Parenting

Pocket Money & Your Child- 5 Do’s and Don’ts

Swapna Nair
7 to 11 years

Created by Swapna Nair
Updated on May 16, 2018

Pocket Money Your Child 5 Dos and Donts

Parenting is always about debates and conflicting opinions, and some aspects are subject to more debates than others. Giving your child pocket money is one of those. Should I give my child pocket money? How much? When should I start? These are perhaps some of the questions that run through your mind. Pocket money allows your child to learn by doing. While money in one’s pocket is empowering, giving pocket money depends on your financial circumstances and values.

When Should I Start Giving My Child Pocket Money?

Before you start, ask yourself these questions.

  1. Does my child understand that money is necessary to buy the things she owns?
  2. Does she understand what it means to save and not spend money all at once?

If the answer to both is yes, then you can start! Starting too early with pocket money can result in your child not valuing money. She might just think that she can get money any time for no reason. Age 8 to 10 might be a good time to start giving your child pocket money.

Things To Keep In Mind About Giving Your Child Pocket Money

If you’ve decided to give your child pocket money, here are few things to keep in mind.

  1. Plan: Before you start doling out, make a planner along with your spouse – how much to give and how often to give. If you think your child is not ready (see above for When Should I Start) by all means delay it by a few months, or a year
  2. Teach: Choose a good family time to talk, maybe after dinner or during the weekend.
    • Teach your child the value and importance of money. A younger child can be taught through a story
    • You can discuss the recent demonetization with an older child
    • It is a good idea to take your child along when you go for your next grocery shopping trip, and also plan a visit to the bank together so that he understands ‘how money works’
    • Don’t give pocket money for chores such as making the bed, or clearing up dishes. These are essential chores that everyone in the family does, and your child must not expect to get an incentive for doing them
  3. Savings: You could start off with a piggy bank and graduate to a savings bank. Most banks have interesting schemes to motivate children. Here’s a little ‘savings game’ for your child – I call it the 3 glass jars. Ask them to save money in the 3 glass jars; they put 50 percent of their pocket money in one, 40 percent in the next one and 10 percent in the last one. The money from the first jar (50 percent one) is for spending on their needs and wants. The one in the second jar (40 percent) should go into savings and the 10 percent jar is for charity. This way you are teaching your child how to budget and how to part with their money for a good cause
  4. Supervise: You must allow your child to decide what he wants to spend on, but also keep an eye on it.
    • Your role here is to help or guide when required. Do not nag him about his choices
    • Your child will make mistakes, and that’s all right! Allow her to learn from their mistakes
  5. Set the rules: Do not go beyond the budget and frequency that you have chalked out in the beginning. If your child overspends or loses money, allow her to face the consequences. Do not help out by doling out more, in such cases.

The most important thing that you can teach your child is to ask himself before spending: Do I need it or do I want it? So, give your child a taste of the real world by starting him on pocket money, but do ensure he learns to use the money wisely and to know that it is a means to an end, and not the end itself!

Did you find the tips shared by Swapna Nair useful? Have you started giving pocket money to your child yet? If yes, how do you ensure that your child spends the pocket money wisely? Do share in the comments section below – and help other parents take the right decisions at the right time!

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| May 22, 2018

Indeed pocket money concept had been always helpful as a child to us a now to my eight and half years old son. He literally says that he is saving money to make a big house in future.

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| May 16, 2018

thanks for this blog.

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| Dec 28, 2017

thanks mam

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| Dec 28, 2017

thanks mam

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| Oct 24, 2017

Thank you Shashank

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| Oct 24, 2017

Yes Shikha.

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| Oct 24, 2017

Thank you for this wonderful blog. Simply Awesome and the best part is "Savings game"

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| Oct 24, 2017

No, I haven't started giving pocket money to my child as yet, but I plan to do so by the time she is 10 years old. I am quite sure this Mantra 'Do I need it or do I want it?' would help her decide how to make judicious use of money.. also the saving formula of 50%,40% and 10% would do wonders.. thanks Swapna Nair Ma'am for sharing this wonderful blog with amazing tips.

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| Oct 24, 2017

Thank you Nahida

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| Oct 23, 2017

nice tips ma'am.... worth reading

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| Oct 23, 2017

Thank yo uNisha

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| Oct 23, 2017

Swati it looks alright. At the same time ask if there is something available for less than ten ₹ and if he could choose that once in a way to save a rupee or two and add to his savings.

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| Oct 23, 2017

Good article. Need to try out..

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| Oct 07, 2017

very nice article.. actually I was confused about this matter.. my 8yrs old son is also asking for pocket money.. nt exactly pocket money he wants to eat something in the school so I give him only Rs10 weakly once... is it right?or give some advice..

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| Oct 07, 2017

Thank you all. Money is integral to us and if we can manage it early in life it is good - a wise man said that it is better that money is a good seecant but a bad master.

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| Oct 07, 2017

excellent. great tip to help kids to understand the use of money.

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| Aug 08, 2017

xlnt article. sure I wld follow this gud habit

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| Aug 08, 2017

the article is very nice and the tips given are really very useful.

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| Aug 08, 2017

very nice article

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| Aug 08, 2017

Nice...

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| Aug 08, 2017

very nice, thank q

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| Aug 08, 2017

very nice...

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| Aug 08, 2017

Very helpful, thanks

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| Jul 18, 2017

I really liked it especially the way u have divided the pocket money into different parts.... thanks

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| Jul 17, 2017

very nice and meaning full

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| Jul 02, 2017

helpful.

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| Jun 30, 2017

Nice very useful

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| Jun 30, 2017

grt.... soo helpful

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| Jun 28, 2017

superb information. i loved it. tks for giving such kind of info. its very useful.

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| Jun 28, 2017

very nice

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| Jun 28, 2017

Really worthy..

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| Jun 26, 2017

Very helpful and properly explained.....

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| Jun 26, 2017

thank you.

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| Jun 26, 2017

vry helpful tipz .

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| Jun 24, 2017

thanks

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| Jun 24, 2017

Those are very important nuggets for parents... Thanks Swapna mam for putting it forth in a beautiful way...

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| Jun 24, 2017

Great Swapna! Very helpful. thank you.

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| Jun 24, 2017

Beautifully penned down Swapna....

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| Jun 23, 2017

Thank you all. Thank you Canisha for your encouraging words.

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| Jun 23, 2017

Really helpful

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| Jun 23, 2017

Hello Swapna, this is not only informative but helpful as well. I have already attended your live chats and now a blog from you is a bonus! Thanks.

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| Jun 23, 2017

Quite informative blog from you Swapna

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