Kids need to earn their pocket money
I started receiving pocket money from my parents when I was around 10 years old. Before then, it was all a little disorganised: I would help wash the car (half-heartedly, to be sure) or tidy my room in return for the odd treat. The problem is that this arrangement was ad hoc, meaning I never knew when I would be asked to do something - or what the reward might be.
This changed when I hit double figures. My chores were formalised to the extent that I would receive pocket money each week if I performed my duties on time and without complaint. It was a contract, if you like, my very first job, and I was determined to prove I could do that job well. Whereas before I would dry dishes with a huff, or roll my eyes when asked to clear the table, I now enthusiastically embraced my role - safe in the knowledge that if I did it quickly and efficiently I would be paid every Saturday (not to mention that if I did it quickly I would have more time to watch Grange Hill and Dungeons & Dragons).
Pocket money has increased by 447% since 1987
My reward? £3 a week, and this remained the case even when I began a paper-round at the age of 15, but I never questioned whether my pocket money should increase over time. In fact, I had no idea whether £3 was fair or above the "market average", so imagine my surprise when reading Halifax's recent research that showed the average pocket money today is £6.20; and back in 1987, when I was 13, it was just £1.13. I was being paid 165% above the average pocket money "salary" - thanks, Mum and Dad!
According to Halifax, pocket money has increased by 447% since 1987. Pocket money peaked at an all-time high of £8.37 in 2005 but has now fallen back. Clearly, the age of austerity has hit even our children's incomes.
Also in the research is the fact that the number of children expected to work for their pocket money by doing household chores has reduced in the past 12 months, with just under 59% of kids now expected to work for their weekly allowance, compared to 65% a year ago.
Call me old-fashioned but the fact that more than 40% of children expect to receive pocket money in return for doing absolutely nothing appals me. I'm not sure the best message to instil in children from an early age is that money effectively grows on trees and they have to do very little to earn it. (I am heartened, however, that of those who do have to perform chores, all the classic tasks I had to perform myself are still performed today: bedroom tidying, washing-up, cleaning and vacuuming, for example.)
I'm not advocating a return to the days when Victorian children spent hours sweeping chimneys but, like Halifax, I believe that earning money can help children understand its value as well as giving them the opportunity to build strong savings habits from a young age. Truly earning my pocket money was the first step that led me to get a paper-round (£10 a week), then a job in a pub kitchen (I forget how much I earned but nothing could have compensated for the stench of some of those pans), a job behind the bar, gardening work, retail work, and eventually working as a fledgling journalist.
We should take every opportunity to teach children about personal finance, educate them about the dangers of debt, and ensure they have a sensible relationship with money that sees them emerge as confident adults, able to look after themselves financially.
The alternative is a lifetime blighted by debt, with fewer opportunities and reduced wellbeing. So take the time to teach your kids or grandchildren about personal finance and kickstart a journey with money that might hopefully see them debt-free and happy.