Q: My five-year-old daughter is asking for pocket money already! I assumed I would only introduce it when she's older and going to the shops by herself, however she says 'everyone at school' gets some. Is it fair for me to say no? If I do give it to her should I link it to her behaviour or pay it no matter what? JS, Kent.
I feel bad doubting what your little girl is saying but it would be unusual for a whole class of reception or year one children to all get pocket money already. I'm sure some do though and it might feel to your daughter that 'everyone' gets a weekly handout if a few classmates have been talking about it vociferously at playtime.
Alternatively, she could be indulging in a little exaggeration to make her point. Either way, I'm sure this won't be the last time you get the 'but everybody else does/ has/ gets/ is allowed to' line when she tries to persuade you of something through her school years!
In fact, according to a Halifax Bank survey, 20% of eight to 15-year-olds didn't get pocket money and more relevant to your daughter's age group, another survey of over 100 parents of primary school children found almost half did not dish cash out to their kids.
So rest assured you are certainly not the only one, nor are you being unreasonable, if you decide not to hand over your money just yet.
That said, I'm very pro giving sensible amounts of pocket money to primary schoolers – it can be a highly effective way to teach them the valuable skills of budgeting and saving. Even if, at this stage, it's just putting a few coins together for the next issue of their favourite magazine/ a shiny new hair clip/ sheet of stickers.
It can also be rather good for their maths as they'll be working out how much more they need to afford that much-longed for toy. At five, you might have to help her with some of this and the value of different coins but that's no bad thing as she can learn with you.
So if you do want to start giving pocket money, the next question is how much?
The Halifax survey found the average UK child gets £6.25 each week. The youngest children in the survey were eight and still got a hefty £4.44. Unfortunately the research did not cover little ones your daughter's age but I think £1 is more than enough for a five-year-old. Many will be perfectly happy with 50p.
My own son is slightly older than your daughter and has recently started getting this sort of amount. He is simply delighted to have money of his own and hasn't yet complained if others in his class get more (although he did recently question why a friend got £2 from the tooth fairy and he only got £1! Pretty tricky to answer!)
Should she receive her cash automatically or do you want to use it as a reward for good behaviour?
If used well, pocket money can be a highly effective behaviour management tool for school-age children, provided they value the money enough for it to motivate them.
Child psychologist Dr. Jemma Rosen-Webb advises that if you do link pocket money to behaviour, it's better to do this positively rather than threatening to dock her total if she does something undesirable.
It will be much more effective if your child is rewarded and working towards something rather than having money taken away for poor behaviour.
At five your daughter probably needs daily feedback and quite a lot of structure so she is very clear about what she needs to do to receive her allowance. With this in mind, I'd advise a star chart with six or seven specific and reasonably achievable criteria, relating to things she needs to improve on.
Examples could be 'getting dressed for school without help' 'saying please or thank you' 'doing your homework' or 'putting your toys away before bedtime'. If she does that particular thing that day she gets a star and if she gets all her stars she gets x pence, or she could get a few pence per star.
Sit her down and explain the system and even let her contribute her own ideas on how the star chart and rewards might work.
What about chores? Should children get pocket money only if they keep their room tidy/ set the table for dinner/ wash the car?
Some parents believe kids should just do their bit as part of mucking into family life, others are happy to encourage their child to do their fair share with a financial incentive.
Although using money for specific household jobs is a good introduction to how the world of work operates, the danger is that children start refusing to do things for 'free' and that everything is given a monetary value.
A nice balance is to define everyday 'unpaid' tasks - perhaps making their bed in the morning, putting toys away, and clearing up after dinner. Other 'extraordinary' jobs - washing the car or helping with a big clear out – can then be paid for.
Finally, you need to consider whether you're going to place any restrictions on what she can spend her pennies on.
Offering a little advice to younger children at the shops is wise and helps with their personal finance education. ('Darling, are you really sure you want to buy that plastic dinosaur when you have got 27 already?')
Beyond this you need to work out whether any categories of products, such as sweets or make-up are out of bounds. As she gets older you can leave her to make her own decisions more and more.
Liat Hughes Joshi is author of Raising Children: The Primary Years.
If you give pocket money, what amount did you decide on and at what age?
Is it linked to expected behaviour or specific chores?
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