Cambridge Building Society: The Importance Of Pocket Money

By Author: Elizabeth Smythe
Total Articles: 2
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The subject of whether or not to give children pocket money is one that sparks debate amongst a lot of parents.
Some parents refuse to give their children any money because they want them to 'learn the value of a dollar.' These parents believe that children earn whatever they are given are more likely to be financially-savvy when they are older. It's their way of ensuring their offspring have funds to put into their building society bonds rather than debt.
Others prefer to fund 100 per cent of their child's expenses so that they are free to concentrate on their education and have no distractions on their way to getting a well-paid job.
Many parenting experts believe that the best way to teach children about money is somewhere in between these two tactics. They believe that children should be given a set amount of pocket money each week but that under no circumstances should this rise.
This will teach them a lot about money management and the reality that being able to afford things that you want requires a certain amount ...
... of self-discipline. Those who aren't given enough money to experiment with or are given so much money that they never go without will find it a lot harder to learn these lessons.
Handing children a credit card is seen by some as a fantastic way to teach children about debt and interest by some and a horrific way to get into debt by others. However, by setting a small overdraft limit on the card, youngsters will quickly learn important lessons about what they can and can't afford.
There are rights or wrongs surrounding the pocket money debate. Many parents will usually treat their children how they were treated when they were growing up. However, there does appear to be long-term benefits from letting a child experiment with money from an early age.