Clint Wilson, father of four and founder of nimbl, questions whether it’s time we replace the term ‘pocket money’.
Come Saturday morning, millions of children across the country will receive their weekly pocket money. Come Saturday afternoon, millions of children across the country will have spent the lot on sweets, toys or apps. It is unfortunate that the first impulse of many children with a pocket full of coins is not to deposit them into a piggy bank, but into a shop till.
In fact, a survey of 10,000 parents and children, conducted by the Royal Economic Society, found that almost a quarter of children fail to save any of their pocket money. This is despite the fact that half of parents give their children pocket money in order to encourage responsible spending habits.
Beyond the classroom
That instilling financial responsibility in children from a young age pays great long-term dividends is difficult to deny. It was for this reason that, in 2014, the Government introduced financial literacy to the national curriculum, ensuring children are taught things like budgeting, saving and the functions of money.
But rather than focusing solely on formal education, we need to look beyond the classroom. We need to look at the example we are setting at home, starting with the very words used. We need to ask ourselves: is the term ‘pocket money’ reinforcing our efforts to teach children financial responsibility, or is it proving counter-productive? Is it time that ‘pocket money’ underwent a rebrand?
As a term, ‘pocket money’ creates the wrong impression if we want our children to save. It suggests a small amount of money designed to be spent all at once; a weekly or monthly treat that does not need to be budgeted. Larger purchases do not tend to be covered by pocket money, but rather by a grant from the ‘Bank of Mum and Dad’. Put simply, pocket money does not engender a sense of financial responsibility and instead trivialises the money given to children.
Moreover, for all the developments in the way we now spend money, we continue to give ‘pocket money’. This is despite the fact that the evolution of mobile banking and the proliferation of contactless payments means that money is no longer exclusively kept in the wallets in our pockets. We need to ensure that children learn that ‘pocket money’ does not have to be pocketed, else we risk letting them forget that money maintains the same value, regardless of form.
Perhaps, then, we should rebrand ‘pocket money’ an ‘allowance’? As a term, ‘allowance’ is not only more befitting of an age in which many children receive electronic money, but it could also help encourage a change in a child’s attitude. For one, an ‘allowance’ tends to describe the money given to teenagers and older children who are expected to budget. Plus, although an ‘allowance’ is often used to describe larger sums than weekly ‘pocket money’, it is the principle that is important: it implies an amount of money paid to support their needs or expenses – essentially their living costs, such as a phone, clothes or travel.
My wife and I made the change when our daughters were aged 8 and 9, and they became much more responsible with money. Of course, this did not happen overnight, and was not solely down to the change of terms, but it did help reinforce our attempts to make them more financially responsible.
We also gave them clear guidance about what they could do with their ‘allowance’. They were told that a certain percentage of their money had to saved, another percentage donated or used to help others, while the remainder is spent on items of their choosing. You may well find, like we did, that children begin to save a greater proportion of their allowance than you initially envisioned and that they even enjoy watching their savings grow.
When it comes to instilling and encouraging financial responsibility in our children, we should start at home with the very language we use and as part of this, we should also consider rebranding ‘pocket money’.