Technology can be a helpful tool for parents to mix up the ways they give pocket money to children so they can learn more about money in the digital age.
Recent research from the Westpac 2019 Money Management Survey shows 76 per cent of parents still give physical cash and coins to kids as pocket money.
Westpac spokesperson Ainslie van Onselen said as more and more people use digital currency in their day-to-day lives, it is important to teach children about the different channels* available to manage money.
“In becoming familiar with both physical and digital pocket money, children will have a better understanding of multiple* forms of money, while also being encouraged to start good savings habits from a young age,” she said.
“One simple way of teaching children the value of money while educating them on different ways to receive it is to use cash to recognise small chores, such as doing the dishes and cleaning their room,” she said.
“You can also set up a savings account on their behalf to deposit pocket money for when long-term, higher value goals are achieved, such as getting good grades at school.
“In the case where pocket money is deposited in a savings account, an online banking app can help both parents and children easily see their savings, set targets, and watch their savings grow over time.”
WHAT ARE CHORES WORTH?
Ms van Onselen said parents could also consider being flexible* with weekly pocket money amounts to help children learn about the value of pocket money.
“Our most recent research shows that while 69 per cent of parents give their kids a minimum of $5 per week, almost half of parents (42 per cent) give their kids different amounts each time — basing the amount on their age (76 per cent) and by chore (38 per cent),” she said.
“By varying* pocket money based on chores, children will be able to establish a real connection between level of effort and time required for certain tasks, and what the expected value in return is. As children grow up, the type of chores they are assigned will naturally require more responsibility and a potential increase in pocket money.
“Subsequently, children are likely to develop a sense of pride and ownership if they receive more money for higher responsibility tasks,” she said.
“Some parents may prefer to link pocket money to a set of regular chores, such as making the bed, putting out rubbish bins or walking the family dog. This can help children understand the relationship between ‘work’ and the reward of earning money, creating a platform for learning about everyday money management.”
Of the 700 parents surveyed for the Westpac research, the following were the top motivations for them giving their kids pocket money:
- Allowing children to practice handling money (68 per cent)
- Teaching the link between work and payment (55 per cent)
- Practising budgeting and delayed reward (50 per cent)
Data source: Westpac Money Management survey, January 2019
- channels: routes or pathways
- multiple: many
- flexible: easy to change or alter
- varying: differing in size, amount, degree, or nature
- What percentage of parents still give pocket money as physical cash or coins?
- Name three motivations for parents to give kids pocket money?
- Almost 70 per cent of parents gave a minimum of how much pocket money?
- What does varying the reward for different chores teach children?
LISTEN TO THIS STORY
1. What should you do?
Write a list or timetable of chores you could or should do each week. Next to each chore, write sentences explaining how the chore is helping you, your home and family.
Time: allow 20 minutes to complete this activity
Curriculum Links: English, Personal and Social Capability
Do you agree that pocket money should be set according to the number of chores done, or do you think there are better ways to set the amount of pocket money?
Does earning pocket money really help you understand how to save money? Write a letter or post to Kids News explaining your opinion on these questions.
Time: allow 25 minutes to complete this activity
Curriculum Links: English, Economics and Business
After reading the article, with a partner, highlight all the openers you can find in blue. Discuss if they are powerful and varied openers or not. Why do you think the journalists have used a mix of simple and power openers? Would you change any, and why?
HAVE YOUR SAY: Would you prefer to receive physical money for chores or have it placed directly into a bank account for you? Why?
No one-word answers. Use full sentences. Comments will not show until approved by editors.