Financial Education

What rules apply to children's pocket money?

By Fred - 14/9/24

Bloon's opinion

At Bloon, we believe that pocket money is much more than a simple financial gesture. It's a learning tool that, when accompanied by clear, age-appropriate rules, lays the foundations for sound financial management. Setting limits, encouraging savings and offering support are essential to ensure that the child gets the most out of this experience.

Giving pocket money to a child is an excellent learning opportunity, but it also requires certain rules to be put in place. These rules help children understand that money is a limited resource, that it must be used responsibly, and that it's important to learn to save.

1. Set clear limits on types of expenditure:

‍
Pocket money is not intended to cover just any expense. It's essential that parents define the types of expenses the child is allowed to cover with pocket money. For example, candy, toys or outings with friends may be appropriate categories, but more expensive or less suitable purchases (such as online games with microtransactions) may be prohibited or restricted.

2. Encourage savings :

‍
Parents can set a rule that a portion of pocket money should be saved. Whether it's for a larger future purchase, such as an expensive toy, or simply to create the habit of setting aside, saving is a key financial skill. Children can learn patience and long-term money management.

3. Establish objectives or missions :

‍
Some parents choose to give a basic amount of pocket money, but also offer to add a bonus if the child completes certain specific tasks, such as household chores or schoolwork. This can be a good way of instilling the notion of merit and reward for effort.

4. Define a regular payment schedule :

‍
It's important to be consistent in pocket money payments, whether weekly or monthly. This helps children learn to plan their spending and adjust their desires according to their budget. Regularity also helps to establish financial discipline from an early age.

5. Monitoring and support :

‍
Parents need to be there to help their child understand the impact of his financial choices. This doesn't mean controlling every expenditure, but rather being available to discuss his purchasing decisions, what he could have done differently and the lessons learned. This encourages reflection on the use of money and fosters autonomy while providing a reassuring framework.

‍