Pocket money can help teach children from a young age about the value of money and how to look after it.
How much should you give?
A survey by CommBank found that almost 80 per cent of parents in Australia give their children pocket money.
For kids aged between 4-6 years the average amount per week is $7.17 while in the 7-9 years age bracket it drops slightly to $7.04. At 10-12 years the average increases to $11.37 and from 13-15 it goes up again to $14.11.
There’s no right or wrong when it comes to choosing an amount. You want to pick a number that works for you given your family’s situation, ideally an amount that doesn’t impact your own finances but gives your children the chance to develop their own financial skills.
How should you give pocket money?
The survey also showed that the most popular way to give children pocket money is in return for doing certain tasks. This can help children understand that money needs to be earned. Popular tasks include:
- Household chores
- Good marks at school and completing homework
- Helping in the community
- Good behaviour.
These situations can be a win-win as children can better appreciate the value of money while you get some help and also incentivise good behaviours.
It’s important to bear in mind that you also don’t want to foster a mindset in your child that they should be paid for everything they do in the house.
You and your child can create a set of chores/ jobs in the CommBank Youth app. Once a chore is completed, you can pay pocket money straight into their account and encourage them to check their balance in the CommBank Youth app.
What should they do with their pocket money?
Obviously you want your children to use the pocket money to get a little independence, but make sure they get used to saving a portion of it every time. Not only will this teach them how to put money away, it will also help them understand the reward that comes at the end of saving when they are able to afford a “bigger ticket” item.
Once your child has started to earn pocket money, consider opening a children's savings account so they can see their money grow.