Should Parents Give Their Children Pocket Money? 5 Reasons the Answer is Yes

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So, should parents give their children pocket money? There are arguments for both sides of this but in this post, I’m sharing why pocket money is an awesome parenting tool that can help in so many areas.

If you’re on the fence then I suggest you read through this to see why giving your children pocket money is a great idea.

should parents give pocket money to their kids

Should Parents Give Their Children Pocket Money?…Here Are The Reasons Why

Giving your child an allowance with no expectations from them is not the same as giving your child pocket money. I think that needs to be said from the outset.

There are many ways that you can introduce pocket money to your kids and many ways to set up a system. What I’m going to be referring to is giving your children money in exchange for the work that they do.

That’s putting it very bluntly but it’s really what it boils down to. They earn money by completing household chores of some kind on a regular basis. Hard work may be involved (well, relative to their age of course) but it will always be rewarded.

A lot of parents wonder how to even set up a pocket money system and you should feel free to come up with your own ideas.

We personally don’t include regular chores as part of the jobs that are rewarded with pocket money because that’s just what comes from being part of the family. However, extra chores are available and that’s what we focus on.

With that in mind, let’s talk about what amazing benefits can come from using a pocket money system with your kids.

#1 It Teaches Them The Concept of Value

Children generally have very little knowledge about the value of things. My 4-year old asked if houses can sell for $100.

They don’t understand what money can get you or why parents can’t buy everything that they want.

By giving them pocket money they soon learn how far money can (or can’t) stretch. It is a super simple way to teach them the value of things and give them a more healthy mindset around finances.

Understanding the value of money can take time as well, so don’t expect your 4-year old, for instance, to pick up on the concept right away. Little kids will learn over time. It is up to you as to whether they’ll learn bad habits or good ones when it comes to money.

Besides teaching the value of money, it also teaches them the value of work. Working is a good thing. It has benefits beyond just getting a job done and this can help teach them that.

#2 It Reduces Entitlement

The amount of pocket money you give your child matters a lot less than the lessons you’re teaching alongside. Small things done consistently can make a big difference in the long run.

If there’s one thing I do not want to raise my children to be it is entitled. It is one of the most off-putting character traits that a person can have (in my opinion). This will definitely depend a lot on your own personal family values, but it’s something that I personally feel strongly about.

However, as someone parenting in the 21st century, I can see how easily entitlement can creep in. We live in a consumer culture. Things are not just easily acquired but also arrive on your doorstep the day after you bought them from the comfort of your sofa.

We have to intentionally not make things too easy for our children or they will end up expecting life to just hand them everything for free.

Real-life is not like that.

By creating a pocket money system, your children have the advantage of realizing that things cost money. It also teaches them that money is not in endless supply.

They will not ask for toys and other items all day long when they realize this. Spending their own money on things makes children realize just how much things actually cost.

A pocket money system will not solve entitlement all on its own. However, coupled will good parenting boundaries it can make a world of difference.

#3 It Prepares Them For the Real World

In life, almost all of the world’s population is required to work in order to make a living. While I think children should be allowed to be children, I do think that there are some things that they need to learn from a young age.

The concept of working and receiving a reward for it is one of those things because it prepares them for the real world.

One day they will need to work in order to buy food, house themselves, etc. Teaching them that concept now will save them from a major shock as they enter adulthood.

Not only that, but they can learn many other money lessons such as budgeting and investing now instead of trying to figure it all out in adulthood. Financial literacy is something that is sorely lacking in society but it doesn’t mean that it can’t be taught!

#4 They Can Make Mistakes Within Safe Boundaries

This is probably one of the most valuable lessons that can be taught.

We’ve all made money mistakes of some kind. When you’re an adult then there are often times serious consequences for those mistakes.

By allowing your children to have pocket money you give them a chance to make mistakes and learn how to handle money within safe boundaries.

They’re not going to lose their home or starve if they spend all their money or make a bad investment. They can learn about the importance of saving and how wise it is to be patient instead of impulse buying.

Giving them this opportunity to “practice” with money is so much better than just leaving them to learn how to use a bank account and resist the temptation of credit cards.

They can also learn that not all products are made equal. It teaches them that it pays to do some research before spending their money.

Honestly, there are so many lessons to be learned that will ultimately result in fewer mistakes in adulthood.

#5 It Gives Them a Sense of Accomplishment

Giving your children dedicated chores in order to earn pocket money will definitely give them a sense of responsibility which is wonderful. However, there is more to it than that.

While doing chores and even being patient and putting money into savings may not feel good in the moment, it does result in something great…a sense of accomplishment.

If everything is just handed out to children then they are essentially being robbed of that. Giving them the opportunity to earn some pocket money means that they can work at something and then achieve it.

We may use different methods when it comes to giving out pocket money, but this is one thing that they will all accomplish.

There is something very satisfying about working hard for something that you want and finally being able to get it.

Final Thoughts

My parents were very frugal because they had to be and they didn’t give us a lot of pocket money. However, you only need a small amount of money to start teaching. They gave me what they could afford and they taught me valuable money management lessons along with it.

I want that to be the legacy that my children inherit. Not because I want them to be wealthy but because I know that hardship that can come from poor money management and an entitled attitude.

Living within your means and working for what you have doesn’t sound fun on the surface, but they ultimately lead to a more peaceful and stress-free life overall.

Teaching financial responsibility begins at home. You have such an important role. We shouldn’t be leaving it to schools or worse, banks…to teach our children how to use their money wisely.

The best time to start working on developing healthy money habits with your children is now. It is so worth it.