What age should I start giving pocket money?

What age should I start giving pocket money?

Giving pocket money to children might not be right for every family. But it can be a useful way to help kids learn about managing money for those who choose to include it as part of their child’s financial education. When they get pocket money regularly, children can learn how to budget money and begin to develop crucial money management skills. But what age is the right age to start giving pocket money to your kids?

What age should I start giving pocket money?

A big question for many families is when to start giving pocket money? There are no set rules as to when you should start giving pocket money to your children. It very much depends on your family, your means and your motivation. Giving pocket money can stem from wanting to teach children about the value of money and that it doesn't ‘grow on trees’. It's also a way of teaching your children about the benefits of saving, which can be a difficult concept for younger children to grasp.

 

Research by The Money Advice Service reveals that most children can recognise the value of money and understand the link between earning money and income by the age of seven. By this age, most kids can plan ahead, delay decisions and understand that some choices are permanent. By starting pocket money before this age, you can kick-start their financial education and begin shaping their money habits in a positive way.

For some parents who decide to give pocket money to their kids, a common question is how much pocket money to give. Data from GoHenry's latest Youth Economy Report reveals what GoHenry parents are paying:

 

Age

Average Amount of Weekly Pocket Money

  7

£3.52

  8

£3.75

  9

£4.12

  10

£4.58

  11

£5.34

  12

£6.49

  13

£8.09

  14

£9.70

  15

£11.34

  16

£13.32

  17

£14.52

  18

£14.79

Why introduce pocket money?

There are plenty of benefits of giving pocket money to kids. It's a great way to kick start your children's financial education. It starts them off on the journey of learning about money management and making decisions about budgeting, spending and saving. It also teaches them crucial financial planning skills and can even help them avoid getting into debt in adulthood. A CBI Economics analysis commissioned by GoHenry and Wilson Wright found that financial literacy increases early career earnings by as much as 28%. It can also boost the economy, creating 76,400 businesses each year and adding an annual £6,98 billion to the UK economy. This further demonstrates the importance of financial education.

Saving and budgeting

As many adults will agree, saving and budgeting are not always easy. But if you learn good saving and budgeting habits in childhood, it can become something that you do naturally and without much effort. By getting into the habit of budgeting and saving some of their pocket money, your kids should have no problem carrying on these good habits as they get older.

 

According to the latest research conducted by GoHenry, Development Economics and Censuswide, 20% of people who received financial education in childhood said it would take them between 7-12 months to save up to £20,000 for a big expenditure. However, 31% of those who received no financial education as a child admitted that saving that amount of money would be impossible.

Independence

Getting to grips with money early on can help young people become independent and less reliant on others financially. When you are financially stable, you typically have more options available to you and better opportunities.

Spending responsibilities

Pocket money helps teach kids to be more financially responsible, prioritise their own spending and saving, and make more prudent financial decisions down the line.

Appreciation and achievement

Giving children pocket money as a reward for doing chores is a good way to show your appreciation for their efforts and acknowledge their achievements. With the GoHenry app, you can set up paid tasks for your child, and when they complete them, the agreed payment is sent to their GoHenry prepaid debit card to reward them for their hard work.

Use GoHenry to give your kids pocket money

If you decide the time is right to start giving your children pocket money, GoHenry makes it quick and easy. You can open a GoHenry account online or by using the app. You can then order your children's personalised GoHenry prepaid cards, set up regular pocket money payments or one-off transfers, set tasks and spending limits, and invite relatives to contribute via Giftlinks.

 

For your kids, the GoHenry pocket money app is packed with benefits. They can earn money by completing tasks, set savings goals and use their GoHenry prepaid debit card in shops, online and at ATMs. What's more, with Money Missions, they can develop their money skills and learn everything from budgeting and saving to investing and giving.

 

 

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Written by GoHenry Published Apr 11, 2022 ● 4 min read