Research indicates that children who manage pocket money tend to be more financially responsible as adults. Still, parents grapple with several questions: What's the appropriate amount? When should children start receiving pocket money? When should it end?
The initiation and conclusion of pocket money are discretionary, but a general guideline is for children to begin once they grasp the concept of money, typically around seven or eight years of age, concluding around age 16, when they can start earning independently.
The amount of pocket money to give can be perplexing. Our calculator below synthesizes data from surveys in the UK and Ireland, suggesting that kids between 8-15 years old typically receive about €8.75 weekly. This figure increases with age but serves as a baseline. Utilize our calculator for tailored recommendations according to different ages.
Why is pocket money crucial? Despite the scarcity of personal finance education in most schools, these vital skills can and should be nurtured at home. Pocket money not only cultivates financial responsibility and the art of budgeting but also encourages children to make judicious spending decisions. It becomes a practical lesson in saving, particularly for more expensive items.
Introducing children to banking can further augment financial literacy. Numerous banks offer junior accounts for children under 12 and teenager-focused accounts, or you can open a standard account in a child’s name.
The debate on whether pocket money should be guaranteed or based on performance is nuanced. A stable allowance can facilitate financial planning and budgeting, whereas conditional pocket money could potentially undermine the learning of these skills. Alternatively, some parents employ screen time as a reward system, which can resonate more significantly with children than money.
Encouraging kids to sell unwanted items online is another technique to teach money management skills, along with instilling a sense of environmental responsibility. This can be an effective method to de-clutter while educating about fiscal responsibility.
As gaming tops the list of expenditures for children, transitioning to digital pocket money is becoming increasingly relevant. Instead of physical currency, which is commonly used for inconsequential purchases, consider gifting gaming or shopping gift cards to provide a sense of financial autonomy to your children online.
Related Products:
- Gaming Gift Cards
- Shopping Gift Cards
- Entertainment Gift Cards
