Navigating the world of pocket money is always a tricky task, and The Barefoot Investor recently brought this subject back into the spotlight with his three-jar system - Smile (learn how to save up for something you want), Splurge (spending money...
Navigating the world of pocket money is always a tricky task, and The Barefoot Investor recently brought this subject back into the spotlight with his three-jar system – Smile (learn how to save up for something you want), Splurge (spending money for instant gratification) and Give (donate a portion to the community). This strategy may work well for younger children who feel excitement and gratification from dropping money into a jar, but it doesn’t necessarily align with what a teenager would be particularly inspired by. Furthermore, the three-jar strategy doesn’t solve the problem of finding out what kind of pocket money style works for you as parents and carers.
We recently conducted an internal poll for Raise staff about strategies that worked (and didn’t work) for their own children and there were three key systems that really stood out. To help you decide what works best for you and your teens, here’s an overview of each as well as the pros and cons of each solution.
1. Rewards for chores
One of the most common pocket money strategies is for teens to earn it by helping out with tasks around the house. Chores such as doing the dishes, taking out the rubbish, tidying their bedrooms etc. are done on a regular basis
This solution worked wonders for one of our Program Area Manager’s Carmen . “We had never believed in paying for ‘family tasks’ but gee, it has made a difference! The kids (10 and 13 years old) came up with a list of jobs each and I then added weekly tasks (my daughter cooks a meal once a week and cleans the bathrooms, my son mows the lawn, and they both clean the cars),” Carmen shared.
Pros
- Contribution to household tasks
- Good lesson that money should be earned and not just given
- Gives teens a sense of empowerment
Cons
- If the same tasks aren’t done consistently each week, it can be hard to keep track and determine how much has been earned
- Teens can start trying to negotiate how much a task is worth
2. Money for nothing
Another popular solution is to forego the chores and simply give teens a set amount of pocket money each week which they are expected to use to pay for all of their expenses. If they want a new pair of shoes, lunch out with friends, a trip to the movies – it all needs to be paid for with their weekly allowance. It’s their responsibility to allocate and budget for things they want to purchase and do.
Success of this strategy will depend largely on the maturity of your teen. Raise PR Manager Emmeline says, “I originally thought an allowance should start around 13 years old as independence flourishes, teens learn to manage their own budget by balancing needs and wants (need new jumper vs want to eat junk food vs hang out at movies). But I think 14 years old is probably better – depending on the young person.”
Pros
- Teens can make better choices on what to spend their money on
- Learn how to budget and save to be able to cover their everyday costs
Cons
- Less incentive to work for money
- Teaches teens that money comes from authority as a “gift”
3. Get a proper job
For some young people, working for their spending money is their only source of income and for others it supplements regular pocket money they receive at home. Alternatively, casual jobs such as babysitting, doing odd jobs and selling goods can be a way for teens to earn pocket money without the onus being on parents and carers to provide it.
This strategy works well for Shani, one of our Program Counsellors. “My son bought his own PS4 2 years ago (at age 11) from odd jobs helping people. A mate of mine paid him to help demolish an old structure and fill a trailer for a day. He moved furniture for my mum, babysat a puppy during the holidays, plus stacks of jobs around the house for me and his dad,” Shani said. “My daughter paid for her plane ticket to Melbourne and Sydney a few years ago for some cool youth events she wanted to go to. She has multiple mini businesses selling baked goods to teachers, baby sitting and tutoring.”
Pros
- Teens learn key skills, such as independence, teamwork and responsibility
- A chance to build their CV and demonstrate they are a self-starter
Cons
- Takes time away from school and studies
- May negatively impact extracurricular activities and friendships
Every family is different, and there’s no one-size-fits-all solution to navigating pocket money and teens. Decide which strategy suits you and your teens best and this may change and evolve as they get older.
Which pocket money solution listed above resonates the most with you? We’d love to hear from you in the comments section.