A recent survey by Halifax found that almost 80 per cent of 8-15 year olds receive pocket money and the average amount totals around £6.20 a week. Now, I am not against pocket money but a massive 85% of parents don't always make their children earn their cash and I think it's about time we taught our children to learn to earn. As parents we're not doing our kids any favours by just handing them cash, rather than giving them the chance to earn it. Pocket money is often the first experience children have of managing money and I think we should be taking a more active role in teaching our kids the importance of earning their pocket money and saving for the things they'd like.
Money management skills shouldn't be learnt in adulthood or when you're already up to your eyeballs in debt, it should be taught when you're a child and the earlier the better!
Studies have shown that children can form an opinion about money from as young as SEVEN, yet financial education is not widely taught in schools. In fact, according to research from Experian, only 22% of parents are aware of their children receiving ANY form of formal financial education! That means that it's down to us, the mums and dads, to teach our children the importance of good money management.
Good financial sense is an essential life skill in the same way as learning to swim or ride a bike. If kids take an active role in family life and are encouraged to take part in activities to earn their pocket money rewards, they'll not only build up their financial savvy but also their self-confidence and will finish up with a brilliant feeling of achievement. There are all sorts of ways kids can earn their pocket money, from washing the car to walking dogs - whatever works for you as a family. But the point is that pocket money should be earned not expected.
Parents are starting to cotton on that personal finance education is vital for young people but according to Experian, over a third of British parents remain concerned about their child's ability to manage their money when they become financially independent. However, help seems to be at hand and there are now great money management apps and websites for children which allow them, to a certain degree, to take charge of their money and start their financial education earlier. I honestly don't think it is ever too early to start.
I have recently been working with Jangle a new app which allows your child to set a savings goal for something they really want. Once they've set a goal, between you, you can choose a number of tasks (a combination of fun and chores) and pledge an amount which will be deposited into their virtual savings box once the task is complete. This kills two birds with one stone, it teaches kids about saving AND earning money all at once! You or your child can also add a custom task which can be handy if your child is reluctant to do something.
There are also websites like Qwiddle, GoHenry and Roosterbank which provide debit cards and give kids the opportunity to learn more about their saving and spending habits.
At the end of the day, pocket money is beneficial to your child whether they've earned it or not as research suggests that 55% of people who did receive pocket money as a child were able to add to their savings and are better able to save for retirement and this can only be a good thing.
If you'd like to find out more about Jangle or other ways to teach your child about money, have a look at my 1-minute guide to teaching your child about money