As hard as it is, you can’t let what other children receive impact your judgement. You need to give an amount of pocket money that’s right for your situation and your child. Too much pocket money can lead to children not having a full understanding of the value of money and also how to manage it properly.
Explain that you can’t always get what you want
When it comes to finances this is a tough but important lesson to learn. Explaining to children that it’s not always possible to have all the money you’d like is a key part of helping them understand how money works.
And while your child’s perception may be that “everyone” earns more than they do, the reality could be different. A survey by CommBank found that almost 80% of parents pay pocket money with the average rate per week just over $11.
Show them how to make the most of their money
Teaching your kids to budget and save will help them to make the most of the money they do have. Some smart spending tricks can also help.
For example: books, e-books, CDs and DVDs are free to borrow from the library, or from friends and relatives. Whatever it is that your child usually spends their money on, there is likely to be a cheaper alternative.
Give them more responsibility (within reason)
If your kids want more money, then give them more responsibility to go with it. Think about some costs that your child could take responsibility for. Paying for school excursions? Buying their own prepaid phone card or bus pass? They might make some mistakes along the way, but it’s a fantastic learning experience.
Offer to match their savings
This is another approach you can take if you feel that it is appropriate to give your kids more pocket money. To ensure that they’re developing good saving practices you could offer to maintain the current amount of pocket money they’re earning, but offer to match the pocket money they save into a savings account which can only be used for specific purposes.
Your child can get first-hand experience of setting a savings goal and tracking their progress in the CommBank Youth app. This will help your kids to see the bigger picture when it comes to pocket money and saving, establishing some strong saving practices very early.