Pocket Money Politics

This is another guest post from the folks at MoneySuperMarket

The issue of money is one that affects all of us. It is the language of want and the description of value. As such, it is complex and requires years of training to be able to use it effectively.

Whether you buy in to the above statement or not, the point is that money, be that a weekly wage or a 30-year mortgage, affects our lives on very many levels. We learn our mother tongue, manners and responsibility from a young age so why not learn about money.

Pocket money is one means of teaching children about money, how it works and how it affects us. Not giving pocket money is also a lesson in values, self control and, in some cases, the reality that “spending money” is sometimes just not available.

This article is not about forcing parents to pay up even more. You should not need to take on extra credit, such as loans with moneysupermarket, to give your child pocket money.

As giving pocket money is the most common way of dealing with this issue, we will give a little advice on how this should be approached.

Firstly, have a chat with some other parents, ideally people that share your values and find out what their attitude is and how they have approached the subject.

This is a good start as your children will interact with their children and it is a good idea to find out what is accepted and what the “rules” are. Fitting in with the group is important and having similar means, if possible, may reinforce their social position.

Likewise, if you are not able or willing to pay this amount, the child needs to know why. Realizing that some circumstances are beyond their control is equally a good lesson.

The age at which pocket money starts depends again on the parents and how they feel about the issue. However, a small amount, even at age 4 or 5, can help begin the process of money management.

Make the process regular and visual. It is important that the child receives the money on the same day of the week or month. This teaches money management and planning at its most basic level and that the supply of money is not endless.

The visual aspect refers to the savings. Use glass or clear plastic jars so that the accumulation of savings can be seen as well as the decrease from spending.

It is a good idea to separate long-term savings for a “big toy” from everyday spending on say, sweets. This may help with understanding delayed gratification and the cost of instant satisfaction.

Pocket money rules and amounts will change as the child grows up. As they get older, they may need to pay for school lunches and bus fare. Here, a distinction can be made between want to have and need to have.

There are two sides to the argument about working for pocket money. One says that doing work around the house makes you part of a family, like being part of a society and that you should not necessarily get paid for contributing.

The other says that working for pocket money can teach the value of work and reward. A possible compromise is doing some extra work, like painting the garden fence, for some extra cash.

Money is a tool and a life skill. The sooner people begin to understand its implications, strengths and weaknesses, the sooner they will be able to cope with its pressures.