Copy article

How much pocket money should parents give their children?

Journalist: Marc Shoffman, Freelance

ended 26. June 2024

Hello, 

I am writing a piece for MoneyWeek on how much pocket money parents should give their children and if it helps teach them about managing their finances.

Research by Virgin Money suggests parents are giving their kids £9.33 on average per week in pocket money.

I am keen on views about how to decide what is the right amount? Is pocket money a good way to teach kids about managing money? How does it fall into a wider financial plan? Should there be incentives to earn certain amounts or should it be a fixed rate?

Many thanks

Marc

12 responses from the Newspage community

Copy all

Copy

Editor
Ben PerksVerified
Managing Director at Orchard Financial Advisers
There are so many variables that it is impossible to determine the 'right amount' for a childs pocket money. It's up to parent if they decide to give pocket money or not, and there should not be any external pressure to do so.
Pocket money is a good opportunity to build some good money habits though. If you're giving pocket money; the children's debit cards that are linked to an App are great. They allow them to view balances, monitor spending and create savings accounts under the watchful eye of parents or carers. It teaches good money management which will be useful in the years to come.
Copy

Editor
Paul DenleyVerified
CEO at Oakham Wealth Management
Children should learn about money, what having ‘enough money’ means, and the extra choice money can provide.
It’s worth applying a metric for pocket money based on maturity - perhaps £1-2 per week per year of age. Clarity prevents negotiation here!
Pocket money helps build financial knowledge, such as budgeting (allocating limited resources between toys and books), saving (piggy bank planning to buy bigger toys), determining wants vs needs, learning the value of money, and basic maths skills.
It’s worth pitching the fixed element low to allow room for incentive based rewards. Otherwise, young Beatrix might start thinking money grows on trees. Incentives link money to effort and achievement. On the flip side, incentive payments may be hard to manage, and can mean a focus only on rewarded tasks, with the potential for disappointment if goals aren't met.
It's also worth encouraging children to give money to charity, which may vary week by week, promoting a regular discussion on the topic.
Copy

Premium
Craig BuntingVerified
Co-founder at BEAR
As a parent of two young kids and co-founder of BEAR, a UK-based coffee and lifestyle brand, we give our kids (ages 8 and 5) £10 per month as a goodwill gesture for generally helping around the house. It’s not tied to specific tasks but is more about them seeing money come in and go out, teaching them the value of money and the impact of their spending decisions.

I believe it’s important not to monetise every task though. We want our kids to understand the value of doing things out of kindness and responsibility, not just for financial gain. Occasionally, we might give extra for specific tasks, but it’s not routine. This flexible approach allows us to reward exceptional efforts without setting a routine expectation.

Pocket money can be a good way to teach kids about managing money and striking a balance within a family’s financial situation while aligning with broader lessons about responsibility. Creating opportunities for children to understand money and value.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
At risk of making me look like a mean mum, my kids' pocket money is transactional. My daughter has a very part-time job in my consultancy, working on simple tasks, so she literally earns her own pocket money, but is building her CV at the same time. My son gets a piece rate for carpets hoovered, washing hung out, and dishwashers emptied. There is always something to be done but they both learn that doing more gets them more. They also learn that spending their own money helps them make fewer tap-happy decisions, so ultimately is a good way of teaching them about money management.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
At risk of making me look like a mean mum, my kids' pocket money is transactional. My daughter has a very part-time job in my consultancy, working on simple tasks, so she literally earns her own pocket money, but is building her CV at the same time. My son gets a piece rate for carpets hoovered, washing hung out, and dishwashers emptied. There is always something to be done but they both learn that doing more gets them more. They also learn that spending their own money helps them make fewer tap-happy decisions, so ultimately is a good way of teaching them about money management.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
At risk of making me look like a mean mum, my kids' pocket money is transactional. My daughter has a very part-time job in my consultancy, working on simple tasks, so she literally earns her own pocket money, but is building her CV at the same time. My son gets a piece rate for carpets hoovered, washing hung out, and dishwashers emptied. There is always something to be done but they both learn that doing more gets them more. They also learn that spending their own money helps them make fewer tap-happy decisions, so ultimately is a good way of teaching them about money management.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
At risk of making me look like a mean mum, my kids' pocket money is transactional. My daughter has a very part-time job in my consultancy, working on simple tasks, so she literally earns her own pocket money, but is building her CV at the same time. My son gets a piece rate for carpets hoovered, washing hung out, and dishwashers emptied. There is always something to be done but they both learn that doing more gets them more. They also learn that spending their own money helps them make fewer tap-happy decisions, so ultimately is a good way of teaching them about money management.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
At risk of making me look like a mean mum, my kids' pocket money is transactional. My daughter has a very part-time job in my consultancy, working on simple tasks, so she literally earns her own pocket money, but is building her CV at the same time. My son gets a piece rate for carpets hoovered, washing hung out, and dishwashers emptied. There is always something to be done but they both learn that doing more gets them more. They also learn that spending their own money helps them make fewer tap-happy decisions, so ultimately is a good way of teaching them about money management.
Copy

Riz MalikVerified
Independent Financial Adviser at R3 Wealth
I use a simple formula to work out my 9-year-old's pocket money. I take the number of days Liz Truss was Prime Minister and deduct 44. However, I plan to change to it being linked to behaviours. Budgeting is a powerful skill that more children need to learn and that can be done with pocket money or other incentives. However, we are also still in a cost-of-living crisis so not everyone has that luxury.
Copy

Rachel Beech0
Founder & CEO at Fetching
I don't pay pocket money, although there is always the opportuinity to earn money by doing jobs around the house - above what might ordinarily be expected of a child. In that respect, there is no limit to the amount that they can earn, which can be motivating.
Copy

Rachael Dines0
Founder & Director at Shake It Up Creative
As a parent of 3, I teach my children to save and spend wisely, encouraging them on birthdays to 'save half and spend half' of what they receive as presents. My eldest (14) receives £12 per month pocket money in addition to his phone bill being paid for. When my two high-school aged boys want to earn extra money for something in particular, they are offered small jobs from family like car washing, to teach them that a wage isn't gifted, it's received in return for work or services. All my children are expected to contribute to household tasks. I run my own marketing company and they see me working many hours at home in return for a salary, the equation is very visual for them and they know our life would be very different without their parent's hard work.
Copy

Graham Wells0
Founder and Financial Coach at GroWiser Financial Coaching
The right amount of pocket money to give children depends on many factors, so it's a unique decision for each family. But arguably, it's not the amount that matters. More important is to think about the nature of how pocket money is paid and how it's used. With modern banking apps, you can see how your kids are using their money, so it's a great opportunity to discuss their spending decisions, together with the benefits of saving some. Learning good money behaviours at a young age will be far more valuable in the long-run, even if the amount of pocket money paid is modest.