Giving Children pocket money - When and How Much?

While pocket money might seem straightforward, it's often a tricky topic, and if you don't have a plan, you could end up creating problems for yourself.

Ask why you're giving pocket money

Pocket money can be used to teach all sorts of things: delaying gratification, the benefits of shopping around, and even the happiness that can come from giving money to a good cause.

Whatever it is you want to teach, there's a way to build it into your pocket money system.

"If it's a teaching tool, you have to be clear about what the goal is," says Amy Koit, an accountant and mother of three.

"If it's a teaching tool, you have to be clear about what the goal is," says Amy Koit, an accountant and mother of three.

Ms Koit, who wrote a book about teaching children money habits, wants to help her children become savers rather than spenders.

She has them put half of their pocket money in a bank account, with the other half to spend as they choose.

"In terms of the effect it has had on them, I saw them be more financially savvy," she says. "They'd compare prices at the supermarket and if they did want something, they would really think about whether it's what they wanted to spend their money on."

Eventually, she plans to help them use the money they've saved up to invest or start a business when they turn 18.

Many parents start pocket money without a plan, says psychologist and family therapist Jennifer Beard, which can lead to trouble down the road.

"If you implement something without knowing where it's going, it will backfire," she says.

How much pocket money do Aussie kids get?

  • Children aged 4-8 get $6.20 per week on average

  • Children aged 9-13 get $9.60 per week on average

  • Children aged 14-18 get $17.60 per week on average

  • 28 per cent of children don't get any pocket money

Source: Share The Dream: Research Into Raising the Invisible-Money Generation Report( Financial Planning Association of Australia); based on quantitative survey of 1,003 parents who have children aged 4-18.