Pocket Money for 4 and 6 year old

System

I am a firm believer that it is never to early to introduce your children to cash (as long as they are old enough not to try and eat it!!). I am following the example set by my grampy who used to put a penny in a money box for me every week (that was an old penny) take me to the building society every few months with the coins from the box and help me pay them them into an account he had opened for me. I don't know how old I was when this started, but I remembered being lifted on to the counter to watch while the counter clerk wrote in the passbook!


When our son was born we were given money for him from various family members so we opened a "limited access" child savings account with a good interest rate (remember them?!) in his name and paid any birthday / Christmas / occasional money into it. His first visit to the building society was at nine days old and weirdly, he doesn't remember it!!!!


When he was about three, we explained that if he let the building society look after his money, he would get paid for letting them look after it and they would keep all of the money safe for him until he was older. He would hand the money over himself (the low counter for disabled customers was perfect for that) and would ask them to grow his money for him!!! That year, Father Christmas brought him a toy cash register and some play money (sterling and euros!!). It was a favourite toy for quite a few years and one he still won't let me take to the boot sale!!


We continued to pay gifts of cheques and paper money into that account (without his knowledge) and opened another account for him when he was about six, so that he could pay coins into it and withdraw money if he wanted to. His grandpa would occasionally give him 50p or £1 and we would usually match that, or perhaps give him some money for tidying his room or helping us. He enjoyed looking at his building society book, especially when interest was added (like mother like son!!)


We did not start giving him formal pocket money until he was about 9 years old. We gave him £5 per month and were very clear on the conditions of receiving that money eg keep room tidy, do homework, help around the house and, most importantly, write all income and expenses in a cash book and pay any left over money into the building society at the end of each month!! The latter two were something I was encouraged to do as a child and it has stood me in good stead as an adult (thank goodness for Excel!!!). If he didn't follow the pocket money rules, he got less pocket money the following month.


We have increased his pocket money annually, and as he has now hit his teens, we have made clear what he needs to start saving for and paying for and what we will continue to pay for. When he started secondary school we put the savings into his sole name and kept the book out of his way for a bit as it had a good amount of money in it (!). He opened a FlexOne account with Nationwide alongside a Flex Regular Saver and then we gave him access to the savings account and he then drip-fed the money from there into his new regular savings account (he was only able to pay in a maximum of £100). He opted for a debit card with the FlexSaver as he decided that a cash card would provide him with £10 notes, which, when broken, would be a pocket full of change to be frittered, whereas with a debit card he would pay the exact amount and not have a pocket full of tempting change. Two years on and he has had a few blips regarding his spending which were very nasty surprises but seem to have taught him a lesson or two. He also learned a new word - "profligate"!! He is doing his best, but lately he has been going into town with his school friends and it seems that a most of them have considerably more money to spend than he does (probably because most of them seem to have lots of aunts and uncles and a full set of grandparents which he unfortunately our son does not have. Saturday jobs seem to be non-existent locally for 13 year olds and whilst he does a bit of gardening for our neighbour, and is looking for odd jobs to do for other neighbours, but the weather has been atrocious of late. I'm not sure what do now as I don't think a substantial increase in pocket money is a good move at this age, although we are going to have a clear-out at home soon, and I would be happy to let him have the proceeds of any sales we make if he puts his back into it.


That was rather long-winded, and only the first bit is relevant to pocket money for young children, but I hope it helps someone with the pocket money dilemma.