At what age should you start giving your child money?

Are you wondering when is the right time to introduce pocket money into your child's life? This article will help you make the right decision, highlighting the key factors to consider, the pitfalls to avoid, and the right solutions to support and manage your child's finances.

A key step in financial education

Getting pocket money is a key step in every child's financial education. But at what age should you really start giving? Giving pocket money can offer a number of benefits that go beyond simply handing over a sum of money. Here's what you need to consider to make the best decision as a parent.

All the benefits of pocket money

Pocket money can be much more than a simple monetary transaction. It's a powerful educational tool that fosters the development of essential skills. It prepares your child for the economic challenges of adult life. Here are the main benefits:

• Learn to manage your finances
• Understanding the value of money
• Developing decision-making skills
• Promoting autonomy and responsibility

Receiving money for a child

• Mastering a budget : money allows your child to practice money management in a safe, controlled environment. They learn to plan, save and make informed decisions.
• Realize the value of money : by giving your child a few euros a month, you're helping him or her to understand the value of money and the necessary role of knowing how to save.
• Develop decision-making skills: each sum received enables him to make decisions, evaluate his options, set priorities and make compromises.
• Fostering autonomy and responsibility : pocket money gives children a sense of autonomy and responsibility, as they are in charge of managing their own money.
• Improve self-esteem : managing your own money promotes a sense of accomplishment and improves your self-esteem.
• Learn from your mistakes : if you spend too much money or make a wrong purchasing decision, you can avoid repeating it in the future.

Giving pocket money: your benefits as a parent

• Teaching life lessons : money can be used to teach important life lessons, such as the importance of saving, generosity and responsibility.
• Encourage good habits : you can use money to encourage your child to adopt good habits, such as taking the time to make a purchase or treating himself to something he really wants.
• Creating memories: money can help your child create lasting memories, like buying their first toy with their savings, or going on their first outing with friends.

The role of grandparents

Special donations: birthdays, Christmas and holidays

Incorporating the notion of giving on special occasions, such as birthdays or Christmas, teaches children the value of money. This can also include discussions on the concept of inheritance, and the conditions and limits of such donations between young and old.

The role of grandparents in financial education

Grandparents have a unique role to play in the financial education of their grandchildren. Their experience can enrich life lessons and offer a different perspective on managing pocket money. What's more, gifts for special occasions such as birthdays and Christmas parties will only create positive memories.

At what age should I start donating?

There's no ideal age for receiving a few euros a month. It depends on your offspring's development and maturity. However, most experts recommend starting to give between the ages of 6 and 8.

Determining the amount of the donation

The amount of the payments should be adapted to the maturity and needs of each individual. It should be large enough to allow the child to make meaningful choices, but not so large that it is exceeded. Obviously, the amounts are not the same for young people (under 8) as for teenagers.

How often should I pour?

The frequency of donations can vary. Some prefer to give money weekly, while others prefer to give money monthly or on a case-by-case basis, depending on a purchasing need.

Setting the rules

It's important to establish clear rules about the use of pocket money. For example, you may decide that pocket money can be used to buy treats, toys or activities, but not for essentials like food or clothing.

Helping you manage your budget

Giving your child money every month is a valuable learning opportunity. Accompany him in managing his budget, helping him to understand and make informed decisions. Finally, celebrate his successes with him.

Beware of pitfalls

• Don't give money for chores. This can create confusion between responsibilities and rewards.
• Don't give your children too much money. This can lead to overspending and mismanagement.
• Don't be too strict. Money and spending should be a positive experience for your child.

By following these tips, you can help your child develop healthy habits that will last a lifetime. Learning to manage each euro well is a way of gaining confidence and gradually becoming a responsible adult.

Questions and answers on gifts and inheritance

Can I write a cheque for 10,000 euros to my child?

You can write a cheque for 10,000 euros to your son or daughter if you wish. There is no charge for a manual donation.

Do I have to declare a gift of money?

In general, gifts of money must be declared to the tax authorities, especially if they exceed a certain threshold. In France, the maximum tax-free amount is 31,865 euros per parent donor and per child beneficiary, every 15 years. No written deed is required, but it is advisable to keep a record, for example, in the form of a bank transfer or a handwritten letter signed and dated in the case of a gift by hand.

What are the fees for a donation of €100,000?

The fees for a €100,000 donation in France vary according to the type of donation and the relationship between donor and donee. It is important to consider the financial and tax implications of such a sum. The notarized donation is calculated as follows:

• Gift tax: 5% (if the donee is a child or grandchild)
• Notary fees: approximately €1,000

Example of fees for a notarized gift of €100,000 to a child or grandchild:

• Gift tax: €5,000
• Notary's fees: €1,000
• Total: €6,000

Deductions from gift tax are possible in certain cases. They vary according to the relationship between the donor and the beneficiary. In the case of a couple, each parent can benefit from a tax allowance for manual gifts to his or her children. The allowance is also specific to each child. The tax authorities calculate the gift tax on the amount of the gift after the allowance.

The tax code also sets out certain specific conditions, particularly in the case of a disabled person. The allowance is not only higher, but also cumulative.

Be sure to discuss this decision with a financial advisor or tax professional to understand the potential tax and estate implications of your gift.