Pocket Money: How much should I give?’

QUESTION: How much pocket money should you give children? I have three children – an eight-year-old girl and two boys, six and five. The subject never really came up until recently and my daughter is now pressurising us to give her money like all her friends. Some of her friends seem to get lots of money from their parents which I don’t agree with. To be honest, I have always been unsure about giving a child pocket money in case they think they deserve it and it makes them more demanding.

Of course, I give my daughter money if she needs to buy something and I buy her anything else she needs, but I’m reluctant to give her a regular weekly money. One of my friends only gives her children money in return for doing chores around the house. Do you think this is a good idea? I want to get this right with my daughter as her two younger brothers are watching carefully.

Essentially, deciding to give children pocket money is about deciding to give them some responsibility for managing their lives and for making their own decisions. If you give a child pocket money, you are giving them some freedom to decide how to spend it and thereby to learn to take responsibility for money.

Pocket money can have a number of benefits for children such as teaching them about the cost of items, helping them learn how to budget and save, and also can be used as a reward for good behaviour and effort.

There is a lot to be learnt in terms of self-discipline, by a child making choices about what is important and what they want to buy or by a child learning to save their pocket money in order to buy something important in the future.

Of course, many parents have legitimate concerns about giving children pocket money such as fearing it will spoil them and/or they will spend it on sweets or other unhealthy items. In addition, many parents simply can’t afford to give their children extra money.

Giving Your Child Responsibility 
To address these concerns, it is important to realise giving pocket money does not have to be an additional cost. When I am discussing with parents the subject of pocket money, I suggest they sum up the cost of all the non-essential treats they might give their children in a week such as sweets, biscuits, magazines, toys, etc. Even in families where finances are tight, this usually amounts to a reasonable amount of money.

Giving pocket money can be about no longer buying these treats for children, but instead giving them the responsibility to buy them themselves. For example, instead of buying children a treat on a Friday, you might let them use their pocket money to buy this. Even small amounts of money can work – giving young children 10 or 20 cent to buy two jellies in the shop once a week teaches them some responsibility.

Setting Limits
In addition, giving children pocket money does not mean that your child has to overindulge on treats and sweets. You can easily set specific limits on what they can and can’t buy with their money. For example, you can agree that they can spend only a limited amount on treats at the weekend and that they must save the remainder to buy something “educational” in the future such as a books, music, art or games.

Dependant on Good Behaviour
In terms of whether to make pocket money conditional on good behaviour or on completing household chores, I think this is a good idea. Such an approach helps children learn that they have to work for things, and that privileges such as pocket money are dependent on good behaviour and pulling your weight in the home.

In the Parents Plus Programmes, we recommend using pocket money as a reward for good behaviour and to use the loss of some pocket money as an important consequence for misbehaviour. Certainly, this is preferable to other negative forms of discipline such as coercion or anger.

The key to making it work is to remove only small amounts, for example, they might lose five cent for minor misbehaviour and larger amounts if they don’t complete an agreed chore or break an important rule. In addition, it is helpful to never completely remove a child’s pocket money, which means they always have something to work for.

Step-by-Step Handover
At what age to give children pocket money is an open question and depends a lot on the children’s level of maturity and what independence they have already. In the long term, children will need to budget as adults and the question is when and how you start to hand over these responsibilities to them. Often it is best to do this gradually, so you can monitor how your child responds to their new responsibilities step by step.

Value of Money
Before giving a child pocket money, they need to be able to appreciate the value of money and what they can use it for. With young children, you might first give them small amounts to buy a specific item they want, while with older children you might give them an allowance each week (depending on chores and good behaviour).

The amount you give them should be based upon on what specifically they might need the money for and on what you can afford. It can be a very small amount and still teach them many life lessons.

Discuss it with your Children
However, in the end, it is your decision as a parent about whether and when to give your children pocket money. Giving or not giving pocket money is all about what values around money you want to impart to your children and what you want them to learn from you.

Whatever your decision, it is important to sit down and explain your reasons to them, so you can use this discussion as an opportunity to talk through these issues with them.

John Sharry, Irish Times Newspaper, May 2012. John writes  in the Irish Times Health Plus every Tuesday.