Last updated on Jun 21st, 2021 at 04:17 pm

Article by: Momentum’s Education Expert Marinda Botha

Valuable lessons about independence and managing money

Research suggests that children as young as four who receive pocket money can learn valuable lessons about independence and managing money. The ‘how much’ and ‘what for’ are often the difficult decisions for parents.

While there’s no single solution that will work for every family, educational psychologist Marinda Botha has some tips for you.

Factors that influence the amount of pocket money you give your children:

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  • Your own income
  • How many children you have
  • Your child’s age
  • What they are expected to buy with their pocket money

A simple guideline of R10 per year of the child’s age per week is a good average for young children. A six-year-old child might get R60 per week (R240 per month) and be responsible to provide their own spending money for the school tuck shop, to pay for the movie they want to see that month, and to save a little towards a toy they want to buy when they have enough money.

Pocket money tips

  • It is easier for younger children to manage pocket money if it is given on a weekly basis.
  • Keep to the agreed-upon amount. Children need to learn how to plan and make their pocket money stretch for the entire week/month.
  • Give children the opportunity to make mistakes and experience the consequences of, for example, not having any money left for a toy today, because, “I spent it all on ice cream yesterday”.
  • Give children more responsibility as they grow older. They can, for example, be made responsible for buying their own airtime or toiletries.
  • Help them to draw up a budget and savings plan for bigger things they may want. Do not provide them with an already drawn-up budget. Rather involve them in the process and do it together. They will only learn and commit to it if it’s their plan.
  • Reward financially clever behaviour. You can do this by, for example, paying half of an expensive toy when they have saved for half of it.
  • Model financially clever behaviour and have discussions about it. Your child learns the most from your attitude towards money and your financial behaviour.
  • Motivate your children to invest money in something that benefits others, such as contributing to fundraisers for deserving causes.
  • Children are more motivated to save if they can see their money grow. The piggy bank gets fuller and heavier, or the amount on their bank statement increases, in the case of older children.

What pocket money and saving can teach your child

  • The value of money and that you as a parent have a budget too. Nothing is free of charge.
  • How to budget and plan.
  • The benefits of financially clever behaviour.
  • Problem solving skills.
  • The consequences of overspending or not looking after my money.
  • How to shop around for the best price.
  • How to negotiate.
  • Borrowed money, has to be paid back and it might be difficult to do.
  • You first have to pay for the things you are responsible for, before you can spend money on any extras.
  • Money has to be worked for.

Start early

Read about these money lessons for two to five year olds.

Discussing the process and how it will work with your child is part of teaching them about money. Some parents set up some basic guidelines and rules in collaboration with their children. These rules are made to fit your family needs and income, and might be very different from the rules your friends set out in collaboration with their children.

Need some help getting started? Download our pocket money contract for you and your kids. It’s on the top right of this page, under ‘attachments’.