Lesson earned for youngsters

CHILDREN given pocket money are less likely to save than those who work part-time, says the British Household Survey.

The study says one in four children spend their money immediately.

Is it better for children to earn pocket money or be given it regardless?

“Parents wonder should they be incentivising chores. Should children not just do something for the sake of it?” says Joanna Fortune, clinical psychotherapist and director of Solamh Parent-Child Relationship Clinic.

She says pocket money can be a developmental tool, even for young children. There are benefits. Pocket money encourages independence, and develops budgeting skills and appreciation for the value of money. It also develops saving skills, and enables you to be part of the discussion with your children about how they spend their money.

“Parents need to be very clear as to why they’re giving pocket money and how they’re going to manage it. They must decide if pocket money is to be earned. But I would caution that part of the expectation of being in a family is that everybody helps out and contributes. It’s not real family life if you get paid for every little thing you do — there should be set chores, for which your child is responsible and for which they don’t get paid,” says Fortune.

The task and the amount of money (within parents’ budget) should be age- and development-appropriate. “It’s the job of children to test boundaries and it’s a parent’s job to hold those boundaries. If the task isn’t done properly or on time, the child doesn’t get the pocket money — you need to be consistent about that.

“You also need to be clear about what you expect pocket money to cover, especially with older children. Does it cover mobile credit or personal items, or are you going to cover those and pocket money is for extra treats?” says Fortune.

When pocket money is spent, don’t top it up. “This teaches moderation. It’s also a good idea for children to develop the habit of saving 10% of pocket money. What you want for children is a sense that pocket money is something earned and appreciated rather than an entitlement.”