Generous mums and dads around the UK start giving their children pocket money when they’re as young as three.
Our latest research* has revealed that nearly a quarter of parents with three-year-olds give the toddlers up to 50p a week to spend. By the time their kids hit 15 years old, more than 90% of parents give them an allowance – and these lucky youngsters get between £7 and £8 a week, on average.
An important lesson
Receiving pocket money doesn’t just let kids treat themselves to the things they want, like sweets and toys. It also helps them to learn important lessons about money management and budgeting.
Let’s say you give your five-year old £2 each week (the average allowance for this age group is between £1.51 and £2). He comes home from school one day and tells you he really wants the same toy as his best friend, which costs £5. Rather than buying it for him, this is a great excuse to teach him about saving. If he puts his pocket money in his piggy bank each week, he’ll be able to afford the prized toy in less than three weeks.
When he gets older, you can start teaching him the importance of earning money as well. For instance, you could raise his allowance in return for him doing certain jobs around the house, like laying the table for dinner.
It’s little lessons like this that help kids understand money better and prepare them for the daily financial management that becoming a grown-up brings. And let’s be honest, balancing the books each month when you’re running a busy household isn’t the easiest job in the world!
What’s it worth?
Giving your children pocket money also helps teach them what things are worth. You’d be amazed how innocent most kids are when it comes to what stuff costs!
Check out this video we made last year. As you’ll see most of the children we spoke to have a lot to learn about how much things are worth! While one thought that a house costs £1, another believed their parent earned just 1 pence – hardly enough to give them any pocket money!
However, when it came to what they’d do if they had all the money in the world, these kids didn’t have to think for long. One would splurge it all on chocolate, while another would buy Transformers toys!
Slipping the mind
According to our survey, it’s not just kids who need to learn about the importance of budgeting but some of their parents too. Nearly half of the mums and dads we spoke to admitted they didn’t always remember to give their children their allowance each week. And 50% of parents revealed they have borrowed money from their children’s piggy banks at least once.
*OnePoll questioned a nationally representative sample of 1,822 adults aged 18 and over between 25th February and 7th March 2014.