We’ve teamed up with RoosterMoney, the pocket money app, to bring you some useful tips on starting a pocket money routine with your kids. Pocket money is great way to introduce how money works, and it can help instil some really valuable lessons that will last a lifetime!
Agreeing how much pocket money to give.
A good place to start is figuring out what you expect your child to cover with the money. One approach is to look at ‘Needs’ versus ‘Wants’. First decide what ‘Needs’ you want to cover for them, and then what ‘Wants’ they should be covering themselves. It’s also a great way to introduce the idea of budgeting, however old they are. Getting them to add up all the things they get from you each, like sweets or magazines, will illustrate how much you actually spend on them. Once they have to start covering the sweets and other treats with their own money, they’ll usually start thinking about what they spend on much more carefully! You can also check out the RoosterMoney Pocket Money Index, which breaks down the average pocket money by age, which may help with your decision.
Put conditions on their pocket money
Chores and Jobs
Linking pocket money to chores around the home can be a great way to reinforce that money has to be earned. Even for us adults, getting something we feel we’ve worked hard for feels a lot more rewarding, and it’s the same with children, they’ll appreciate that new toy even more if they feel they’ve earned it, and they’ll be proud of it too. They may also start to think more carefully about how they spend it too! And remember to be clear what jobs are extra earners versus the jobs you expect them to do as part of the household.
The top chores given on RoosterMoney are:
Reward charts
Reward charts are the perfect way to get your kids started with pocket money, especially if you don’t feel they’re ready for actual money, and would prefer to use stars instead. (With the RoosterMoney app you can actually set the currency to ‘stars’ for that exact reason). You can pay-per-chore, pay-per-star, or only pay once all stars or chores are achieved. Kids love to see their progress on reward charts, and we’ve created our own free one that you can download here if you want to give it a go.
Behavioural
Rewarding kids for good behaviour is popular with a lot of parents of younger children on RoosterMoney. While it can be extremely effective, it’s important to keep it positive too. Try not to use the threat of not getting pocket money as a way to get your kids to do something though. And we don’t recommend taking money off them for bad behaviour either, as this doesn’t encourage children to save carefully for fear their hard earned money could be taken away at any moment. One to be aware of!
Talk about money more
Being open and having positive conversations about money with your kids is key. Only 52% of parents talk to their kids about money, but if we shield our children from the realities of money, we’re only delaying the learning process. You can use everyday occurrences to spark the conversation – explaining why you’re turning the lights off, or where the money in the ATM is coming from, or discussing what to do with that fiver from granddad. Holidays are full of ‘teachable moments’ too – if you’re eating out, try playing ‘guess the bill’ (it can give a great insight into their perception of what things cost), and go one further, help them convert it back into pounds and pence!
Choose goals to save for
Some kids just love saving for the sake of saving, but a lot of them need to have goals to focus their efforts. Starting with these goals is one of the best ways to teach kids about money. Ask what they’d like to save for, and by when, then help them formulate a plan of how to get there. Small things like sweets and magazine are a great start, but when they their wants get bigger, like phones and tablets, you can offer to match what they put in once they’ve saved 50% of the total value, or try adding the final 10% at the end of a set period – it’s all about finding incentives that can keep them engaged! Once you’ve agreed what you’re saving for, print out a nice big picture of it and stick it on the fridge, or their bedroom wall, to make it feel more tangible.
Top goals on RoosterMoney at the moment are:
Consistency
Being consistent with the conditions you’ve set is really important to ensuring the lessons stick – when you’re in the shop, or that last aisle of the supermarket, if they’ve spent all their pocket money, don’t undo all your hard work by offering to buy that magazine or pack of sweets anyway – it’s not a ‘Need’ after all! Learning that ‘when it’s gone, it’s gone’ can be a powerful lesson.
Make it fun!
Making it fun is our mantra at RoosterMoney! A lot of people think of money or banking as boring, something we think should change – which is why keeping it fun for the whole family is really important. Whether it’s decorating a reward chart, setting challenges for yourself as well as the children (why shouldn’t you be rewarded for cleaning too) or making sure everyone is involved in deciding what the best value lego set is. This will ensure that your children are fully engaged in the pocket money process and there are less arguments for you to deal with – which is always a bonus!
About RoosterMoney
RoosterMoney is a pocket money tracking app designed to help parents teach their kids the value of money in a digital age.
Simple, progressive and gameful, RoosterMoney uses the latest technology to bring to life all the sound traditional financial principles we were brought up with (or wish we were!) and make managing money relevant and smart. From as young as 4 years, you can sign up to the digital tracker which lets your children keep track of their money, save towards goals and earn rewards while you oversee what money goes in and out of their account (you remain the Bank of Mum and Dad without making deposits).
RoosterMoney encourages families to learn together so that parents can actively educate, motivate and empower their kids financially and gives everybody the reassurance that they’re fully prepared for the future.
The app available on iOS and Android as an app, or you can download it on Kindle Fire from the Google Play app store. www.roostermoney.com