Our son has recently turned 6, and we’ve decided to try and teach him a little about money, as well as trying to improve his behaviour, by giving him some pocket money.
Rather than just giving him a weekly amount to spend though, I’d like to build in some sort of money lesson, in particular in thinking about saving for the future.
My plan is to give him £1.50 per week, dependent on good behaviour, with the promise that if he saves all of the money up for four weeks, I will pay him “interest” and make his £6 into £10 (bet you can’t get an interest rate like that in a high-street savings account).
Although four weeks isn’t a particularly long time for a kid to wait, knowing our son, that will seem like a lifetime, and any longer and I think I risk losing his interest. Indeed, I’m not too sure this system will work – knowing our son, he’ll probably try to negotiate me up to forking out £20 per month or something, but I’d like to think that if he can see the benefits of saving from an early age it will help him look after his money for years to come.
I’d be interested in hearing your thoughts on this idea – do you think he is too young to be getting pocket money in the first place? Is it too much, too little? Any other interesting and / or effective tactics you’ve employed with your kids’ pocket money? Let us know in the comments below.
photo credit: Ksionic
Wow, that is a very clever idea. I wish I’d thought of it. Of course, with four children it would cost me a fortune!
I imagine that this will work out quite well for you. What a lucky child.
This is an interesting idea. I have two children, 5 and 2, and I’ve started thinking about pocket money recently.
Just the other day my eldest asked me why I have to work to pay money for a house I’ve already got, so I started to explain about banks and borrowing money. She lost interest very quickly. And for me, that’s the key. Not interest “on” money, but interest “in” money. She’s just not that interested yet. Believe me I fine with this, the longer they’re not interested in money, the less it costs me!
When I was a kid, I didn’t get money for nothing. I had to do jobs to get money. I used to think this was very unfair as many of my friends got “free” pocket money. But perhaps that has taught me a good lesson, I’m very much a worker and good with money. On the other hand, my younger brother got given lots of money and didn’t have to do any work for it, and he became a lazy sponger (until the money ran out, now he works – although not very hard).
So I went out and bought some car washing stuff at the weekend. A couple of buckets, sponges, etc. Instead of taking my car to the hand-wash place down the road once a month, I thought I’d get the kids to help me wash it and give them the money instead. I know I’ll probably end up doing it all myself, but it keeps my outgoings the same, gives them some pocket money, and hopefully helps them get started with the basics of money, i.e. you have to do something to get money.
When they get older I’ll think about progressing onto something else. The problem is that they like instant gratification at the moment. Once they are used to earning money and learning the value of the different coins (i.e. what they can buy in the sweet/magazine/toy shop) then maybe I’ll move onto the value of saving money for something out of their price range. Maybe it takes a couple of weeks to save for something slightly more expensive. Maybe spending some of their money, and putting the rest aside for that bigger thing.
The idea is pretty good, but what i think is, it would be better to find out the spending habit of the child with the given money. Based on this, we can gauge the spending nature of the child. So, it would be good to give a free hand to child with the money telling he could either save,spend or help others without any stipulations. Based on the child’s action, we can decide whether to allow the child in its won way or to resurrect it.