Having spoken to lots of parents over the last few years while building Roosterbank, we have been able to collect plenty of wisdom on why making the decision to give pocket money is a good thing, and how it can help your children in the future. So here are our top tips!
Just before we do that, when we talk about ‘pocket money’, we mean any money that children receive whether that’s from a reward chart, earning it from jobs or chores, awards for work at school or indeed a regular amount.
Pocket money helps give your children a critical life skill.
Being able to manage your own money with confidence is a life skill we believe every child, young person or adult should have.
By getting your children into a pocket money routine (however you give it) will let them start thinking positively about what they do with it and help prepare them for the day when they get their own bank account. We have designed Roosterbank specifically with this in mind – giving children the tools to learn about money, statements and the importance of saving carefully and spending responsibly.
It will help your child learn the value of things.
Putting your child in the driving seat will force them to think about the cost of the things they want. This will also encourage them to think about the value of the presents they might receive and perhaps how they look after their existing possessions!
It will teach them that money doesn’t grow on trees (or in your wallet for that matter).
Yes, its an old adage but it’s true. By giving pocket money in a managed way and attaching conditions to this – whether its completing tasks at home, helping gran out with her garden or getting good grades, they will come to understand that you need to earn your money – making the reward of getting it even sweeter than a hand-out!
Children learn the opportunity cost of their decisions and the concept of budgeting.
By putting children in charge of their pocket money, they will be forced to make decisions about what they do with it. This requires a budgeting lesson. On Roosterbank we do this by getting children to decide whether they are going to put it towards something in the shop, save it for the future or make a donation. We reward them the more they save and visualise the effect of that decision on their other targets.
Importantly, by putting the onus on your child, you can have constructive conversations with them about whether their decision is the best one. If your child really really wants to get the latest toy magazine in the newsagent they need to decide whether firstly they think it is worth the £3.50 and then understand that if they get it, whatever else they are saving for will suffer.
Pocket money routines keeps things fair and reduces pester power.
Do you find yourself giving your children things because you have forgotten what you promised them or because of pester power? Getting into a routine means that you can keep track of what you have given them, keeping it fair for them and less stressful for you! If you both know how much pocket money they have, you can put the onus on them to decide what they get with it and learn that when it’s gone it’s gone!