Pocket money - what to do?

Everyone has their own opinion on this one: Should you pay kids if they help around the house, or should pocket money be separate from chores? Or, should some chores be expected to be done for free, but additional, more demanding tasks be paid?

The debate extends to how much pocket money to give as well.

While you’ll inevitably find your own method that works best for your family, at The Hoard Book we recommend establishing clear guidelines for pocket money. If you’re opting to give them a set amount each week, it’s crucial to define what this pocket money should cover. Are they expected to save some of it? Is it meant to cover leisure activities, small personal expenses, or contributions to school events? Clarifying these expectations can prevent misunderstandings about spending and saving.

Moreover, what should they do if it’s not enough? Teaching children to manage their finances is an essential life skill. Discussing scenarios where their pocket money might fall short and exploring solutions, such as saving over time or earning extra through additional tasks, encourages financial planning.

Regularly reviewing the amount of pocket money and its purpose is also important. As children grow, their needs and understanding of money will change. Periodic discussions about pocket money can help adjust allowances based on their maturity level and needs, ensuring that it remains a useful tool for teaching financial responsibility.

If pocket money is linked to chores, it’s essential to specify which tasks are paid and which are expected as contributions to the family. What jobs warrant pocket money, and how often should they be done? Also, consider what happens if chores are not completed on time. Establishing consequences for missed or poorly done chores reinforces the value of work and the importance of fulfilling commitments.

Additionally, if other relatives regularly give your kids money, it's wise to coordinate with them on the expectations for this money. Will there be disappointment if your child spends all their gift money on something like sweets ? Is there an expectation for doing something in exchange for this money? Aligning on these rules can prevent conflicting messages about money management.

Talking about money with your kids regularly makes the concept less intimidating for them and more natural for you to address. The more openly and frequently discussions about pocket money and financial responsibility occur, the more confident your children will become at managing their own finances as they grow into adulthood. This not only prepares them for the real world but also gives them a sense of confidence and capability in handling their economic affairs.