What Are the Benefits of Pocket Money
Should we be giving our kids pocket money? There are lots of benefits to teaching your children about money, giving them their own pocket money to buy toys or other things they want can be a great way for them to learn all sorts of life lessons.
Whether or not you link pocket money to doing chores or there are other conditions which children have to fulfil in order to get their pocket money. Once they have the lessons of managing their money can begin.
Studies have shown that children who are given pocket money are less likely to get into debt as adults as they understand about money management and the delayed gratification that comes with saving.
Reasons to Give Your Children Pocket Money
Here are a few specific benefits of giving your children pocket money.
Learning the Value of Money
Money is a tricky concept for children to grasp and the easiest way to teach them is undoubtedly to get them to use money themselves. This could be getting them to plan meals within a certain budget, or allowing them to spend a certain amount of money each week buying their snacks. Or of course they could be given pocket money so that they can begin to realise how much the drinks, treats, toys and games they want actually cost in comparison to one another.
Saving, Spending and Giving
Giving every penny a purpose is a great way of managing your money. With children you can start to teach this concept by having different pots for saving, spending and giving.
Having a saving pot teaches children how delayed gratification works. They have to give up something now so that they can get something in the future. Having physical jars or an app with different money pots allows children to see their money growing. And having something they are saving for is great for teaching them both the value of money and how a bigger sacrifice now means they will reach their goal more quickly.
There are also some great side effects of saving towards and achieving a goal. Not only do children gain a great sense of achievement when they finally have enough to buy that toy they really wanted but they have gained a greater understanding of the value of money and the value of their possessions.
Having a giving pot is an opportunity to teach children the importance of giving to those who are less fortunate than they are. You could even agree to match their donations to give an added incentive for them to save. And choose a charity together that you can give the money to.
Alternatively the giving pot could be a sharing pot so that the money they put in is used for shared activities or buying gifts for others.
Teaching Independence and Responsibility.
One of the benefits of giving pocket money to children is that it reduces the pester power they have. If they have their own money then it is up to them if they buy that magazine in the corner shop or not. If they do then they can’t buy the toy for longer or they won’t have money to spend on treats later in the week.
Next Up: What Age Should You Start Giving Pocket Money