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Topic # 204226 22-Sep-2016 11:56
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So my thoughts on pocket money are somewhat influenced by the way i was brought up. Pocket money was given each week, and chores were expected, but the two were not related. Chores were required to teach us to work hard, and pocket money was to teach us how to use money. Rarely was the opportunity to earn extra money given. We were encouraged to wash the neighbour's car etc. if we wanted some extra cash, and had paper runs.

 

I also remember my father ran a scheme where once we saved our first $50, he would give us $50. I was the first among my brothers to achieve this, and bought myself a stereo that was my pride and joy! I also remember saving $250 a few years later and buying myself a mountain bike, which was the continuation of a great love of biking (I just bought a new one the other day). Due to accidents and clumsiness, that bike must have cost more than that initial $250 many times over, as I was always breaking the thing and my parents would help pay for repairs, but I digress.

 

Another thing I remember my parents doing at their discretion was helping out when we wanted to buy something and it cost more than we had. The item would then be half ours and half "the family's". In fact that first stereo was purchased like this, as I think the thing was $180, and as it was more or less mine I think I got a pretty good deal!

 

 

 

Anyway now that I am a parent myself my approach is similar. I do not give pocket money in lieu of chores, but rather to encourage good money habits, and I have implemented the "save $50 and I will match it" policy. It seems my money is safe for now as the appeal of a new toy does seem to get them!

 

 

 

So my question is what are your thoughts regarding pocket money? How or why do you give it? Is it chores related, or tied to something else? Do you have any thoughts or insights about it being more than just giving them a few bucks every week for the sake of it?


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  Reply # 1638704 22-Sep-2016 11:58
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When I was a kid I got the money regardless. Emptying the dishwasher etc. was tied to being allowed to play games on the computer and other fun stuff; a "work before play" system.




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  Reply # 1638714 22-Sep-2016 12:26
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I remember that. Wasn't such a big deal after school as we typically had chores in the morning, but saturdays! Man that sucked... Especially when all the other kids in the neighbourhood didn't have to do them...


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  Reply # 1638721 22-Sep-2016 12:39
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Our kids (6/9) have only just realized the value of money recently so never hassled us for pocket money - thats now changed.

 

We're going to issue it via a "helping" and "doing as asked" method, but assign points to each item and when they hit a certain amount (lets say 20 points, most items being around 2 points), they'll get $5 and so on.

 

So things will be like getting ready for school (uniform/bag), putting dishes away, helping me bring some firewood up etc, nothing set in concrete as such but the more they help with, the more points they can earn.

 

And soon I'll be able to have dinner, and go relax while the minions run around doing the dishes and putting the rubbish out etc...... muahaha....





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  Reply # 1638726 22-Sep-2016 12:50
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We give the kids the same amount of pocket money as their age ($11 ea for our twin daughters). It's not tied to chores, which - as part of the family- they have anyway.

 

We talk to them about investing, compounding interest, and the value of money. Their pocket money's direct deposited weekly to their Kiwibank accounts.
When they have enough - $100 at a time - they can choose to 'lend' it back to us as a term deposit. We pay high interest, which they can leave with us (compound) or have paid to their accounts to spend.

 

Since we're rural they can have little businesses. One of our girls keeps chickens.
She pays their costs & food, we (sometimes our neighbours and friends) pay her for the eggs - at supermarket rates . She also must get out at daylight every day before school to feed/water them.

 

Our other daughter 'invested' $20 in a broken lawnmower. We fixed it together (another $30) and now we pay her to mow the lawns with it around our business (she pays the gas).

18 months ago they withdrew some of their money & arranged with their grandmas to go halves in ipods (as xmas presents)

 

We also 'give' them the money for their Kiwisaver deposits each year, and they deposit it.


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  Reply # 1638784 22-Sep-2016 14:51
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We run a similar system in our household - pocket money is separate from 'chores' around the house.  The kids are aware they can either spend or save their pocket money, and have the opportunity to do 'over and above' jobs to earn bonus dosh.  ('Chores' are just part of the day-to-day in the house).

 

Currently my 10yr old is a saver - loves watching the bank balance grow.  My 12yr old has traditionally been a spender - buying smaller items - but has seen a new bike he likes, so is now long-term saving towards this.  I think it's just about motivation with him.

 

We think it's a valuable skill to understand the value of money, and saving.  They get to choose what to do with it. 

 

We're doing the KiwiSaver thing for them also - but just an automatic payment.  They do get the account details email every month so are also able to watch the long term compounding effect.  I do like SideSteps method of getting them to deposit it though.

 

 


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  Reply # 1638794 22-Sep-2016 15:06
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I heard about an interesting idea somewhere, can't remember where.

 

The idea is that pocket money gets divided into thirds:

 

  • 1/3 goes towards saving
  • 1/3 goes towards household expenses
  • 1/3 is for spending

The savings should be long term savings and untouchable, bonus bonds, savings account, whatever as long as it isn't spent unless for a very very very good reason.

 

The portion for household expenses is to reinforce that stuff don't just magically appear. We are actually spending money we earned at countdown.

 

The spending money can be used however they like. So spend it every week or save up some for a short term goal.

 

 


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  Reply # 1638801 22-Sep-2016 15:18
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My upbringing was very much the same as OP. Chores expected (as demanded), but no real link to pocket money.

 

I've always imagined when I have kids I would apply a more 'real world' system, probably making them book hours on a timesheet, and pocket money tied to effort. In addition, regular performance reviews with the potential for a bonus.





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  Reply # 1638821 22-Sep-2016 15:51
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ajobbins:

 

My upbringing was very much the same as OP. Chores expected (as demanded), but no real link to pocket money.

 

I've always imagined when I have kids I would apply a more 'real world' system, probably making them book hours on a timesheet, and pocket money tied to effort. In addition, regular performance reviews with the potential for a bonus.

 

 

 

 

 

 

Haha book hours on a timesheet, your not a manager by chance are you? Make them pay a "Dad Tax' of 15% or will you pay them in shares or bonds lol

 

 

 

 


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  Reply # 1638827 22-Sep-2016 16:04
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BTR:

 

ajobbins:

 

My upbringing was very much the same as OP. Chores expected (as demanded), but no real link to pocket money.

 

I've always imagined when I have kids I would apply a more 'real world' system, probably making them book hours on a timesheet, and pocket money tied to effort. In addition, regular performance reviews with the potential for a bonus.

 

 

 Haha book hours on a timesheet, your not a manager by chance are you? Make them pay a "Dad Tax' of 15% or will you pay them in shares or bonds lol

 

 

 

I assumed that was said in jest!


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  Reply # 1638832 22-Sep-2016 16:07
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BTR:

 

ajobbins:

 

My upbringing was very much the same as OP. Chores expected (as demanded), but no real link to pocket money.

 

I've always imagined when I have kids I would apply a more 'real world' system, probably making them book hours on a timesheet, and pocket money tied to effort. In addition, regular performance reviews with the potential for a bonus.

 

 

your not a manager by chance are you?  

 

 

 

 

Worse. I'm a Project Manager





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  Reply # 1638839 22-Sep-2016 16:15
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Corny (but Serious) Comment: I love this thread - you guys really are great parents - and your kids are lucky.


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  Reply # 1638851 22-Sep-2016 16:19
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ajobbins:

 

BTR:

 

ajobbins:

 

My upbringing was very much the same as OP. Chores expected (as demanded), but no real link to pocket money.

 

I've always imagined when I have kids I would apply a more 'real world' system, probably making them book hours on a timesheet, and pocket money tied to effort. In addition, regular performance reviews with the potential for a bonus.

 

 

your not a manager by chance are you?  

 

 

 

 

Worse. I'm a Project Manager

 

 

So you're really not taking the p!ss?

 

And at what age would be suitable to start putting your kids through this rigmarole?

 

Pocket money is a tricky thing with kids - including deciding what age to start providing it - but I think this is just going too far. Sure, pocket money can be useful to teach the value of money and saving etc, but at the same time I don't think it's necessary to expose them to the kind of cr@p we have to deal with as adults such as (supposed) performance-based pay.

 

Some of the pleasure in being a kid is just that - avoiding some of the burdens of being an adult. My oldest (eight) said as much this morning to my youngest (five) - life just gets worse and more restricted the older one gets!


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  Reply # 1638873 22-Sep-2016 16:54
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jonathan18:

 

And at what age would be suitable to start putting your kids through this rigmarole?

 

 

We had the same dilemma, so like SideStep mentioned, we tied it to age ($1 increase per year, and paid it fortnightly) starting when eldest was about 7 (and 5yr old by default).

 

However - they really have only just (now 10 and 12) begun to fully understand, and have negotiated a monthly lump sum instead.

 

We've found that keeping track of the 'rules' as a parent is the most crucial thing - to make sure the younger child doesn't get more or less - as the kids minds are a lot sharper than ours at remembering!

 

(Then chuck in all the 'what age do they get a pocket knife / phone / bike' etc, and the 'extra 15 mins added to bedtime per year' - causes great discussions when you get it slightly wrong :-)

 

Cheers,  Greg.


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  Reply # 1638886 22-Sep-2016 17:12
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I like the idea of chores before fun, if you don't do one you can't enjoy the other. I hate the idea of 'earning' pocket money. I think it reduces everything to dollar signs and I'm very much against that. You should do what needs to be done because it needs to be done and you are part of a community, not because you will be given money for it. I have no problem with special projects being set up to enable a child to earn money for a big purchase, but I think this is something that both the child and parent should be involved in together, working towards a common goal and sharing the excitement as money towards that goal comes in.

 

 

 

 





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  Reply # 1638953 22-Sep-2016 19:29
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At my house when I was a kid books were always paid for on demand, other purchases were discussed, pocket money which was not regular was unrelated to any jobs which we did voluntarily, we had an interest paying bank account set up around 11 years old but no parent contributions to it. As a kid I collected bottles for refunds, graduated to baby sitting at 11 and a three day a week part time job after school Tuesday, Thursday, Saturday morning at age 13 then went on to other jobs forever after including during uni.

Worked for us but more financial literacy (not my parents fault, they didn't have the skills) would have been very valuable.

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