16 August 2017
“Smart” pocket money.
Most teenagers receive a certain amount as pocket money each week. This is a way for parents to grant some sort of financial autonomy to their kids. It also teaches them the value of money, how to budget, save, etc. But how much to give? How often? And for what?
Agreeing on an amount
In Belgium two out of three parents give their children pocket money, generally from the age of 13. Amounts very widely: on average, parents give their children between 20 and 100 euros a month for their personal spending. Over the years this amount tends to increase: many teenagers receive a “rise” as they grow older.
You decide how much you give. Once the amount has been set, the question of frequency arises. Sophie, mother of 3, occasionally gives her daughter Laura (12) pocket money: “My husband and I occasionally give our daughter Laura, who is 12, some pocket money. And her grandmother does too! Some months Laura can end up with 50 euros, which I think is too much. I think it is time to have a joint discussion, with her grandmother as well.”
Learning to save
Mike, the father of Amy (16), thinks it is important for his daughter to learn the meaning of saving. “Obviously I buy Amy everything she needs. In addition she receives pocket money to save for small extras, such as a special pair of shoes or a trip she is planning to take with her mates once she graduates. In this way she can make her own choices and avoid compulsive spending.”
Therefore money is not only good for teenagers. For parents it is a good teaching tool: it enables children to become independent and to budget intelligently. They can take out money as from 5 euros but not overdraw.
Seven out of ten children spend their pocket money as they like. This is the case for two teenagers, Sam and Ben. “Johan, who is 17, spends his monthly 25 euros mainly on food, drinks and going out. Eva, his younger sister, spends her 20 euros rather on clothing. We do not lay down any conditions, they can spend their pocket money as they like. Moreover we never refuse their pocket money by way of punishment.”
Do you want to know how your kids spend their pocket money? And manage withdrawal limits and online transactions? Use the online services of your bank.
Sarah simply gives her son James, who is 15, pocket money on his account. “It is very easy and I never forget. James has his own bank card which he uses to pay or take out money. With an app on his smartphone he always knows how much he has on his account. This is also true for me: as a joint manager on his account, I can check where his money is going.”
He can even buy online. “My daughter Poppy is 15 and loves handicrafts. For her twelfth birthday I open a PayPal account for her, which is linked to mine. Each month I transfer small amounts to her account so that she can buy materials online for her crafts” explains Karen. The possibilities are infinite. It is up to you to set limits in terms of trust and amounts allocated.