Reader Question: How Do You Manage Chores and Pocket Money – Part Two

Yesterday I shared how we do chores in our house.  Today I will be covering pocket-money (although we don’t call it that).

financially savvy teens

Our children have never been given pocket-money ‘for free’.  In fact they were never really given any money, primarily because for a long time we could not afford it.  So, why can we afford it now?  We can’t, and in fact, we don’t.  Let me explain.

When the children were little we paid for their clothes, one hobby or activity each, social events etc.  We expected to do that and were happy to do it.  As they got older and the children became more vocal about what they wanted to do/ to wear and to go, Gary and I discussed the idea that we paid them for work around the house, but with that money they would be expected to take over control of these areas we had previously overseen.

There have been many benefits to this decision:

  • The children have learnt the essential skills of budgeting and handling money in a relatively safe environment.  Meaning if they mess up, we will be there to ‘save’ them, so to speak.
  • Having to work for the money, the children began to realise its value, realise how hard it is to come by and also appreciate far more the work Gary does to provide for his family.
  • We have never dealt with moans and groans about what they have or haven’t got when compared to their friends.  They understand if they choose to spend their money on one thing they can not spend it again on something else.  And once its gone, it really is gone!
  •  They are ever more independent.  I believe the childhood years are not only all about joy but are also the time when we, as adults, gradually teach them the skills they will need for adulthood.

How did we find that amount of money?  Well, actually we didn’t really need to.  We sat down with the children to discuss their needs, and found that fifteen pounds would cover the following:

T14:

pm13

  • 10% Tithe (£1.50)
  • 40% Saving for university (he saves this much because it is important to him)(£6)
  • 10% for pay as you go mobile phone (£1.50)
  • 20% saving for Soul Survivor (short-term saving project) (£3) His activities are mountain biking and making and playing his guitars.  This does not cost him anything at the moment, so he is saving to go to Soul Survivor over the summer.
  • 20% for spending on clothes, birthday and Christmas presents (£3)

L13

FullSizeRender (7)

  • 10% Tithe (£1.50)
  • 13% Savings (£2) She does not want to go to university so this is less important for her
  • 40% Trampolining (£6)  This is one of the more expensive activities
  • 10% Pay as you go mobile phone (£1.50)
  • 13% Clothes (£2)
  • 13% Jewellery making supplies (£2)  She would like to eventually start her own business selling her jewellery.  She also makes her presents for birthday and Christmas.

C13

pm11

  • 10% Tithe (£1.50)
  • 40% Activity (£6) She has singing lessons and piano, although Gary does some gardening in exchange for the singing lessons)
  • 30% Savings (£4.50) University
  • 10% Pay as you go mobile phone (£1.50)
  • 3% saving for Soul Survivor next year (50p)
  • 7% for clothes, birthday and Christmas presents (£1)

As you can see, this gives them a small amount of money for everything which is important to them.  We do not pay for anything for them anymore.  This means the fifteen pounds, which sounds so large, is probably saving us money, whilst teaching the children valuable financial lessons.  The specific amounts per category change depending upon their individual goals.  For example T wants to go to Soul Survivor this year so any money he earns (and he has a couple of other small jobs he does) gets split to include a large proportion to go to that.  Once he has saved enough that money will revert back to his activity money.

Some of the amounts look tiny, so we do supplement their clothes by getting them clothes for their birthday and Christmas.  We also take bags of old clothes and toys to the Salvation Army shop and receive £2 credit per bag to spend in their shop.  Apart from the presents we buy them, all their clothes are secondhand.

I can’t tell you how useful this system has been and just how much it has taught my children about money.  And really, it hasn’t cost us a penny more than we used to spend on them.  We are rarely asked for money, and if we are it is done with the expectation of not getting it.  They expect to have to pay for things themselves, which means when we offer to pay for something there is much excitement and glee, and they are very, very thankful.

How do you teach your children to be financially savvy?

13 comments

  1. Thank you for answering this, Claire. I knew you would have a unique take on it! I think you do things very sensibly. You said you were there when the children messed up – do they mess up often? Do you allow borrowing? Thank you so much for taking the time to answer the question. I am very grateful 🙂

  2. This was really interesting, Claire- I am going to show it to my husband! We have been giving our son money to buy his own clothes since last year, but I like your systematic approach , and the way your children have specific saving goals.

  3. Very interesting plan – good thoughts to keep in mind when my kids are older.

    At the moment my husband keeps a ledger with a small weekly amount tallied for our kids, based on them completing their daily chores. We pay out the balance just before we go on our annual family vacation, so the kids have some pocket money for little items and treats. Even as little kids they are learning how quickly their special money disappears =)

    Thanks again for sharing the details of your lives.

    1. I like the idea of holiday money. My dad used to keep all his pennies in a huge vodka bottle and we would be allowed to split it up just before we went on holiday 🙂

  4. Love it! We have the kids buy their own clothes. However, I would like to think about giving them a larger budget and having them earn more.
    Blessings, Dawn

    1. We started out having the children buy their own clothes and then started adding more chores, more responsibility and more money. They’ve handled it well so far.

  5. We do something similar, only on a smaller scale. I think it is a great way to learn money management. So many teens and adults get into trouble because they have no sense of how to manage their money. I would say you are raising very responsible teens. Great job and interesting post.

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