What is pocket money?

Pocket money means just that money in your pocket that you can spend. It may be that parents and caregivers give money every now and again, or children may get a regular amount of money, for example every week or once a month.

Some families don't give pocket money regularly; they just hand over money to their kids when they want it. Sometimes people in the family may give money for birthdays or Christmas. Some of it may turn out to be pocket money - money that can be spend on what they want.

Whether to give pocket money

• The main reason for giving pocket money is to help children learn to manage money while they are still young and you can still guide them.
• Pocket money can help children feel that they are important members of the family because they are given part of the family’s spending money.
• It helps children to make choices and to see that sometimes people have to wait and save up to get what they really want.
• It can be a problem if there is not much money to spare in the family, but even a very small amount can give a child the feeling of some independence.
• In some families children are just given what they ask for and pocket money is not considered. If this works well for your family there is no need to give pocket money. However some parents feel their children haven’t really learnt about money and how to manage it with this method.
• The age at which you start giving pocket money depends on your child and you. However check what their friends’ parents are doing so they don’t feel too different.
• Some parents put part of children’s pocket money in a bank account for them. Check that the bank does not charge any fees on this amount if you do this. Some parents give pocket money and ask the child to bank a portion regularly.

How much pocket money?

There is no special formula and how much will depend on a number of things.

• What you can afford.
• What the pocket money is expected to cover.
• The ‘going rate’ among other families in similar circumstances to yours. If your child has a lot less than the going rate she may feel hard done by and be tempted to steal. If she has a lot more it can cause resentment and jealousy amongst her friends. However at some stage, children need to learn that all families are different in how much money they have and how they decide it will be spent.
• They can also learn that there will always be other people who have more money or more ‘things’ than them and many others who have less.
• It helps children to hear from parents that lots of money does not always mean lots of happiness.
• The amount of pocket money a child receives usually increases as the child gets older and takes more personal responsibility.

Its benefit:

Many parents and caregivers who can afford to, give kids pocket money so that they:

• use the money to buy things that they want
• get used to handling money and finding out what things cost
• are responsible for looking after money
• learn to save up for things that they want
• may learn to save part of their pocket money for when they are older
• have to manage on the amount of pocket money that they get
• earn what is good value for money
• learn to shop around for the best price

Pocket money and punishment

• Stopping pocket money often seems an easy answer if your child has done something wrong.
• Sometimes this is okay. For example, if he has carelessly broken something it may be important for him to help pay for the replacement by contributing part of his pocket money each week if this seems fair.
• However taking away all of your child’s pocket money, especially over a period of time, can cause a lot of resentment towards you and difficulty with friends.
• Sometimes children in this situation steal from their parents or friends because of this resentment.

To Remember:

• Pocket money can be a valuable way of teaching your child responsibility.
• Get an idea about the ‘going rate’ from friends’ parents and work out whether this would work in your family.
• Make sure that you are consistent and reliable about ‘pay days’.
• Work out with your child what the pocket money will cover. Include an amount for him to do whatever he chooses.
• Allow your child to make some mistakes.
• Encourage your child to save part of his pocket money each week.
• Give approval or maybe a bonus for successful managing