week will still provide them with a sense of independence. They won’t have to rely on you to buy everything for them or ask for a particular toy until you give in and buy it. They can make their own choices, take control of their money and either save it or spend it how they wish.
2: It teaches them the importance of saving
As parents, we want our children to make good financial choices and not get saddled with any kind of debt. When you give your child pocket money each week, you’re already steps ahead. If there’s something they really want, then they’ll have to save. It’s as simple as that. Saving can take a long time, but when they get there they’ll appreciate it even more.
3: It teaches them restraint
As your child gets older and their pocket money increases, you may want to include certain things in their pocket money, like their clothing allowance or shoes. If your child has more money, they may be tempted to spend it all, however, if they know that this money has to last and also cover important things like a new top or a pair of trainers, then they'll have to show restraint and responsibility.
4: You can teach them about hard work
If you’re really keen on teaching your children the value of hard work and how you don’t get something for nothing, then pocket money can help. Instead of simply giving them their weekly allowance, give them the money in exchange for the completion of age-appropriate chores around the house. They'll still get their money and they'll learn about hard work too.
Remember
They will, of course, make mistakes and it's important not to berate them - remember it's far better for them to make mistakes now with smaller amounts rather than as an adult with life-changing amounts.
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