Getting pocket money teaches your child how to manage their own finances. But you have to go about it the smart way. How much pocket money should you give, when should you give it and what should you give it for? There aren't any universal answers because every child and every parent is different. However, these smart tips will put you on the right track!
1. Agree on who's paying what
Agree clearly on what you pay for and what your daughter or son pays for. Regardless of whether it's a hobby or going out, or whether it's clothes, mobile phone bills or transport, make sure to set out the details. By clothes, for instance, do you also mean jackets, shoes and underwear?
The older the child, the more responsibility you can give them. A 10 year-old can go and pay for their own chocolate drink in the sports club, whereas a 17 year-old probably wants to go shopping alone for a certain pair of trendy trainers.
2. Decide on a set amount
How much pocket money should you give? Work it out together.
- Make a list of the costs that your child will personally cover
- Work out how much on average he or she will need each week or month
Have a joint look at the household budget. Work out how many hours you (or the average Belgian) have to work for, say, a pair of trainers. This is a good way of illustrating the value of money.
3. Give pocket money at a set time
Choose a set time to give pocket money and stick to it.
- Younger children should be given pocket money each week
- Older children learn more when they have to manage a monthly budget
4. What happens if all the pocket money is spent right away?
Give your kid the freedom to make mistakes. It's possible that they spend everything at once and approach you for more money, but it's best not to give in. Stick to giving them that set amount of pocket money at that set time. This teaches your child to give more though to what they do the next time. And that's a valuable lesson for later!
5. What if your child genuinely can't get by on their pocket money?
Sit down together and write down what your child has spent over the past month. You'll then quickly see whether or not:
- you're giving enough pocket money
- you'll need to explain what managing a budget involves
- a student job is required
6. Teach your child how to save
Managing a budget the smart way means having something left over at the end of the month. Of course, it's not about hoarding everything away, but rather the importance of building up a reserve. If the wish list contains something expensive (a festival ticket, smartphone, etc.), work out together how long it will take to save up for it.
7. Cash or card?
Piggy banks are fun for younger children, but a bank account is usually the way to go when they reach a certain age (12-13).
A free young person's account allows your teenager to get to grips with banking, but you remain in control.
- You can set a spending limit
- You have control over the account as you hold a power of attorney
- A minor can't go ‘into the red’
Thanks to our K'Ching app, your kids can also take their first secure steps in the world of online banking.
8. Mastercard prepaid: the perfect pocket-money card
If your son or daughter also wants the freedom to pay online and when they're abroad, the Mastercard Prepaid Card is the ideal substitute for pocket money. It works in almost the same way as a credit card except that you need to load it with a certain amount in advance. So when the card's empty, the shopping stops too!
Learn more about young people and finances at www.kbc.be.