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POCKET MONEY

Pocket money as the name suggests is money given to children to take care of petty expenses. This amount of money can be given by parents' everyday, every week or every month or even on adhoc basis, as and when the child requires it. As long as the child has the freedom to spend the money, it will be deemed as pocket money.

Parents extensively differ in their perspectives of whether or not to give pocket money to children. Some parents believe that pocket money should not be given since

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That will make the child feel that 'parents money is not his/her money',
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'It could lead to fights between children',
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'Unhealthy competition amongst children on the amount of pocket money they get'
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'Loss of control on where children spend the money'

However, giving pocket money to children has several advantages:
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Children feel a sense of independence and responsibility towards spending the money the right way. They learn & understand the value of money. They also learn to understand that amount of money is limited and they need to always choose between their various desires to ensure correct use of their pocket money.
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Children get into the habit of planned income and expenditure. They also learn about saving & budgeting. For eg: if they want to buy a present for their mother's birthday, they will need to put aside some amount of money every month to collect the commensurate amount and buy the gift.
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Giving pocket money to children also makes them feel an important part of the family since they know that they get a part of the family's monthly income.

Some parents even believe in their children earning pocket money. What does that mean? It means that parents can often inculcate values/ beliefs/ actions in their children by rewarding them for it in the form of pocket money. In such cases, parents divide the pocket money amount in two parts:
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One that is given on a timely basis.
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Second that is earned against some house jobs. For eg: every Sunday, you could start giving a fixed sum of money to your son if he helps his father in cleaning the car. Or if your daughter helps around in dusting the house. This will in a way also inculcate the habit of weekly cleanliness in them since childhood. Similarly, if you strongly wish to inculcate the value of ' helping others' in your children, you could promise them an extra sum of money during summer vacations if they help your maid's child learn the basics of math.

Once parents are clear that they want to give pocket money to their children, they also need to decide when is the good time to start giving the same to their children. Once children start spending sometime away from their parents in going to school, sports classes, tuitions, etc, they need to carry some amount of money on them. This could be a good time to start giving them pocket money. Obviously, in the beginning, the amount of money should be small and should be periodically reviewed as the child grows. For eg: you could decide that every birthday, you will give an increment to your child’s pocket money. Additionally, if your child excels in academics/sports, they could get higher pocket money increments!

When parents start giving pocket money to children, they need to explain to them where the money is to be used. For eg: when you first give Rs.50 to your daughter, you need to explain that this money is to cover her school special lunch, candies/soft drinks requirements for a week. If the child is given money without any direction, you could run the risk of the child using the money is a way that does not agree with you. In such cases, parents need to be very careful in not micro- managing where the child spends the pocket money, else the child will get irritated and will not get the ‘sense of independence’ that parents want to instill in the child.

Parents must explain to children that pocket money is to be used over the week/ month and hence children should plan their expenses over the time frame. It must be made clear that in case children use-up their money earlier, they will not be given extra money. Pocket money will be given only on the fixed day as decided. This will help children learn the concept of planned expenditure and savings.

Parents must always ensure that they give comparable pocket money to their children. It should neither be too much or too little compared to friends. Giving more pocket money than friends will make your child spend more and consider money as frivolous and easily available. If your child gets less pocket money than his/her friends, it will lead to an inferiority complex and the child might start resenting you.

Last, but not the least, parents must be careful not to use pocket money as a way of punishment to their children. Often, parents use ‘suspension of pocket money’ as an easy way of punishing their children. This format of punishment is not wrong to use but must be applied carefully. I.e if the child has a broken a beautiful vase and you want him/ her to understand the value of the same, you can penalize the child by deducting/ taking away the month’s pocket money. But you cannot start using pocket money as a weapon to get the child to abide by all your wishes. For eg; you might want your child to have two glasses of milk everyday which he may not want to; in such cases by incentivizing the child for more pocket money will be wrong to do since such a format of giving money is not pocket money but ‘bribe’. Similarly, pocket money penalty cannot be used as a blanket punishment to all wrong – doings. If the child starts feeling that he/she will never really get pocket money due to some punishment, he/she might be tempted to steal money from parents.