Pocket money: the pocket prescription

A pocket money box can encourage kids to save to waste their cash. Photo by Pink Sherbet

Parenting throws up numerous challenges but few are as thorny as who gets what when. I am referring, of course, to pocket money. Possibly because they tend to have so little of it, no one is more cash-conscious than a child.

Younger siblings will complain that they don’t get enough compared with their older brother or sister. The older ones, in turn, will say the scale of the differential fails to reflect the very different calls upon their income.

If you think Tube union boss Bob Crow is a bit of a handful when it comes to negotiation, try aggrieved children who reckon they know their rights.

This particular misery for parents tends to begin when a child is six or seven. According to a report published two years ago by the Children’s Mutual, one of the organisations that administers the now defunct trust funds, the average weekly pocket money given to a six-year-old was £1.48. By the age of ten, this had reached £2.70 and by 15 – the last age surveyed – £5.66.

Whether you can get away with doling out such amounts really depends on where you live and who you’re mixing with, because the pocket money issue is a social as well as a political minefield.

Adults learn early in their working life not to tell colleagues how much they get paid. But children tend to have no such scruples, particularly those who have a shrewd idea that their own parents are more generous in this department than those of their friends.

And so anyone who thinks they can get away with giving a nine-year-old a pound a week may soon find themselves at the wrong end of a scornful protest from someone who could make a Central Line shop steward look positively moderate.

Do:

Get them to earn it to some degree, perhaps by performing some household task (making their bed and tidying their room might be top of the list but they can also be a useful form of child labour when it comes to emptying and filling the dishwasher, clearing the table, etc).

Matched funding: this means encouraging the work ethic by paying a certain amount extra for every extra pound they earn from something such as a paper round. Or agree to match whatever they save towards their holiday spending or big-ticket purchase (e.g. a gaming console or a bike).

Open a savings account. This helps to foster early the concept of saving.

Think about paying out monthly rather than weekly. This helps them develop a talent for budgeting

Give them a money box. Apart from helping them keep track of where their nest egg is, it may encourage them to save.

Don’ts

Don’t compete with your children’s friends’ parents. Each family has its own financial limits.

Don’t give them too much. Pocket money should be for small, fun outlays not capital expenditure: paying into an iTunes account from the Apple store is fine, an Apple Mac from the Apple store is not.

Don’t  succumb to pressure to give loans on the basis of future payments. That’s what saving is for.

Don’t  be critical when your child spends their money on frivolous/unhealthy items. That’s what pocket money is designed to cover. The parents can be fascists on their own budgets.