Studies show that kids who get pocket money are less likely to be in debt as adults. But how much should you give? At what age? And when should you stop giving your kids pocket money?
When to start (and stop) giving pocket money?
The question of when to start and stop is really up to you. It can make sense to start as soon as kids understand money. Most parents begin at about seven or eight and stop at 16. At that age, kids can earn their own cash by doing a part-time job.
How much pocket money should you give?
Our pocket money calculator below can help answer the simple question of how much pocket money to give. We’ve looked at various surveys across the UK and Ireland and come up with an answer.
For kids aged 8-15, the typical amount of weekly pocket money is roughly €8.75.
That varies with age, obviously. Check out the pocket money calculator to see how much is appropriate for kids of different ages. Remember, these figures are only a guide.
Why pocket money matters
Personal finance is almost never taught at schools, so it’s a good idea to start at home.
Giving pocket money teaches kids about financial responsibility and budgeting. It forces them to prioritise what they want to spend their money on. Sweets or Roblox or Lego? And for bigger items, it can also teach them to save up.
Opening a bank account can help to reinforce these lessons. Many banks offer junior savings accounts for kids under 12 and accounts for teenagers. You can also open a regular account in the name of a child.
Guaranteed income or performance-related pay?
Should pocket money be conditional? That really depends on your approach to parenting and what motivates your kids.
On the one hand, kids won’t learn much about budgeting if their pocket money isn’t reliable. On the other hand, it may seem wrong to reward bad behaviour.
But there might be a different way to think about it. One approach is not to use money as a reward but screen time. Access to devices is often a far more powerful currency than money anyway. Instead of paying your kids €2 to wash the car, pay them in an hour of screen time.
This way, pocket money can serve its purpose in teaching financial responsibility. And not a way to get your kids to do chores.
Top tip: Sell their old stuff – Another great way to teach kids to manage their money is to encourage them to sell their unwanted stuff. They can earn easy cash for old toys, clothes and other items on platforms such as eBay or DePop. Of course, it’s also a good way to teach them about environmental responsibility too. (And to get rid of their clutter.)
Digital pocket money
Gaming is the most popular thing for kids to spend their pocket money on, according to Rooster Money’s pocket money index.
Because this is normally done online, giving kids cash is a bit out-dated. It’s all too easy to end up authorising online payments on an ad hoc basis, while the cash pocket money is just used for sweets and fizzy drinks.
One way around this is to give at least some of their pocket money in digital form:
- Gaming gift cards – There are gift cards for every gaming platform available, from Steam to Roblox. Gift cards let kids make whatever gaming purchases they want without needing your credit card. This can limit the financial lessons because gift cards can only be used in one way. But they can also give kids online independence.
- Shopping/entertainment gift cards – The same logic is true for online shopping and entertainment too. Gift cards for Amazon or Twitch can let your kids take control of what they choose to spend their pocket money on.