Pocket Money - When Should You Start To Pay Your Children?

As a parent of three, trust me when I say that 'no other topic will dominate parent/child financial matters more than the issue of pocket money'.

The issue of pocket money is and always will be an ongoing ritual that pits the negotiating skills of parent against child.

Rarely does a topic create such passionate discussion/s within the family.

A parent needs to decide when to start a pocket money payment plan, how much should the child be paid, how often does the pocket money get paid, are there any requirements and/or restrictions that must be met in order to receive pocket money (ie. chores/jobs to be done) and does an older child automatically receive more money just for being older.

Although the negotiations between parent and child/children usually take place around the dinner table and are usually civil, sometimes they can take on the atmosphere of a Company Boss versus Union Rep bandying about enterprise bargaining deals and union awards, where at the end of the 'negotiations' the parents are left with a nagging feeling of having just been 'conned' by their little darling/s.

With this said, pocket money is an important learning experience for every child as it is the first taste of managing a consistent income stream and it will help them develop the fundamentals of being able to handle a regular wage packet or salary as an adult.

If parents are just flippant and give the child/children more money when the agreed pocket money amount runs out then the child/children will forever think that the money supply is endless whereas a controlled supply will instill the value of money after all 'we are not made of money' and 'there ain't no money tree growing in our garden'.

I personally believe that the time to start paying a pocket money allowance is very much an individual decision as children's maturity and understanding varies greatly.

I have found with my own children that around the age of 5 - 6 (Year/Grade 1 in Junior Primary) is when I have delved deep into the depths of my purse to find the pocket money I have agreed to give my children.

They are excited about being in 'the big school' and this alone makes them feel somewhat 'grown up' especially if they have older siblings already at school.

If your school offers a 'school bank account' then that is another reason for getting them started as they can deposit their pocket money straight into their school bank account for safe-keeping.

Most parents stress about exactly how much money they should be giving their child/children as pocket money.

The actual amount does not really matter, what does is that you have started to give your child/children pocket money and they will get used to receiving it.

The child/children's age will determine the amount of pocket money that you will pay them. For example a five year old is given $1.00/week but to him/her who at five does not really understand the true value of money in a monetary sense sees themselves at having just won the lottery whereas a teenager would turn their nose up at the thought of only receiving a dollar and demand/negotiate for more!

Expect to hear wonderful stories about how this friend gets such and such from his parents and so and so gets this from hers.

You are at a natural disadvantage once the children try these negotiating tactics on you because you would have no idea what other parents are really paying out for pocket money.

Don't be made to feel obliged to hand-over what your child/children is demanding, after all you are the parent remember.

Obviously what pocket money you give to your child/children will be dependent on your own and/or family's financial situation so before you start negotiating with your darling/s set up your own family guidelines for pocket money payment such as:

$1.00/week for Pre-Schoolers,

$2.00/week for Junior Primary,

$5.00/week for Senior Primary,

$10/week for Junior High School,

$20/week for Senior High School or a monthly payment is always an option to consider especially if finances are stretched.

The amount paid out for pocket money is an individual decision but it also needs to be worked out on the amount of work or chores that the child does for the family as well as the age of the child.

Younger children naturally can only help so far and their perception of a few coins as being a large sum of money should also be considered. As they grow up and can take on more tasks there is room for an increase in the amount of pocket money that they will receive.

The amount of pocket money will also depend on what expenses it is meant to cover and by this I mean that you could give your 14 year old $50.00/month of which 50% ($25.00) must be deposited into a savings bank account whilst the rest can be spent on small personal expenses, entertainment, mobile/cell phone recharge, etc.

Although I believe that the amount decided on is important, equally as important if not more so is deciding on what basis the pocket money should be given.

A majority of parents will reward their children with pocket money for good behaviour or for performing well at school or at sporting activities. In my opinion if this is done long term this can lead to an exchange relationship where your child/children expect to be paid for everything that they have to do.

Paying pocket money with no strings attached is a dangerous precedent to set. As they get older, children will then have to learn for themselves the hard way that you do not get something for nothing or if you do it happens very rarely so why not get them used to working for a payment at an early age.

Likewise it is imperative that children realise that everyone in the family has jobs and responsibilities as part of a team unit that is unpaid for. An example of this is that if a child has the luxury of having their very own room then they should not expect to be getting paid pocket money to keep it neat and tidy, as it is their room and they are responsible for it.

Rather, pocket money should be given for extra jobs performed on a regular basis. If you have more than one child receiving pocket money, rotate the jobs and avoid gender typecasting when allocating the tasks that need to be done.

Preferably the jobs you would chose are those that they would not normally have to do, such as bringing in the washing off the clothesline, folding the washing into piles, mowing the lawn, watering the vegetable garden, dusting, cob-webbing, vacuuming, washing the car, etc as this way they are helping out their parent/s in running the household and they deserve to be paid a pocket money allowance.

Remember the reason that you agreed to start giving your child/children pocket money in the first place ... as a way and means to teach financial independence and the younger they start the more able they will be to cope with good and bad financial matters.

You're role as a parent is to instill good money management skills into your children for future financial success.

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UrsulaRose

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