Wouldn't we all like to know that as our children grow up and begin their adult lives that one day they will be able to afford to go to University, buy a car and even move out!?
These days this seems so much harder than it used to be. Fees for everything seem to be going up, and there are more and more young adults having to forgo Higher Education and staying in the family home for longer. As a Mum of 2 little girls I want to try and help give them the best start that I can. I know you cannot predict the future but I guess this is just trying to prepare for it.
When our eldest was born my husband and I set up a bank account in her name. When she was first born we (or our daughter!) were very fortunate that some family and friends decided to give her money instead of buying presents or clothes. My husband and I also set up a standing order to put a small amount (very small, but every penny counts!) into her account on a monthly basis. We also decided that for her first Christmas and birthday to ask for money (she still received presents and clothes but we didn't end up with our lounge looking like Woolworths and her bank account looks healthier!)
I recently read some comments from parents about the pocket money they give their children and one Mum said whatever money her son got (pocket money, birthdays, Christmas etc) he had to save a third, keep a third and could spend a third. I think this is a very good way to teach children that they can't spend everything in one go. I have interpreted it as:
- Save-in a separate account for the future
- Keep-save for a toy, or holiday spending money or something they want that costs a bit more than normal
- Spend-for small treats
I think this is a great idea and a very good way of showing children how to look at money and saving.
Charts are also a great way to visually show children how their money is growing. If there is a toy they really want to save for, make a chart to show how much they need and show when the amount they are saving is getting closer to the amount they need. As they see they are getting closer to reaching their target they are more likely to try and save even more to reach the target quicker! You could also use a clear jar so they can see the increase in money.
Some parents decide to just give their children pocket money whilst others want their children to learn that they have to €˜work' for money.
When is the best time to start giving pocket money?
I personally don't think there is a right or wrong answer to this question! Although we have already started saving for our girls they certainly won't be getting pocket money for a good few years yet! I think children need to understand and know about numbers before they can appreciate money. 6 years old is probably the youngest I would start to give pocket money, around this age children will know their numbers and be starting to add up etc. At this age, even more than when they were younger they will start to take notice of what their friends have and adverts of toys to start wanting that doll, computer game, toy, game etc.
How much should pocket money should we give?
How long is a piece of string!? That is my answer to that question! It really depends on how much money you have in the first place doesn't it?! I also think it's worth looking at what else you spend money on for your child. If they do lots of clubs or have expensive hobbies I think it's worth explaining to them that part of their €˜pocket money' goes towards that. You could give them a certain amount per chore or a set amount each week. I personally feel it's a good idea to give pocket money on a weekly basis, especially for younger children, because to them a month can feel like a lifetime (compare it to how you feel when it is halfway through the month and you are wanting payday already!!!)
Having pocket money and having some rules around it are important in two ways:
- As a learning tool-maths, statistics, common sense and a good sense of money later in life.
- Allows your children to make choices on how to spend the money and what is important to them as an individual.
You may find one child likes to save more than a 1/3 for a bigger item where another likes to spend theirs on more instant treats. Both have valued ways of spending as long as they realise and are aware of their limits.
This may also bring up other feelings in your children. One may be slightly jealous that they don't have an instant treat, but remember that the same feelings reciprocated once they have their €˜end goal'... these feelings are good to experience and you should make them aware that they are natural and of their own making-they are in control!
We have also found the Go Henry Card and App and think it is FAB!
As a final note, don't be afraid to include your child in discussions on whether to raise or lower the amount. We may want to protect our children from money worries but most older children are more aware than we give them credit for and would rather have their money lowered for a few months than find out later that you are struggling.