New research shows that Aussie kids are raking in, on average, $750 a year in pocket money – and it’s something that can lay a foundation for lifelong financial literacy skills.
The research, commissioned by banking leader ING shows:
- Nearly six in 10 parents (57 per cent) pay their kids pocket money, with kids receiving an average of $14.40 per week.
- Most parents (73 per cent) say their children must earn their pocket money by doing chores.
- Earning pocket money is perhaps having a lifelong impact on Aussies with the overwhelming majority (83 per cent) saying their parents taught them how to save.
- The research suggests there’s a correlation between a child’s age and how much pocket money they’re given, with the average weekly
- five-seven-years-old: average $6.50/week
- eight-10: average $10.30/week
- 11-15: average $15.60/week
- 16-18: average $22.70/week
Practical pocket money tips for parents
Head of Consumer and Market Insights and spokesperson ING, Matt Bowen, told EducationDaily that there are some practical tips for parents to help teach their kids important financial lessons that can take them into adulthood.
One of the most important ways to teach young people about money management, he says, is simply to have open conversations about your own.
“Pocket money is a great way to get your kids comfortable talking about money. It’s still taboo for many people, but we know that future generations can learn so much from our own life and money experiences – the good, the bad and the ugly,” Bowen told EducationDaily.
‘One of the benefits of a digital economy is the speed and transparency of our spending and savings behaviour. By introducing basic concepts of budgeting and spending limits at a young age, you could put them in good stead in preventing impulsiveness and overspending as they grow up.”
Digital games can have a positive influence
Bowen says “gamifying” pocket money can make learning much more fun and interesting at a young age.
“Research we conducted in June this year showed almost two in five Aussie gamers said digital games positively influenced their current saving habits,” Bowen says.
“The research also suggested young Aussies are seeing and experiencing educational benefits from digital gaming, with 71 per cent of Gen Z Aussies saying they would be more inclined to allow their child to play a digital game if it had a financial education element, so using games to teach school-aged kids the concept of money could be something for schools to consider in the future.
“There are other real-world opportunities too, like starting a part-time job, that could help teach kids the value
of money, however, it’s important to talk to your family and kids about what is right for them. It’s never too late to start having conversations around money and learning smart savings habits.”
Basic concepts of budgeting are about patience
In a world where most things are a tap or a click away,” Bowen told EducationDaily that it’s “important to teach kids to hold off and save for what they want. By introducing basic concepts of budgeting and spending limits at a young age”,
“Our research has shown it may help put them in good stead in preventing impulsiveness and overspending
as they grow up,” he says.
“Pocket money may be a great way to introduce these foundational concepts. Letting our kids have some freedom and independence in how they earn, lose or spend their pocket money, in a fun environment can teach them valuable money skills for the future.
“Don’t be afraid to let them make mistakes! Letting them splurge it all on a fad may not be how you’d like them to spend their hard-earned savings, but it’s important they learn that money comes and goes and that some money decisions might feel better than others.”
