While pocket money can be an effective tool for teaching financial responsibility, regularly lending money to kids can have negative consequences. In this blog we’ll dive into why that might be the case:

1. Dependency:

When children rely on borrowing money from their parents after spending all their pocket money. This means they will fail to develop a sense of independence and resourcefulness. Instead of learning to manage their own finances, they become used to constantly asking for money.

2. Lack of Accountability:

Regularly lending money can lead to a lack of accountability. Children may not feel the need to budget or prioritise their spending if they know they can always borrow more when they need it.

3. Unrealistic Financial Habits:

In the real world, resources are not endless, and individuals must learn to live within their means. By constantly lending money to your kids, parents risk promoting unrealistic financial habits that could have negative consequences in adulthood.

This is not to say that giving pocket money is a negative thing. Bex promotes pocket money as this allows kids to learn budget and is a valuable tool for fostering financial responsibility and independence. Through pocket money, children learn essential skills such as budgeting, saving, and goal setting, setting them up for a successful financial future.

However, it's important to distinguish the difference between pocket money and regular lending. While pocket money encourages responsibility and accountability, constantly lending money whenever your child asks can create dependency and promote unhealthy financial habits.