Giving pocket money to children for doing chores is a great way to teach them how to manage money, an essential life skill in the modern world. Still, parents, expecting parents and young families tend to have questions about pocket money. In the post we answer four common questions every parent has about their children earning pocket money.
1. When should I start giving my child pocket money?
Children should start learning the language of money as soon as possible, for their sake, as compound interest has the power to turn a small amount of savings into a large sum of money over time.
That being said, there are no hard and fast rules on when to start giving money to kids. Parents typically introduce pocket money at age 6 or 7, but it’s fine to start earlier or later if your child is ready.
They might be ready when they can do chores and grasp basic concepts like earning, spending and saving.
2. How much money should I give?
$5 to $10 weekly is reasonable for younger children. But the amount of pocket money you should give will depend on your circumstances. Kids can generally manage money well when they know how much they will receive and how often. When deciding how much money to give, consider your budget, the age of the child and the chores that you expect them to do. It also makes sense to factor in everything you expect the pocket money to cover (e.g., lunch and transport).
3. How often should I give them pocket money?
Again, this depends on the circumstances, as well as your personal preferences. You can choose to give your child pocket money daily, weekly or monthly. Whatever you decide, be sure to follow through with the arrangement. Weekly payments usually work well for younger children. As your child gets older, though, paying them on a monthly basis will force them to stretch their money, preparing them for adulthood.
4. How do I get my child to value different chores?
There are different pocket money systems. Paying pocket money motivates children to do chores. However, some families feel that everyone should help with chores and kids should only be paid for additional tasks.
Whatever your approach, you can get kids to value chores by communicating their importance, increasing pocket money and paying extra for challenging tasks. If they’re only paid for certain chores, then motivate them by making it worth their while.
Paying your children pocket money for household chores teaches them valuable financial lessons. Your kids learn the value of money and that they can earn it. They also learn how to spend and save and that there are consequences for carelessness and unwise decisions. The end result? An independent, responsible and money-savvy individual.
When it comes to investing the sooner you start, the more time compounding growth has to work it’s magic. Consider joining the Itrust Invest community today and start to make a real difference to the future of your loved ones.
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