Child psychologists say it is important for children to understand the cost of what they want and relate it to their income, whether in the form of gifts, pocket money or payment for chores.
Rather than hand out regular pocket money, some prefer to offer rewards for household tasks
How children learn about the cost of living
According to one of the major banks, pocket money for children aged between eight and 15 fell almost five per cent last year to £5.98. Three-quarters of children in this age group receive regular pocket money, with two in three saving 25p in each £1.
Then you can sit with them to work out how they will afford it. Rather than the pressure being on you to find the money, your child becomes responsible.’
The is a number of ways to ensure your children save their money effectively, including
Virtual Pocket Money Websites
Virtual Pocket Money Websites make our tech savvy children look after virtual pocket money with budgeting games linked to an online piggybank. They can keep an eye on their money and, with the permission (and real money) of their parents, spend it on real goods via online stores linked to the website.
Adults can ‘pay’ children for chores, or as rewards for achievements. As Christmas heaps pressure to spend on both parents and children, tools like this can come into their own.
These sites also have games areas offering activities, including maths challenges, where separate virtual ‘rooster’ points can be earned and used to purchase virtual pets.
What the finance charities say
Finance Education Group (Pfeg) charity provides support for primary and secondary schools to offer their pupils money lessons. It also offers an online toolkit – Our Money, Our Future – aimed at helping children to campaign for personal finance lessons to be included in their schools.
Tracey Bleakley, chief executive of Pfeg, says: ‘Christmas is a great opportunity to talk about what money is all about – and the difference between something being expensive and valuable.
‘Learning about spending pocket money is not enough – start with how to save. Education must cover a broad range of topics, from running a household budget, managing credit and debt, to learning to be a critical consumer.’