New Year, New Start – and a great time to introduce a new pocket money routine
Pocket money is a brilliant way to help your children learn about managing money. It can kick start conversations about budgeting, saving and working for rewards. If your children have been given cash for Christmas, they can add pocket money to get closer to big savings goals.
Plus, by letting kids make their own mistakes with small amounts of pocket money, they can hopefully avoid bigger financial mistakes in later life. If blowing cash on chocolate means you can’t afford a longed-for Lego set, it can leave a lasting impression!
Deciding how much to give
My New Year’s Resolution is to review the amount, now my children are nine and eleven. It’s tricky to know how much to hand out, but RoosterMoney has tips to help decide and useful research on how much children get at different ages.
“Even a four-year-old can have deep desires for penny sweets or Pokemon cards.”
I’ve been giving my two pocket money since they were very young. Even a four-year-old can have deep desires for penny sweets or Pokemon cards. Small children soon learn that different toys cost different amounts, and that by not spending this week, they can buy something slightly bigger next. But if you’re not comfortable handing out cash, you can start with a reward chart or star system instead. Check out this post for info and a free reward chart template.
New Year's Resolutions
Pocket money can also help get the kids involved with other New Year’s resolutions.
Personally, I dole out a basic allowance which isn’t dependent on doing jobs (although I have threatened to withhold pocket money if they are particularly fiendish). But you could link pocket money in 2019 to helping out around the home, such as getting ready for school on time, laying the table or keeping their bedroom tidy.
I am willing to pay my kids for extra work, such as washing the car or cooking meals (microwave mug cakes don’t count). One of my New Year’s Resolutions is to get to grip with our garden, so I’ll offer my kids extra pocket money for weeding and raking up leaves on the lawn.
“One of my New Year’s Resolutions is to get to grip with our garden, so I’ll offer my kids extra pocket money for weeding and raking up leaves on the lawn.”
Keen to get homework done in time? Offload the ironing? Cover babysitting while you’re taking all that exercise you’ve resolved to do? Try some pocket money incentives. If you need inspiration, the RoosterMoney Pocket Money Index includes lists of common chores and top-earning jobs. The only problem comes if they go on strike, because they don’t fancy the task, or reckon they’ve made enough already…
Teaching children to save money
Perhaps one of your resolutions is to help your children learn more about money.
I’ve always been keen to teach my kids to save, but using the RoosterMoney app for the last six months has made a massive difference. Before, when I was a bit haphazard doling out pocket money, my children were keen to spend it as soon as they got their hands on it.
But with RoosterMoney, they know I can’t forget. Their allowance is magically added once a week, they can see their balance adding up, and they can track progress towards any savings goals they’ve set. Basically I think they trust RoosterMoney more than me.
“Having a running total on my phone, rather than stashing cash, also avoids any raids on each other’s piggy bank.”
In fact my kids have learned to save so well that they use it against me.
I’ve always told them to save up for something they really want – but when they did, it wasn’t something I really wanted.
I wasn’t keen to buy my son the Nerf gun he found in a charity shop – so he asked to take money out of his RoosterMoney ‘Spend’ pot instead. My husband and I didn’t want to give my daughter a games console, but we agreed to match any savings she made, thinking it would take her ages to raise her half. Then she co-opted her brother, combined recent handouts from generous grandparents, and they hit the target way sooner than expected. Now they’re saving towards new games.
Using pocket money to encourage kids to budget, save and do jobs you’ve resolved to do – all ways to get 2019 off to a great start!
Faith Archer is a mother-of-two, personal finance journalist and money blogger at Much More With Less.
For more information on using RoosterMoney to set up rewards for chores and incentivise children to save by adding interest, check out RoosterPLUS.