Pocket money, also known as an allowance, is a small amount of money given regularly to children by their parents. This money is often used to help children learn about money management and financial responsibility. So when should you start giving kids pocket money? And How much pocket money should you give?
What is Pocket Money?
Pocket money is a small amount of money given to children by their parents, usually on a weekly or monthly basis. The purpose of pocket money is to teach children the value of money and how to manage it. By giving children a set amount of money each week, they learn how to budget and save for things they want. Pocket money can be added to by giving kids chores to earn more money as they get older.
How much pocket money should you give your child?
The amount of pocket money you give your child depends on a number of factors, such as your own financial situation, your child's age, and your child's level of responsibility. As a general rule, experts recommend that children should receive an amount of pocket money that is appropriate to their age and their needs. The average weekly pocket money in the UK across ages 6-18 is £7.54, It varies a lot depending on age and is completely individual to your family.
Here are some tips to consider when deciding how much pocket money to give your child :
6-9 year olds: On average weekly amount of £3.52, with 6 year olds averaging around £3 and 9 year olds averaging about £4. At this age it is about giving them a little financial freedom and teaching them to handle their own money in small amounts
10-13 years old: The weekly average is £7.39, with most 10 year olds receiving about £5 and 13 year olds getting around £8-£10. As kids enter into secondary school and start having more freedom you may want to consider increasing their pocket money.
14- 17 years old: The weekly average is £13.76, 14 year olds are getting about £9-£12 and 17 year olds are getting around £13-£14. At this age kids are becoming increasingly independent, increasing their pocket money allows them to begin to budget spending with their friends and even saving for more expensive purchases. Kids may want to get a part time job or do more chores to earn extra cash around this age.
As kids reach 18 the averages drop to around £11, likely due to as kids reach young adulthood and begin working for their own money, parents aren’t paying them as much pocket money if any.
It's important to note that these are just general guidelines, and the amount of pocket money you give your child may vary depending on your own financial situation and your child's individual needs. It's also important to set clear expectations and guidelines for how the money is to be used, such as saving a portion of it or using it for specific expenses.
Setting pocket money goes hand in hand with financial education. When setting pocket money make it clear to your child what it is? If you are rewarding your child for completing chores or tasks, set out how much they can expect to make from each task. Are you setting a regular payment, make it clear when you will pay this, how much and any expectations around this. This helps to set children up for going into work and earning their money later on, but also establishes the idea that money is limited.
Consider introducing the idea of budgeting, when you pay your child you can sit down with them and create a budget using their money. If they’re saving for a new toy or something else they want you can sit with them and create a savings goal and plan for how much they need to save from their pocket money to achieve this.
Pocket money is a great way to teach children about money management and financial responsibility. By giving children a set amount of money each week, they can learn how to budget, save, and spend responsibly. By setting clear expectations and guidelines, you can help your child develop good money habits that will serve them well throughout their lives.
