As soon as we have children, we go straight into parenting mode. Looking after them- feeding, teaching, caring for them, growing them to be happy and healthy.
Teaching them to be independent, and we try to prepare them for adult life as much as we can.
But how many of us actually teach our children the importance of money and how much to save or spend?
I’ve never been taught that. I don’t remember in school being taught about budgeting and how to save.
All I remember is that my mum would give me a small amount of cash every day, and I had to decide whether to spend it or save it.
Later on in my adulthood and when I started to work, I taught myself alone how to save, what to save and why I should save it.
The Understanding of Pocket Money!
Sometimes, we as parents have to understand the importance of pocket money and then share it with our children
I will be honest here – it took me a while to understand why I should give pocket money to my children. I buy them the things they need; they are still little, and they are most of the time around me.
They have a free school meal or a packed lunch, or for my eldest child, I top up her account with money for her to use for lunch. So why should I give them money?
Pocket money is actually the child’s first experience with their own money. It is very special moment for them from their childhood and it is also very personal thing for them.
It is very important to teach children about money at every age; it is not as simple as just giving them a few pounds each week; it’s about helping them understand choices, consequences, and the value of what they have.
How Much To Give?
Here us the parents, we face another challenge of finding the right balance: how much to give and what lesson should it carry.
Of course, I am going to say there is no right or wrong amount, and it all should depend on the family income and budget.
So instead of asking ”How much to give?” let’s change it to ”What do I want my child to learn from this?”
If you want them to have money just for sweets, then a little amount like £1 a week will be enough, but if you want them to practice saving and planning, then more will be needed, for them to be able to work with it.
It also depends on the child’s age. Of course, you will not be able to do this with a 2-year-old. My son is 7, and he still doesn’t fully understand money and why he should save. (it’s a work in progress)
Although there is no right or wrong age, I personally think, we should start teaching them the importance of money and how to save even the tiniest amount, somewhere around the age of 5.
What Should It Teach? Pocket Money Isn’t Just Spending Money
A common mistake is treating pocket money as ”fun money” with no structure. When that happens, the learning opportunity is lost. When there is no structure, the learning structure disappears.
You can divide it into three categories: Give, Spend and Save.
Split into three jars so that they can put a small amount in each jar.
Jar one for spending:
The money from this jar can be used for anything. Spending on impulsive buys, daily treats, and days out with friends in the park. This is the most immediate and exciting part of pocket money. It gives them the straight satisfaction to enjoy their money in the moment.
They will experience choice in one of the simplest forms. They decide what they want, when they want it and whether it is worth spending the money on it. These small everyday decisions will help them build confidence and independence.
Jar two for giving:
Here, we have to teach the children to ask themselves the question – ”How can my money help others?”
We are teaching them to care for someone else. Saving a small amount of cash that can be given to charity monthly, or using the cash to buy something that the child needs from the charity shop. It teaches them to help other people in need.
It makes them think beyond, not only for themselves, and it also shows them that their act of giving have positive impact on other people.
Jar three for Saving:
Saving for bigger things that take time to afford. We teach patience and consistency. When a child sets the goal for what they will be saving the money for – a game, a toy, or something they really care about- they begin to understand delayed reward.
Instead of getting something they really want immediately, they experience the process of building up to it. Children will learn to think ahead – How much do I need? How long will it take? Is it worth it?
Pocket money isn’t just about giving children spending power—it’s about giving them a safe space to learn financial skills. Whether you give a little or a lot, what matters most is the structure and guidance around it.
By treating pocket money as a teaching tool rather than just a handout, you can help your child build habits that will serve them for a lifetime.