Pocket Money for Kids - What's an appropriate amount.

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locknbarrel

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Hi everyone

I have three young kids. The eldest is now 7. I want to start giving a weekly allowance to start teaching them about money.

How much do you all give your kids? What's appropriate? It's the usual thing - I'd like them getting an amount that's similar to their peers.

With Covid they are completely removed from actual money. They are never in shops anymore so they don't even see paying for anything. Everything is card oriented nowadays so they rarely see physical money. Getting actual money into their hands and making decisions with it is important.
 
I suppose people differ but giving money to children so young is something I don't see done. There are many other ways one can teach children of where everything comes from and the value of such. Sometimes I wonder is it grown ups that want children growing up so quickly, let them be children and remember they're like very good sponges, they absorb an awful lot from all around them.
 
I’m a fan of pocket money, and agree 7 is a good age to start. But my kids are much older now so I’m out of touch with suitable amounts for a 7 year old. (A parenting discussion board might be helpful, not sure if Rollercoaster still exists).
Maybe your child will blow all his money on sweets on the day he receives it, or maybe he’ll buy a comic every few weeks, or maybe he’ll save every penny until he has enough for a toy or video game. It’s all valuable learning.
I‘m sure every family has a different way of doing pocket money - but here are some tips from my experiences as a child and parent.
I would suggest the amount starts small (max €1) and increase gradually every year on his birthday. If there are any ‘rules’ or expectations, be clear from the start. For example some families give higher amounts but expect half to be saved. Try to be consistent. Decide what day pocket money is to be paid, make sure you have change and pay it on the due day (especially when the child is young).
By the time he gets to secondary school, jump it up a bit. Continue to increase on birthdays.
My youngest is in secondary school and gets €8. If he wants to go to the cinema occasionally, he uses his own money. He buys his own phone credit. But we pay for his Leap card, and anything linked with school. He would get cash gifts for birthdays and Christmas. Over the years he tends to save up those gifts for big purchases like technology and gaming. Or if we are buying him something (recent example was a Garmin sports watch) and he wants a better one, he would pay the price difference.
Kids get very resourceful when they have to manage their own money!
 
My children looked for pocket money when their friends started getting it; the initial plan was they were to complete certain weekly household chores to get it.

Within weeks I found myself in arguments that they had or hadn't done X or Y that week; or Jack had done Jane's job and wanted extra.

I decided life was too short for this carry-on.

So I swapped it around; if they wanted pocket money for something, they would ask, I'd find a task they could do there & then, (suitable to their age at the time) & they got the agreed amount.
 
We started them at €2 a week at 7, subject to them doing some chores. That seemed to work okay. I’m toying with the idea of Junior Revolut for the eldest. The kids also have savings accounts where the bulk of communion money etc has gone. They also have Disney stock and are learning about the importance of recurring income streams from the likes of Disney+ and spending income rather than capital.
 
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Can I ask how do they hold their own stocks? I thought you had to be 18 to open a stock account. Mine get no pocket money as yet. Too young at 7 in my view. Any cash gifts are put into their savings account. They can play monopoly and shop for now. Time enough.
 
I set a savings target for mine. If they or we want to buy something, I put a plan together that will help us achieve it with some sacrafices.
For example, if we dont get a takeaway and cook instead, we can add that money to wards the item to purchase.
Same when we are out and skipping buying a particular treat, that money also goes towards the item.
We then add the money up that we dont spend and work towards our saving target.
This is useful in the months leading up to a holiday and we come up with a savings plan for their holiday spending money.
 
Long past pocket money scenario now so don't know going rate but I never liked to link it to helping around the house, in my opinion children should do age appropriate jobs anyway and not for money! Pick up their clothes, help set table etc, that sort of stuff, life lessons really.

My grandson who is 6 loves his piggy bank and gets the odd few coins from relatives etc and he knows that when it's full he can spend half of it on a toy and put the rest into the bank so I don't think it's ever too early to introduce the concept of money and managing it.

I had a boss once who gave his children 10p per year of age plus 10p over, always reminded me of cooking a roast!
 
Susie2017 said:
Can I ask how do they hold their own stocks? I thought you had to be 18 to open a stock account. Mine get no pocket money as yet. Too young at 7 in my view. Any cash gifts are put into their savings account. They can play monopoly and shop for now. Time enough.
Click to expand...

Hi Susie2017,

Through bare trust accounts with a wealth manager.

The accounts are in our names but marked as being beneficially owned by the kids.

Gordon
 
I have not heard of a bare trust account. Can you set it up without a wealth manager ? I would like to do it down the road but dont fancy paying anyone apart from the usual stockbroking fees. Could it be done through Davy ?
 
My eldest is 8, and no pocket money mentioned yet.
They do get money for birthdays and Christmas, and they have their own credit union accounts where it all goes - he tells everyone he's saving up for college! But no regular weekly allowance yet.
Any mention I've heard from him about his friends is they sometimes get some change to buy whatever chocolate they choose in the shop, but that's it.
 
Our 2 are 5 and 8 and we do a token chart . X number of tokens is worth €2 and they have to earn the tokens.
Previously we were giving away their old toys to friends etc or charity shop but since the local charity shop wouldn't take any more we found they were just filling the attic. What they now do is choose which they dont want and we try to sell them online . The eldest is certainly learning about depreciation now!!!
 
Depreciation is a good lesson. I'm not sure what you mean about Davy. I heard they have to pay a hefty fine. But otherwise as to their future I'm uncertain. I imagine they must have plenty of shareholders on their books who will have to be looked after ? I just wondered if they would set up a bare trust.
 
Susie2017 said:
Depreciation is a good lesson. I'm not sure what you mean about Davy. I heard they have to pay a hefty fine. But otherwise as to their future I'm uncertain. I imagine they must have plenty of shareholders on their books who will have to be looked after ? I just wondered if they would set up a bare trust.
Click to expand...
"Bare" being the appropriate word when you go back to the cupboard :p
 
@Susie2017

Here's an older thread covering the topic, including details of what Davy offer.

Custodial Accounts as Investments for Children

Hi All, I am looking to set up custodial stock accounts for my children. I came across Zurich's Child Savings Plus. I am wondering if anyone knows if there are options or possibilities to directly setup custodial accounts in Ireland - I'd rather avoid Zurich's fees if possible. I was living...
www.askaboutmoney.com

There are a few other threads on the topic of your have a search.

Personally, I have a bare trust in place over regular savings plan with a life company, so all the taxes are looked after by them. Yes, there are fees and charges, 1% government levy, and 41% exit tax. But the simplicity suits me at the moment.
 
Our child has a savings tin.
We open it every December (which covers xmas stuff) and the rest is banked.he is 8 and doesn't get money directly but weekly money goes into the tin,the post office account & credit union.
It's great too start them from a young age understanding the value of money.
 
We give our son 50c per year of age so he gets an increase each year. Last year he really wanted a puppy so we agreed he would give up €2 per week to go towards the dog's upkeep (he's ended up being rather more expensive than anticipated!). It wasn't so much the cost of the dog but I wanted him to understand that these things cost money too. I don't pay him for doing chores. He lives here, so he should be involved in helping out around the house without getting extra money for doing so. If he gets money for birthday/christmas etc, the deal is that he needs to save at least half and he can spend half/save up for something he wants. If he needs extra money (in fairness not much for the last year!) we discuss it and he would usually get it as long as it's not something ridiculous.
 
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