Today’s report from the University of Sheffield was greeted with a big cheer here at Roosterbank central. In case you haven’t heard the news, a structured pocket money routine really does play a part in helping young people to develop healthy finance habits later in life.
Giving pocket money for jobs and tasks will make children think carefully about how they spend it.
The study pointed out that linking pocket money to chores supports children in becoming prudent adults, which is reassuring for all the parents on Roosterbank who use a reward chart and boost for little household jobs.
Parents who gave big sums of pocket money without making their children earn it will be sad to hear that their youngsters won’t grow up to become avid savers – unlike our Roosterbank customers, 80% of whom we have found prefer to set their earnings aside instead of spending.
Another finding which alarmed us is that the higher the value of each pocket money award, the more likely children are to spend it instead of saving! A lot of the parents we’re in touch with would agree that random pocket money payments do tend to be higher in value, but less valued by the children who receive them.
Pocket money managed in the right way gives children a head start in life.
The even bigger issue for us is what unmanaged giving teaches children about the control they can have over money. Whether parents give it weekly or boosts for jobs and rewards, by adopting a regular pocket money routine where saving is encouraged, parents are sending a really clear message to their children that money is something they can manage, not something that will manage them. Not only that, but we have found that a natural result of a proper pocket money routine is that the family will discuss finance more and that’s the best starting point for early money management education.