To give or not to give pocket money is a global dilemma that most parents have to solve. Here are some suggestions that may help.

Pocket money dilemma

South African families are feeling the economic and financial pinch and few can afford to indiscriminately dish out money. Most parents struggle with the pocket money dilemma: should they give, when and how much should they give and should they make their children “work” or earn their pocket money? Here are some global and local pointers to help parents decide.

Global trends

A survey of 1596 parents of 5 to 17 year olds in South Africa, the United States, Canada, China, Cyprus and Slovakia in which parents were asked whether they gave their children pocket money and whether they tried to teach them financial responsibilities, yielded some interesting points.

The following emerged:

    • Most parents surveyed globally, as well as the vast majority (91%) of South African parents, believe it’s important that children learn about financial responsibility.
    • The majority of South African parents believe the best time to teach financial responsibility is between the ages of 5 and 12.
    • South African and Canadian children are most likely to receive a set amount of pocket money each month.
    • 36% of South Africans allow their children to spend their pocket money in whatever way they wish, while 39% state that they give input into what their children spend money on.
    • Globally, 43% of parents involve their children in saving for their education but 79% of South African, 69% of Canadian and 66% of American children play no part in saving for their education.
    • Most South African children (52%) do not have to do chores or “work” for their pocket money while up to 96% of American children have to earn their allowance.

What now?

Globally, most parents seem to want to give children pocket money if they can afford it. Most also agree that giving pocket money can be used as a tool to teach children financial planning and responsibility. However, there are different opinions on how much and in what way pocket money should be given and if children should get it for free or have to earn it.

Here are some of the different viewpoints about:

How much is enough?

Parents need to ask around to get an idea about the “going rate” from other parents and then decide what they can afford. Pocket money in South African families (in 2014), range from very little (between R75.00 to R150.00) per month and on the other end much more (R600.00 to R1000.00 and even more) per month. Some parents have voiced concerns about their children being entertained and “funded” by those who get big allowances so this is something you will have to discuss with your children.

What will it cover?

Most South African parents agree that pocket money may be used for entertainment or to save up for big purchases such as iPods and other luxury items. Some feel that children should not be told what to do with their money while others insist that a portion be saved, promising to double the money saved at the end of each year.
Should children “earn” their pocket money?

Some parents feel it is very dangerous to give large amounts of money to kids who haven’t earned it. They want their children to experience the challenges of working hard and the rewards of earning their own money. However, others feel children should not be forced to earn pocket money and should see chores as voluntarily helping out the family. Yet others agree that only certain chores may be paid for to help children earn extra money.

Parents have the final say

The final choice rests with each individual parent. What more can a child ask for than that you work out together what the pocket money will cover, that you be consistent and reliable on “pay days” and that you allow him or her to make, and take, responsibility for his or her own financial management mistakes?

 

Sources

Dobson, J. Money Matters. Retrieved from: http://drjamesdobson.org/articles/extended-families/money-matters.
Hawthorne, T. The going rate for pocket money? Retrieved from: http://www.parent24.com/Family-Finance/The-going-rate-for-pocket-money-20080828.
Moledi, I. Teach your kids about money. 2009. Retrieved from: http://www.sowetanlive.co.za/sowetan/archive/2009/04/14/teach-your-kids-about-money
Moledi, I. Teaching children financial responsibility. Retrieved from:
http://www.bizcommunity.com/PressOffice/PressRelease.aspx?i=141144&ai=13824
When, whether, how and what to give for pocket money. Retrieved from: http://www.sakidsonthego.com/articles.php?cat=146&id=60