The pocket money debate
If your child is at the age where they're requesting their own spends, it's time to instil some values, writes John Cradden
As my elder daughter moves ever closer to the start of her teenage years, the issue of how to educate her about money has already begun to rear its head.
It'll be a while before we'll open a savings account in her name, but she already has a much-loved piggy bank full of coins and notes accumulated from various sources (relatives, birthday money etc) that she loves to regularly empty out, count the contents and then loudly update us as to its total.
Like many parents, the ideal for us would be for her to cultivate an attitude to money in adulthood that is balanced: sensible but not miserly, and to realise that while money makes the world go round, trying to get rich is not likely to make her any happier than having enough to comfortably live on.
As large part of this, as many experts suggest, would be to allow her as much freedom as possible to manage her own money.
"Most mums and dads recognise the importance of teaching their children about money, where it comes from and its value," said Laura Haugh, mum-in-residence at parenting website Mummypages.ie.
"By instilling positive money management skills at an early age, parents can teach their children how to spend and save money wisely. These skills come into practice when children start looking for toys, games or luxuries outside of birthdays and must decide to save for these coveted items."
"Similarly with smartphones so prolific amongst our children, buying phone credit or game or music downloads on a regular basis can only be managed effectively with pocket money.
"These lessons in basic money management skills will serve them well as they go through life, from the time they get their first paid job to when they go to college and have to survive on a small budget."
Although she is too young to be getting regular pocket money, the elder has already caught me on the hop by suggesting that she would pay for her (and her younger sister, to boot) the €6 charge - each - for two hours at their favourite indoor play centre out of her piggy bank.
Of course, what she doesn't realise is that her current fund will deplete by approximately one-third if she paid for just one visit. We've already explained this to her but, of course, €6 for two hours at Playzone is an absolute bargain to an energetic eight-year old.
You could argue that we should let her pay and then she'll realise just how expensive it is, thereby gaining a valuable personal financial lesson.
Either way, our mistake here was that we didn't anticipate that she would make this kind of offer, and that we should have sat down before now to talk to her properly about what she can use her money for.
Regardless of whether it's a piggy bank fund or regular pocket money, Martina Newe of Helpme2parent.ie suggests starting by listing items they want to spend their money on, says.
"This exercise will vary depending on the child's age but it is a good guide to help you to decide what amount is appropriate. Don't feel that just because an item is on the list that the expense has to be covered, you make the decision on whether this is a valid request or not. A good way to do this is to think about and agree what the money can be used for."
The age at which you should start to give a child regular pocket money is an open question, according to experts, and depends a lot on the children's level of maturity and what independence they have already.
But the most frequently asked question among parents is: how much?
A survey by the Irish League of Credit Unions from earlier this year revealed that a total of 70pc of teenagers receive pocket money, with 74pc of those receiving it weekly.
Those paid weekly got €13 while those who were paid monthly received an average of €23.
The value of pocket money has changed for three in 10 teenagers since 2014, according to the survey, with 18pc of teenagers getting more pocket money in 2015 than they did in 2014, while 11pc get less.
Many parents wonder about making their supply of pocket money conditional in some way, such as completing household tasks or chores.
"As part of the pocket money agreement, you might list some chores or household tasks that the child must complete in order to earn the pocket money," says Newe.
"The task should be appropriate to their age in terms of safety and their ability to complete the task.
"The time by which the tasks on the pocket money list should be completed should be clear. This will save arguments or 'nagging' the child to complete the task."
You could also consider making it dependent on good behaviour and for some of it to be taken away if a child misbehaves. "The child is best warned of this and you should never take away all their money - it is important they always get something."