Giving kids pocket money
Paying pocket money
When it comes to understanding money, it is never too early to
start teaching kids about earning money, saving money and
If you think it's right for your family, giving kids regular
pocket money is a great way to develop their money skills, as well
as encouraging independence, patience and goal setting.
Here are some tips about managing pocket money for children.
Why give your kids pocket
Children develop their habits and attitudes about money from
their parents and how money is managed at home. Giving kids pocket
money is a great opportunity to teach children the value of money
and help them understand about saving, spending and donating.
Giving your children money can help them to make money
decisions. They can choose whether to spend their money now or save
it up for something bigger.
Paying pocket money is not appropriate for every family so it is
up to you if you prefer to use other ways to teach your children
How often should you pay kids?
When you pay kids pocket money use this time to chat with them
about what they plan to do with their money.
The frequency of payments is entirely up
to your family and will depend on what suits your family's
You could start with weekly payments for younger children, and
then extend to fortnightly and then monthly payments for older
children and teenagers. This will help your child develop budgeting
skills as they will need to manage the money over a longer period
of time as they get older.
When a child gets to an age where they could start part-time
work, you could consider cutting back their pocket money to
encourage them to look for a job.
Paying kids for household
Some parents pay their kids pocket money without expecting jobs
to be done to earn it, while others expect pocket money to be paid
for particular jobs around the house. If you decide to pay for
jobs, one of the trickiest things to work out is what jobs you
should pay your children for and what jobs are 'family jobs' that
are expected to be done as a contribution to the family.
Paid jobs vs family jobs
Which jobs you pay for and the ones you don't will vary from
family to family. Here are some suggestions. Family jobs that you
might not pay your children for could be things like setting the
table for dinner, making their bed, washing up and tidying their
room. Paid jobs could be tasks that a parent would otherwise have
to do, like sorting washing, mowing the lawn or vacuuming the
You don't get something for nothing
Pocket money could be paid to encourage a good work ethic. If
you set certain chores for your kids and the chores are not
completed, you could choose to not pay pocket money for those jobs
or pay them less. This will reinforce the idea that you only get
paid in full when you complete the job properly.
Talk to other parents
Talking to other parents can help you get an idea about what
other people are doing. You can find out what jobs they pay their
kids for, how much they are paying and how often they pay their
kids. Getting other parents' opinions can help you work out a
system that suits your family.
Saving or spending pocket
Teaching kids the value of saving money versus spending money is
important. Here are a few different approaches to think about, to
encourage the idea of saving some of their pocket money.
- The 50%, 40%, 10% rule - Save 50%, spend
40% and donate 10% to your kid's favorite charity.
- Three jars - For younger children, you
could have three jars for saving, spending and donating and your
children could put money into each jar. This method helps your kids
understand the difference between saving and spending.
- Budget - You could work with your child
to draw up a budget and decide together how to split up the pocket
- Investing - You could consider investing
a small amount of your child's pocket money.
Kids' bank accounts versus piggy
When it comes to banking your children's money, think about the
best option for your family. You could start a bank account for
your child, get them put their money in a piggy bank or do a bit of
By setting up a bank account for your child you can give them a
starting point for the ideas of saving and interest from a young
age. Most primary school age children can do banking through their
school banking program once a week. You will usually be reminded
about banking day in your school newsletter, so this can be a
Bank accounts also give you an opportunity to go through a bank
statement with your child. You can show them when the money went
in, how much the balance of the account is and also what interest
was paid. This will familiarise your child with these kinds of
Piggy banks are a fun way for children to start learning about
money and to encourage saving. They are a good option for younger
children as a savings starting point and are a more tactile
experience than putting money into a bank account.
Kids can physically count the money in their piggy bank whenever
they need to check the total. This will give them a great sense of
achievement and help them recognise coins and notes.
Money lessons online
Try MoneySmart Teaching's digital activities to help your kids
learn some important money lessons.
Pocket money is a great way to introduce
children to the ideas of saving, spending, budgeting and donating.
Set up an approach to pocket money that makes sense to you and is
practical for your family.
Last updated: 18 Dec 2015