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Becks

Kids and pocket money – do you give yours an allowance?

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Becks    5

How does your family handle pocket money? Do you give your kids an allowance? And should you link them to chores or not?

I’ve heard conflicting ideas about what’s best – on one hand, you’re teaching them to work for the money and nothing comes for free, but on the other hand, they should be pitching in around the house regardless, and not expect to be paid for it. Curious to hear how others approach it!

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We have 5 kids and over the years we have developed a system that seems to work.   Each child has a named suffix to our main bank account where money is credited.   Once they get to about 6/7 we start to give them pocket money.   In the early years it's not much (their age in years x dollars per month) but it does build up and when they are 10 they start to get $10 a week.  All the while, they are expected to assist in regular chores - my wife has a chart.  When the child is 10+ they are beginning to get a bit more useful around the house so the expectation is that they help out in other ways - learn to make tea for mum and dad or hang out washing, for example.   The benefit of this is that if they want something (like a treat at the supermarket) they can pay for it themselves if they have enough money in their account.  

It starts getting really interesting when they get hold of their own EFTPOS card at about 12/13.  Some children like seeing their balance go up and think carefully before spending.   Others "live for today" and are sometimes disappointed when they haven't got enough for the thing they have just seen - but they know that if they wait for a bit then the money will build up again.  

Can you keep a secret?   A hidden benefit for parents is this scenario...it's the day before payday and you suddenly have to find unexpected bucks for urgent shopping or petrol.   Why turn to the credit card or savings accounts when you can secretly "borrow" from the kids (evil cackle)?     As long as you re-balance things the next day, they'll never know.    

 

 

 

 

 

  

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Talking to kids about the realities of money is a first step - around their money is a good excuse to open up the conversation.   From birth we have been putting away $50 per week into each of the kids savings accounts.   They don't have access to the money but when a statement comes through from the bank it is a good excuse to talk to them about the account and what is happening.   How the money is building up and what it is intended for (education).    Haven't had the conversation about their access to it yet!

Once when my daughter had money burning a hole in her pocket I said to her if she saved the $10 today I would give her $2 interest tomorrow.   She took up the offer and promptly forgot about the $10 throw away item she was coveting.     Lots of little chances to weave in the conversation about money in a constructive way works for me.    Another example is Daddy tax on their chips.  If I open a bag of chips for them they are taxed.   They totally get the concept now!!!!!

So in summary - I say yes to pocket money and to being creative with how it is given, retained, used, etc etc.

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mugglenz    4

We struggled with whether to give pocket money to our 15 year old, we have in the past but got annoyed when she spent it all on junk food! My new idea is that to access the pocket money she has to budget it first - so she gets used to saving for non regular expenses such as a new phone. Will see how this goes!

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PeterC    0

My sons are now 18, 20 and 22.  I had a key pocket money discussion with them about a decade ago after an argument about who gets paid how much relative to the chores they were each expected to do.  Having grown up in a household where there was no pocket money (because there was very little money) my tone was a bit... terse.  I clarified that the reason they got pocket money was because they're part of this family... and the reason they did chores is because they're part of this family... but the money and the chores are not directly linked.  I may have conveyed somewhat angrily that there is no agreed hourly rate for being a member of this family i.e. as part of this whanau you share in both the wealth and the workload.  Whatever my motivation, I know this pocket money rant was key to shaping their views on money.  I know they're better for it now, so I do think its important to take (and/or create) every opportunity to talk to our kids about money.

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The other day I realised that the only reason why I've had any success with the kids' pocket money the past couple years is because I've made it automatic... After starting out with jam jars: four of them each for giving, saving, spending and growing (an entrepreneurial/investing fund), we transferred over to online accounts with automatic payments. Like any saving, it becomes so much easier if it's automated and "paying yourself first". Now they can see their "jars" on their devices, which really helps. 

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Kiwichick    19

My kids are 10, 6, and 4. They receive $1 per year of age so for example the 10 year old gets $10 per week. Their pocket money isn't linked to their chores which they are expected to do because they're part of this family. At the moment they get paid in cash each Monday and it goes into their wallets until they spend it. I think it's better for mine at this stage to handle physical cash instead of a card and numbers on a screen. The 4 year old is the best at saving money so far, he likes seeing the number of his coins increase. The 10 year old saved up for a cell phone and budgets for her pre-paid plan. On a recent holiday two of them wanted to buy a toy as a souvenir so we explained how many weeks pocket money the toys would cost them, and they decided to buy the toys. They will make both good and not so good choices on how to spend their money, but I'd rather they start learning now when they can't do much damage. Also we talk to them about money whenever they show an interest, and we try to set good examples with our own finances :)

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paul butler    46

My kids get $4 a week each, I started at $1 and keep raising it, they are four with $500 now, they will only get this money for a house, first car or uni, and all this nonsense about giving the kids money so they can learn to waste it on pies and coke, no way, I teach them money handling skills by teaching them how money works, they are 4 and know debt is dumb, cash is king, a credit card is debt and people live in debt and you only ever borrow for a house.

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Mine don't get pocket money, but are expected to do jobs around the house. But when they have something big, like a holiday, they get $20. They also do work for Grandparents, roadside stalls, etc for their own money. I pay for things like a prepaid cellphone, for safety. They know if lost or goes to school, no replacement. When they have spending money, they have to look around first & get quotes. They also are involved in grocery shopping & are aware of bills. We have garage sales, fundraising for camps & Girl Guide biscuit selling. Basiclly, I provide the main stuff & they make their own extras.

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Kiwichick    19

To  encourage saving and to teach them about interest we've given each of our kids a money tin. If they put half their pocket money in their tin each week we also put in 50c "interest". We explained how much they'd save in a year and how much "interest" they'd get just for leaving that money in savings. The first 3 weeks our oldest only put 1/3 of her pocket money in so she only got 30c interest those weeks and we showed her how much free money she was passing up. This week the younger 2 decided to put 100% of their pocket money in the tin because they still had spending money leftover from last week, so we added $1 in interest. So far so good.

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jack    0

We choose to give them a monthly allowance. Half must be saved in a sealed money box and the rest for their leisure. This teaches them to make their money last until the next allowance day.

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When our children were 12 years old we gave them a monthly allowance.   We actually sat down and worked out what we spent over a year on clothes treats activities gifts for others etc with I then.  Virtually everything except school related expenses.   We paid this amount monthly.   It was so freeing when they asked ....can we have this. ...we answered ...sure. ..if you pay for it yourself.   Every month before they got the new allowance we went through what they had spent to make sure they had enough funds for things they new which were coming  up like birthday presents for people. 

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