Last month we made the decision to start giving the children, including Little N, pocket money. My stepchildren are 8 and 6 so they are more than old enough to understand the concept of pocket money but you might think it’s odd to give pocket money to a toddler.
Despite being only 2, he’s a smart kid and already understands that money is used to get things from shops. He loves being the one to pay at the till and sometimes he even picks things up in a shop and asks for “money mummy”! If he’s old enough to understand that then he’s old enough to start learning how money works.
I want children to be financially savvy because, quite simply, I wasn’t. I didn’t get pocket money as a child or have savings, and as I grew up nobody ever explained how things like mortgages, pensions, savings or investments worked. To some extent I still find it all confusing, although now there are great services like Nutmeg who provide simple ways to manage savings online.
With Nutmeg you can start a personal pension that is easy to use, clear and simple, expertly managed, and available to monitor online 24/7. Your pension portfolio is tailored to you and holds all your investments in one place, with a single management fee covering all of your investment pots. You get to relax while Nutmeg’s expert team manage it all for you, with the knowledge that you can log in at any time to check how your investments are performing.
The children all have savings accounts which are managed by us so that they will have some money behind them when they reach adulthood. My stepchildren, being slightly older, have child trust funds, whereas my boys have Junior ISA accounts. However, that won’t actually teach them anything about money and I want my children to not only understanding the importance of saving for themselves but also that the nice things in life are earned.
We decided to start with a small amount of pocket money, simply £1 each per week. It’s a big enough amount to be an incentive and it will grow quickly if they choose to save it. As the children get older, we might look at changing the amount.
It is entirely up to them what they do with their money. I have explained to them that if they go to the shop on pocket money day, they might be able to buy some sweets or maybe a comic. But if they save their pocket money for a few weeks they might be able to buy a book or a toy. If they save for a few months they might be able to buy a new DS/Kindle game.
To earn their pocket money we ask them to do something small but helpful. For example, Little N usually wipes the table after lunch on Saturdays, C might help tidy the toys in the living room while O will run the Hoover around. Last week, I was busy in the garden and my stepdaughter offered to help pull out the weeds. Following suit, Little N came out to do some weeding too. So I counted this as their way of earning their pocket money that week.
I’m hoping that in time this will help the children to understand about saving money and also about earning money, and grow up to be financially responsible and independent. Orrr they might grow up and pee their savings up the wall on their 18th birthdays!
Do your children receive pocket money? What age did you or will you start to give them pocket money?
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