Pocket money - or cash on demand?

publication date: Aug 23, 2008
author/source: Anne Coates

I don’t think it’s ever too early too learn about the value of money! My own daughter had a weekly amount from about the age of ten but by the time she was 13 we opened a young persons bank account and she received a monthly allowance that made her feel very grown up and she could plan what she wanted to spend and when.

You are not being old-fashioned in wanting to give a weekly sum instead of just handing out money. Children need to learn how to budget – and how to save up for something they really want to buy. We do our children no favours by just paying for everything and letting them assume that’s how life is. In just a few years time your daughter could be away at university and will need to know how to plan a weekly/termly budget for food, books, entertainment and travel. So starting young with pocket money makes good sense.

The first thing your husband and you should discuss is how much pocket money is a reasonable amount and that will depend to some extent on your own financial situation. On the other hand you don’t want her to have much more or less than her friends so it might be worth asking other parents how much they give their offspring.

You could also add up the money you give her over a week and see if the total seems an appropriate amount?

You also need to decide what pocket money is to be spent on:  outings with her friends like trips to the cinema?  magazines etc? At this stage she won’t be buying her own clothes but very soon she may want to buy the odd item and then it would be good if she learned to save up for special treats.

If your husband still thinks he should be handing out money whenever your daughter asks for something, perhaps her could be persuaded to go with the pocket money idea and to put some money away in a savings account for her? A lump sum for a special occasion, like a school trip, would be very welcome.