Many of us had pocket money or an allowance as kids in some form or another, but nowadays it is a bit of a lost practice. Despite this, there are many great reasons why you should consider giving your children pocket money, as it can set them up with some great life skills for that they can use in the future.
If you do start giving your son or daughter pocket money, you may also want to think out a junior investment ISA and encourage them to save away their new found cash for the future.
Here are some of the reasons you should start thinking about giving your children pocket money.
It teaches them that money is earnt, and not given
Most modern parents have a more laissez-faire attitude to spending in comparison to their parents when they were kids, meaning that their children don’t necessarily appreciate as much that money usually needs to be earned and won’t always just land in their lap.
If you are thinking about going down the route of pocket money, it’s wise to also incorporate some additional tasks and chores around the house, to help your kids learn the value of working for a reward. This can be tailored depending on the age of your children; younger ones can be tasked with packing their toys away or laying the table, whereas older children may be better suited to doing the washing up, mowing the lawn or that sort of thing.
They learn more about regular income
By issuing your child with their allowance either weekly, fortnightly or monthly, they can begin to understand the regularity of income, and how it is distributed regularly in smaller amounts rather than in single lump sums.
By doing it this way, they can also begin to learn about spending versus saving; do I spend my money now and get something small, or wait longer and get something bigger? This will also teach them more about self-control when it comes to money – yes, they will likely begin the exercise by spending each time they receive, but over time you can begin to give them examples of what they can get if they saved their pocket money over X amount of weeks. This will also help them to develop better decision-making skills when it comes to making purchases.
It is a relatively cheap exercise
The real value in this exercise is not to give your son or daughter a massive amount of money each week or month as that defeats the purpose. One or two pounds a week will more than suffice, as this will then mean that they need to make decisions on what they can afford, rather than just being able to buy everything that they want after just one week.
As a parent, £4-£8 per month is not a big outlay, especially if you consider reducing any treats that they are already receiving which they could now put their pocket money towards.