Most of us need to earn money to live – save for a big Lotto win! Money certainly doesn’t grow on trees, nor is there an endless supply of notes in a machine in the wall at the bank. It’s a hard lesson for kids to learn.
Some kids get money whenever they ask for it. Some kids don’t get any money at all. Some kids will receive pocket money to teach them about earning and managing money from a young age. It can teach them about being rewarded for work. They can also learn about budgeting, spending and saving. If you want to give pocket money to your kids, there are a few things you may want to consider before you begin.
Take your kids to your work so they can see where you go and what you do to earn money to pay for things like food, clothes and petrol.
How old should kids be before they get pocket money?
There are no rigid rules. It’s really up to you to decide when they are ready for it.
How much pocket money should kids get?
There’s no secret mathematic equation that’ll give you the answer. It will depend on how much you can afford to give them, and how much you think is a fair amount for what the money is to be used for.
Sometimes, kids get a set amount of pocket money each week. Sometimes the amount of money will vary. You could choose to link the amount of money to your kid’s age. For example, if you have a 7-year-old, they could get seven dollars a week. Most of the time, the amount of pocket money that a child gets would increase as they get older.
How much are Kiwi kids receiving?
Wondering what the usual amount of pocket money is for kids in New Zealand? A report by CensusAtSchool in 2017 reported that in their survey of students aged 9 to 18, 59% of kids confirmed that they had received pocket money, a gift or an allowance. The median received was $15. A quarter of the students got between $1 and $6. Another quarter received $30 or more.
“Six in 10 schoolchildren taking part in the national CensusAtSchool TataurangaKiTeKura reported that they received pocket money, an allowance or a cash gift the week before participating, getting a median of $15.” Source: CensusAtSchool
Should kids have to earn their pocket money?
Ah, the great debate! You can give kids pocket money without expecting them to do anything in return or you can give kids at set amount of pocket money in return for doing household chores.
Make sure the chores suit the age of your kids – like making beds, picking up toys and putting dirty clothes in the laundry. Kids will have to do other chores to earn a little extra pocket money. This can help them learn about the value of money and that it takes time to earn it.
Other parents believe doing chores is part and parcel of being a family and choose to give their kids pocket money for other reasons like getting good marks at school, on their birthdays, or as a special treat.
How is the pocket money to be used?
Pocket money can be used for lots of different things. It really depends on the age of your kids, how much pocket money they get and what costs it’s expected to cover. For younger kids, some of the money might be used to buy lunch at school once a week. Older kids, for example, could be expected to contribute some of their pocket money towards buying clothes, shoes, or mobile credit. It’s important to give kids control over (at least) some of their pocket money. It’s how they’ll learn about spending money and saving money.
A lot of parents prefer their children to put a percentage of their pocket money into savings, say half into a savings account and half for their own spending.
This article was written for Kidspot – New Zealand’s leading parenting website. Sources include The Australian Securities and Investments Commission, and Understanding Money.
Read more on Kidspot: