I am often asked by parents “what are the common mistakes to avoid when giving kids pocket money?”
Based on my experience, the most difficult mistake to avoid is to let your kids use some of their pocket money to reward themselves. A lot of parents want to see their kids save all of their pocket money, but by doing this they are missing the opportunity to let their kids make a choice as to how to spend their pocket money.
My daughter’s first purchase
Our daughter wanted to buy a Care Bear with her pocket money. This lasted two weeks before her want would change. Finally (after a few more weeks) my daughter decided she wanted a set of tea cups from the local store. So with $20 in hand, we went to the store.
The tea cups were made of porcelain and looked quite dainty. We both went to check the price, but there was no price on the box of tea cups nor was there a shelf price. As we walked to the counter to buy the tea set I wasn’t sure if $20 would be enough. Would my daughter be disappointed on her first purchase?
I placed the tea set on the sales counter as my daughter looked up at the sales assistant with her $20 in hand. No price came up in the system.
Sales Assistant: Excuse me, what was the price displayed on the shelf?
Me: We could not see any price on the shelf. Is there no price in the system?
Sales Assistant: No there isn’t. I will need to get some help.
As she turned around, she noticed the Store Manager was helping at the counter next to her. There must have been a problem, as there was a line getting progressively longer and people were starting to get impatient.
The Sales Assistant asked the Store Manager, “Do you know the price of this item?” The Store Manager replied, “Not off the top of my head.” He looked a bit frustrated as he was trying to help with the initial problem with the counter next door.
My daughter looked up at me anxiously. Then the Store Manager smiled and said, “I’m not going to worry too much if we sell that for $4.99.” The Sales Assistant turned to my daughter with a smile and said, “It’s your lucky day. That will be $5.00 please.” My daughter looked at her “deck” of $5 notes and gave one to the sales assistant.
We walked out of the store together, both with a big smile on our faces. My daughter was smiling because she had enough money to buy her tea set. She could go home now and have a tea party. I was smiling because my daughter was learning how to manage money the fun and easy way.
Call to action:
Let your kids decide what to do with a part of their pocket money. Let them reward themselves.
The money conversation above is an extract taken from my book “Don’t Eat the Marshmallow – the fun and easy way to teach your kids about money”