Pocket money is serious business for children. Whilst adults can earn a real salary, use credit cards, have mortgages and take out loans from business loan companies such as everline.com or utilise the dubious payday loans available (such as Quid Quid, wonga, Mr Lender etc.) the little ones depend on a hand out from the bank of Mum and Dad. Encouraging children to play with toy money is an early way to start them on the financial road of discovery, and sorting through your small change to learn the different values. This gets them used to counting and handling money and the different denominations.
Learning about money
To educate them more, take them shopping and explain the price tickets. Penny sweet counters can be a valuable learning tool for budgeting; can they afford 10 x 12p sweets this week? Once they understand the concept of prices, encourage them to write their own shopping list with prices, and they can work out what they can afford and if they need to save up. Aim to give them their pocket money on the same day of the week to get them used to a regular income. This again will help them budget, much in the same way that as adults, we have to.
Learning to save
If your children spend some of their pocket money but have some change left over, encourage them to put the change in to a piggy bank. This is first step of learning to save. As they get older, they can start to put some pocket money, or birthday/Christmas money in to a building society or bank savings account. Teaching them the difference in interest rates will be great for their Maths at school, but also show them that their money can really grow.
Part time jobs
As they get older and their spending habits change from sweets and comics to computer games, CDs and concert tickets, it’s time for a part time job. As we move from real newspapers to the internet, the traditional paper boy job has become rarer to find, but there are still plenty to consider: grass cutting; dog walking; shopping for neighbours; Saturday shop work; car cleaning and so much more. There is still plenty of time for school homework, and part-time work for kids teaches them the value of working hard.
There are plenty of ways that pocket money can be stretched when it comes to birthday and Christmas present giving. Giving vouchers for jobs around the house and garden is a great way. They can design them on a computer or with an old fashioned paper and pencils, and give their time rather than their money. Making presents is another way. Depending on your own skills, you can encourage them to bake cakes, make sweets, knit scarves, grow pots of herbs, paint pictures, sew pin cushions or even make plaster cast models. They can buy the materials, but still save money and learn so much in the process.