Pocket money’s changed a lot since many of us were kids – where we got handed a few coins to spend on a sweets, young people now have cash transferred into their accounts for in-app purchases.
The amount has changed too, with the average child now netting £10.73, not including birthday money or contributions from other relatives.
This week’s Money Problem reader, Rebecca, gives her daughter almost double that, along with extra cash whenever she wants it — and fears her lack of limits has ‘created a monster’ who doesn’t understand the value of money.
Keen to set some boundaries before it’s too late, the 42-year-old from Harrogate asked Metro consumer champion, Sarah Davidson, for help.
The problem…
Last week my 11-year old daughter had a total meltdown because she wanted me to buy her the latest iPhone. Apparently ‘all’ her friends have new smart phones and ‘it’s not fair’ that she can’t have this one in particular.
I’m sure this is an argument all parents have with their kids. Unfortunately, I think I have to take the blame for this screaming, raging child throwing all of her toys out of the pram.
It’s not actually about the phone – it’s about the cost. When she was seven, her dad and I decided to start giving her pocket money so that she could begin to learn about how spending and saving felt and worked. We started by giving her £2 a week and it’s gone up every birthday.
The problem is, she is definitely not a saver. She will save for a bit but only so she can then splurge. Over the years, we’ve got a bit lax about how we manage the money she gets – she’s now on £20 a week and we’re always topping her up when she asks.
My husband and I had a frank chat about it – I think we’ve created a monster and rather than her learning about money in a helpful way, she just sees it as an endless tap. We need to rescue this situation before she gets older – I can just see her getting into credit card debt at this rate. Help?
Should parents give their children more pocket money or teach them to earn it?
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Give them a weekly allowance
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Make them earn their pocket money through chores
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Balance both by giving a base amount and opportunities to earn more
The answer…
Ah. Well, let me first say well done for recognising this is a problem that needs to be nipped in the bud. The actual nipping may be more of a challenge.
From her point of view, she’s always been given the money she wants and now, without explanation, she’s faced with the reality that money does not grow on trees and there are limits. I’m actually not surprised she’s in full on tantrum mode.
Though you don’t say, I think it’s safe to assume you’ve explained to her why she can’t have a £700 phone. But have you sat down with her and talked about money more generally?
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At the moment, I suspect she sees this change in your behaviour as being about the phone rather than the money. She’s measuring the fairness against what her friends have and against the behaviour you’ve exhibited her whole life.
If you want her to accept this change, I think she needs to understand why you’re making it. You and your husband need to have a strategy agreed and then you need to have a calm and grown-up conversation with her.
This isn’t about saying ‘we’ve spoiled you’. This is about her learning how to use money to have the life she wants.
I have good news for you on this front. Unlike when I was 11, there are now a million and one tools and online games that can make this a lot more fun for her.
First, have an amount in mind for what she gets per week. According to GoHenry (more on this later), the average 11-year-old gets around £6.50 a week. It’s entirely up to you if you want to give her more but it might be worth rethinking how you do it.
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One way would be to give her a baseline £6.50 or similar each week and then allow her to ‘earn’ more by doing something for it. This approach will teach her the value of money rather than just what it can do for her.
Back to GoHenry; this is an app specifically designed to help children aged six to 18 learn how to manage their money. You can set a standard weekly allowance and you can set tasks in-app and allocate how much you’re happy to pay per chore.
These numbers are from a few years ago, but they’ll give you an idea of tasks and average amounts.
Top 10 chores for children and how much to pay them
- Tidying room: £1.02
- Making bed: 81p
- Load/empty dishwasher: 88p
- Put clothes away: 71p
- Homework: £1.18
- Brush teeth: 72p
- Read every day: 96p
- Rubbish/recycling: 77p
- Get ready for school: 77p
- Feed pets: 92p
After you’ve got this set up (should you choose to) sit down with her and explain why you’re changing the way you do pocket money. Explain what she is going to get and how she can up that amount by helping around the house and being responsible.
I’ve used GoHenry as an example but there are plenty of other apps that do the same or similar things.
Have a look at Rooster Money,from NatWest if you like the idea of setting up chores, or if you’re more comfortable with a more traditional bank account type approach, there are loads to choose from.
Good luck!
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