Budgeting the small stuff: does your child budget their pocket money?

Think back to these words of wisdom that you heard as a child - from parents, your parents friends, even your teachers (you were getting it from everywhere)

“You can’t spend what you don’t have” or “Money can’t buy you happiness”. How about “money is as easy to spend as it is hard to make”.

You can just see your child self giving a quick eye-roll and brushing off the above with a naive confidence of almost every mini-human out there - the future? I don’t need to think about that!

Fast forward to present day - hindsight is an amazingly frustrating thing. Whilst it would be awesome if we could rewind and plant a bit of budgeting foresight into our kiddy minds, that’s not our reality.

Now that you have kids of your own, would you want them to have a little more know-how? We get it, its not an easy one - you want them to have as much of a childhood as possible, whilst  also wanting them to be as well prepared for the future as possible.

Well with pocket money, you can do both!

Pocket money is a great - perfect small amounts that can be experimented with. It teaches the very basics of budgeting. Whilst its easy to just give your child pocket money, getting them to consider budgeting and using wisely? That’s a totally different ballgame, especially seen as there is so much influence of character in whether you kid is a natural cautious saver or a serial splurger.
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Whatever character your miniature human has, here’s a few tips and tricks to approach the subject of pocket money and how to budget with as little hiccups as possible.

1. Start with a conversation
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‍Take the time to talk about money with the whole family. Not sure how to start the conversation? Check out the RISE budget tool - your child knows where money is going in just a few clicks. Once you’ve got the ball rolling draw up a budget for the next month with your kid.
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2. Take time to negotiate.
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‍Discuss what your child uses pocket money for. Do they have costs? How much pocket money do you want to give your child? What is money worth to them and what do they want to spend it on? Would they like to continue going to local bakery everyday after school with their friends for a delicious coffee cake, or would they prefer to save up for that upcoming concert?  The decision is theirs - the perfect way to learn about making trade-offs.

At RISE, we recommend focusing on three categories at the outset: spending, saving and goals. Determine how much pocket money your child can (or should) spend. The remainder gets split between savings goals (this is a first step in learning to invest money) and your child’s savings account.

3. Set key dates every month
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‍So you’ve come to an agreement on how pocket money’s meant to be divided  Super! Now decide when, and how often you should send over the cash. You’ll also need to decide whether you want to go for the old-fashioned piggy bank, a traditional youth account or something a little more edgy (like RISE - shameless self-plug there)

4. Make it official  

‍Show your kid you’re just a serious about their pocket money as they are! Why not use our pocket money contract?

5. Monitor with pride, mistakes included.

‍Your child will run up to you several times, especially in the first months, to ask for help. This is all part of the journey. You’ll start to notice the questions and need for confirmation getting fewer and further between - budgeting will just start to become a day-to-day process. You will be surprised how quickly your child learns the tricks of the trade!


Once your child knows the ropes of budgeting, financial confidence will skyrocket. It’s the first step to learn how to handle money consciously.

But helping teach your kids the importance of money and how to use isn’t just about your kids.

Preparing budgeting plans and having open conversations about money and the future can be challenging sure, but a great way to bond with your kid.  

Sure, the ultimate goal is to ensure they enjoy financial freedom as adults, prosper, succeed; but it’s not just a one way lesson here.

Getting your kids into budgeting challenges your views on money and how they shape the world around you. It teaches how different your childhoods were, and what’s important to kids nowadays.

Just as your child may have “oops” moments, you may too. The budget might be set too high, too low, too sporadic. There is no one right or wrong formula for budgeting and both you and your kids can learn that.

As a parent, you’re also getting thrown into the mix of learning through trial and error - so your child is in great company. Set up little “board” meetings and discuss. There are an infinite amount of reasons why a budgeting plan may be slightly off - but adjusting as you go along is just part of the fun, not to mention a fantastic method of teaching retrospection, negotiation and conversation skills. The trick here is to make it clear to your child what he really needs and what a nice extra is.

Once they are aware to always take into account the expenses they cannot avoid first, they will eventually be able to spend money on 'fun' with great confidence.

Remember, you’re their biggest supporter, and learning together is what keeps skills progressing forward.

Like anything super, healthy money habits take time to master but with pocket money and your help?

You’ll be raising a money management megastar.

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Want to get started? Join RISE today!

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