The concept of pocket money isn’t a new phenomenon, although the value has increased significantly in recent years. According to the Childwise Monitor 2018, kids now pocket £11.20 a week – up from £9.70 last year. With the cost of living continuing to rise, teaching our kids the value of money is one of the most important lessons we can give them, and pocket money is a good place to start…

We’ve compiled a list of top tips to help you use pocket money to educate your kids about the value of money.

1. Lead by example

“Do as I say, not as I do ” doesn’t always work as a parenting mantra, especially when it comes to crucial life skills like money management. Children learn good budgeting skills from their biggest influence – you. Children these days probably know how to use a credit/ debit card or take cash from an ATM, but do they know where this money comes from? Take the time to explain to them how the money is earned and what spending it means – and that it isn’t just a ‘magic’ card.

2. Manage expectations

Today’s children are all over social media, and see the lives of the rich and famous splashed all over their smartphones daily, which can very quickly devalue money. There’s no stopping the reach of social influences, but you can manage expectations by talking about the value of everyday household items regularly, to bring them a reality check.

3. Practice tough love

We all know as parents it is sometimes easier to just say ‘yes’… But, for kids to learn about saving, avoid an ‘open wallet’ policy. Set your guidelines and stick to them. If they want something they’ll have to save up for it, don’t dive in and buy it for them for short term fulfilment – it’ll save you money in the long run, I promise!

4. Reward good behaviour

In the real world, you work for your money, so give your kids a chance to make money themselves. Encourage them to do chores to help you out and then you can reward them with extra pocket money.

5. Set goals

Finally, help them set savings goals. Create a savings chart and encourage them to put aside a set amount of cash each week towards an end goal – maybe to buy a new bike or new phone. They’ll feel a great sense of achievement when they’ve reached their goal, and will appreciate their new purchase even more.