Kids and pocket money – When should we Start?

One of the most frequently asked questions when I working with families with children, young and older one is how much pocket money should I give my children?

This article will deal with pocket and the importance of giving pocket to children.

In 2013 I carried out a survey in conjunction with the IDC in Herzliya.  One of the questions we asked was, “where did you learn how to handle your personal finances, home, school, university, other or self-taught?”  76% replied that they were self-taught. This is fine if you are financially capable, but statistics show that 50% are not handling their finances well.  Therefore, we can deduce that parents are failing miserably in teaching their children the rudiments of budgeting.  Teaching your children these skills is not hard or difficult.  One of the best ways in teaching the basic skills of handling money is in fact to give them pocket money.

Financial education of your children should begin when they grasp elementary arithmetic.  When they receive any amount of money they should be encouraged to put a certain percentage aside for saving and the rest for spending.  Afterall, money is meant to be enjoyed.

Teenagers should receive a weekly or monthly allowance and it should be stipulated at the beginning what this money covers, e.g. going out, presents for their friends.  It is important that the child agrees to these conditions.

How much you give depends on how much you can afford and also the needs of the child.  If they say that it is not enough, you should inspire them to gain some form of financial independence.  Encourage them to get a job so that they from babysitting, dog walking, giving private lessons, cleaning the stairs in the building.  Children of all ages should always be taught that certain percentage should always be put aside for savings.

Take the opportunity to teach your children to donate a small amount to charity, preferably to one with which they can identify quite easily.

Tips on giving money pocket:

• Do not pay your children for doing household chores, they need to learn what it is to work in a team. However, if there are special tasks to do, like painting a room, they can receive payment.
• Do not use pocket money as a punishment. How would you feel if you did not receive your salary for a mistake you made at work?
• Do not take some of the pocket money to buy an expensive item that your child needs WITHOUT the consent of your child.

Remember the golden rule: they need to put a percentage aside for savings.

The issue of children and their money is not complicated, and if you have some questions about this topic, please contact me either via email: suzy.kahati@gmail.com or phone me on 054-4217207 for a free consultation.

For more financial information:

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