How much pocket money?

Pocket money. Remember those days?

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Whether you spent it on ice-cream, stickers, popped it into a little piggy bank or spent it on the thrill of a vending machine, pocket money was and still is, a glimpse into the wonders of adulthood for kids.

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Or maybe, you don’t. Maybe you weren’t given pocket money or very little at all. That was just the way your parents ran their household.

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Which brings us to the question on everyones minds.

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To give pocket money or to not give pocket money? And if the answer is yes, how do you decide how much?

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In this blog, we dig deeper into the why, when and “how much” of pocket money, as well as our top tips on how to get started.

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Why should you give your teen pocket money?

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Giving out pocket money on a regular basis is shown to have some seriously positive effects on how your kids deal with their money in adulthood. It’s a fantastic way to begin to teach the very basics of money management - encouraging a healthy financial future.

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From learning the value of money and accepting that once money is spent, its gone, to understanding the concept of borrowing. Giving pocket money is the perfect introduction to financial responsibility, without being too scary or complex.

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With pocket money, kids can learn to begin to make trade-offs - and the earlier we’re educated in the world of delayed gratification, the better! Learning to wait for the things you want is a lifelong lesson. How many times did we hear the saying ‘all good things come to those who wait!” from our own parents?

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Infuriating as a child, but oh so relevant when you're an adult.

Pocket money therefore also helps kids understand the notion of consequence. Learning about  consequences for actions that are impulsive (such as spending money unwisely) is just part of being human. Making mistakes is an unbelievably important part of learning, something to be almost encouraged, rather than something to fear.

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Imagine Laura. She's one month in to her new student job. She's just received her first pay check. Exciting stuff, but for Laura it's actually pretty daunting too. She never got pocket money as a teen, so money skills aren't her strongest. All we can say is it went in one shopping trip, rather than going towards those driving lessons she really wants. Giving Laura even a tiny amount of pocket money from a young age, would have helped hone the money management skills she needed later on in life.

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When should you start giving pocket money?

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This is a tricky one. In fact there is no definitive better or worse time to start giving pocket money. As parents, you know best - we suggest sitting your child down and having an open conversation about their needs, wants and feelings about money.

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Whilst it may be helpful to discuss your friends strategies when it comes to giving their kids pocket money, it really is a personal choice. All families are different both in terms of what they can afford, their child’s personalities and how they choose to raise their kids.

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There are no hard rules, but we’d recommend taking a few things into consideration.

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Kids are exposed to money VERY early on these days; Gen Z know more about money than a lot of millennials and boomers. It would be useful to really pay attention to your child’s attitudes towards money - you can start bringing money into the conversation as soon as they understand the basic principle that you need to give money in exchange for that lollipop.

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Checking whether your child is ready has no tried and tested formula, but a basic understanding that things cost money is a solid place to start.  It’s a good idea to not start too late; age 10 is said to be a good benchmark to start having conversations about money. Getting money management basics in early means they’ll know how to handle their money as well as they know how to copy TikTok routines in no time.

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How much pocket money should you give your teen?

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Again, a question that’s debated across a variety of platforms, from child psychology research papers to those scary mums-only Facebook groups.

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We’re lucky enough to have access to our own expert, teen education psychologist Maurice Johnson-Kanyonga. His method to approaching the subject of pocket money is one grounded in communication. Having an open discussion about how much your child expects is a healthy way of broaching the subject according to Maurice. Ask your child what they want to do with their money and what they think is an ‘adequate’ amount of pocket money for their needs.

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It’s a great opportunity to have that first conversation. You can see where they are with their thinking and where you can also flesh out your take on money and how to handle it.

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With this conversation, you can establish together how much they’ll get and how often, and also make suggestions on how their money can be managed wisely.

When it comes to the actual amount, it really is your choice. Bear in mind that mistakes will be made, so consider how “costly” you want these mistakes to be - giving your teen a €200 lump sum? Brave, but risky. Again this is very dependant on your family’s budget, but €200 worth of chocolate is a lot.

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You can base the amount on a number of factors. From what household chores you expect your child to carry out or what you expect the pocket money to pay for, such as for transport or lunches. Some parents even base their pocket money payments on their child’s age; €6 a week for a 6 year old, €8 a week for an 8 year old.

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Feeling like you’re ready to start giving your teen pocket money? Here are some key factors to consider to make the process as smooth as possible.

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1. Agree on how much and when they will receive it. Pay it on a set day - that shows your teen you’re reliable and giving them your trust.  You might choose to pay weekly, ever 2 weeks or monthly. Weekly is usually better for younger children, just like adults, they need to be regularly incentivised.
2. Explain to your teen what pocket money is and isn’t for. For example, if pocket money is to cover “entertainment”, make sure it’s more cinema tickets rather than 24 apps.
3. Pay what you can afford, regardless of what other parents (or your child!) might say.
4. After that initial conversation, remember to have regular check-ins with your teen about their pocket money. You can steer them in the right direction, give them advice and give praise for awesome money management wins.
5. Explain the difference between want and need. Philosophical, we know - but keep it simple. Do you need 3 skateboards? No, but you do need to buy yourself lunch.
6. Negotiate some guidelines and goals, especially if you want your child to learn more than just how to spend. Set a target of how much they can manage to save in one month or two, and incentive them with parent-paid interest if they smash it.
7. Give your teenagers a payment card and bank account. We created Rise, the banking app for teens, based on the belief that learning by doing is the most powerful form of education. You as a parent  can supervise and help.
8. Children learn a lot about money management by watching how you use money. For example, if your child sees you setting a spending limit or shopping around for the best price, you help your child learn about sticking to a budget.

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When it comes down to it, some parents do give pocket money, some don’t. Some give more, some give less. And that decision is rooted in a lot of factors; from household income and religious beliefs to the size of the family and the parents’ own childhood experiences. That’s not even mentioning cultural influence either.

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Here at Rise, we’re all about empowerment. We believe that if you’re in the financial position to be able to give pocket money, it can develop some serious skills at a very young age. Today’s younger generation are fiercely independent, value autonomy and are keen on accountability for everything other than doing their own laundry.

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Here at Rise, we’re all about empowerment. We believe that if you’re in the financial position to be able to give pocket money, it can develop some serious skills at a very young age. Today’s younger generation are fiercely independent, value autonomy and are keen on accountability for everything other than doing their own laundry.

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Get started with RISE !