3 different pocket money strategies

Three different pocket money strategies

Stacey Vee

By Stacey Vee  November 2, 2015

My father was big on teaching us the value of money and taking pride in your work. As a young girl, on weekends my siblings and I would have to make our beds. Then my dad would stage a military-style inspection. The kid who had folded the neatest hospital corners won. The prize: a shiny R5 coin; everyone else got a R2.

Now that I have kids of my own, we’re toying with the idea of setting up a list of chores, so that our kids can earn a bit of pocket money.

Just on a side note: do you know where the term “pocket money” originated? The story goes: back in the day, tailors would sew a small, hidden pocket on the inside of your jacket – just big enough to stash a few coins to buy a pie or something when you went into town, but not so big that your coins would jingle and draw the attention of pick pockets. Interesting, huh?

Anyway, I’ve been chatting to other moms to find out how much pocket money they’re forking out; at what age they introduced the concept (from primary school seems to be the consensus), and what their “system” is.

Turns out there are different schools of thought on the subject, and they’re loosely tied to your parenting style.

Strategy 1: Pocket money for household chores This is how I was raised, and it’s the most common pocket money system described by the moms and dads I spoke to. You just pin a chart to the fridge with the family names and chores next to them.

Remember to assign chores that are age-appropriate. “Is a 5-year-old really capable of drying dishes? Can a 3-year-old help make a bed? As parents, we know it’s easier to do the chore ourselves, but then we rob our kids of the learning opportunity,” is advice from KidSpot.

Here is a list of chores for every age - it’s a great thought-starter.

But… shouldn’t your kids be packing the dishwasher and filling up the dog’s water bowls anyway?

Strategy 2: Pocket money for ‘jobs’This was an eye-opener for me. Some of the parents I spoke to told me, a bit indignantly: “Why should I pay my kid to do chores?”

Money guru Suze Orman agrees: “You [kids] should be making your beds, you should be doing the dishes, simply because you live in the house!”

She suggests that you set up a list of paying jobs around the house and give these jobs different values according to how hard they are to do, like R20 to clean the gutters and R50 to re-organise dad’s garage. “That way you teach them that the more work you do, the more money you make.”

Strategy 3: Get them involved in the family budget The last school of thought I find the most interesting: give your kids some input on how much spending money or allowance they receive by including them in discussions about the family budget. This works better with older children, of course, and gives them insight into the family finances.

Financial journalist Maya Fisher-French has some great advice: pilot the idea by budgeting together for the next family holiday. “Holidays are a great opportunity to involve children in budgeting by providing a set amount that the family can spend over the holiday and then researching activities or ways they would like to spend it,” she writes.

Pick what works for youPocket money is a great concept: it teaches your children the value of money, and encourages good money habits, like budgeting and saving.

I lean more towards the second strategy myself, while my kids are still young (they’re 3 and 4), but I think there is a lot of merit to involving your children in the family budget when they are mature enough.

Introducing pocket money might even work out cheaper in the long-run, if you think about how much you spend on sweets and cheapie toys every time you visit the shops (like that R32 Hot Wheels toy car at the check-out aisle that you pop into your trolley – I am so guilty of this one).

The key is to pick a strategy, and then be consistent.

About StaceyStacey Vee is content strategist by day and toddler-wrangler by night. When she's not sharing hard truths about personal finance, she's baking. Baking from scratch can be expensive, by the way. Stacey lives, laughs and runs bubble baths in the city of Johannesburg. You can follow @MissStaceyVee on Twitter.

The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life or its employees.

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