5 Ways Pocket Money Teaches Independence


Ahhh pocket money, every child’s dream and many parent’s nightmare.

It feels like there continue to be so many questions on the subject.

How much? How often? Is it spoiling children or does pocket money teach independence?

Well, I don’t think there’s one correct answer but according to the ING International Survey ‘children that receive pocket money are less likely to be in debt’.

One thing is clear from this and from listening to a number of experts on the subject – pocket money is beneficial when administered correctly as it teaches children money management skills.

Along with this crucial life skill it also brings together many other aspects of life to create independence in children and teenagers.

Imagine this one simple scenario. 

Your child turns 18 having never received any money in their life. Suddenly, they have a bank account with income and expenses, how do you think they’ll get on having no experience in managing money?

With that question fresh in your mind. Let’s look at how pocket money teaches independence. 

pocket money teaches independence

How Pocket Money Teaches Independence

Learn How to Budget

From day 1 of receiving pocket money, children start to learn the concept of a budget. Of course, it will take a while to learn how to budget effectively. In fact, many of us (including myself…) struggle to stick to a budget as an adult, but it’s still a vital lesson to learn early in life.

You might find that your child quickly goes out and spends all their money on the first thing they see. Only to be left frustrated later in the week or month when they have no pocket money left. Resist the urge to ‘top up’ the allowance or buy items for them, this is an important part of learning how to budget your money to last over a time period.

It’s a lot like learning not to blow your whole paycheck as soon as you get it!

As children get older you might well increase their allowance. When you do this you could reduce the number of items you purchase for them such as clothes or shoes. This will help teenagers to learn further about budgeting for more important purchases throughout the month.

Learn How to Save

Saving money is rarely fun. Certainly, when I was young it was never a priority and took me a long time to develop the patience to save up money for a more expensive item. 

My mom spent hours teaching me the concepts and skills behind saving money which now make it much easier in later life. 

Sometimes, I think she went too far and now I’m riddled with guilt when spending money! But hey, my bank balance looks better.

Once the concept of budgeting is understood, the ability to save becomes another brilliant independent benefit of pocket money. When children want to buy something more expensive than their allowance affords they must save money. 

You can leave the decision of how to do that up to your child. You could suggest the idea of saving a little bit of their money each week or save all of their allowance each week to hit the target quicker. This adds the independence to make money choices themselves to learn further about managing money.

If you want some more information on how to teach your kids to save money then take a look at these fab resources:

independent child

Give Children the Freedom to Make Choices

Money management is about understanding how money works, making decisions and how that affects the future.

As with giving children the ability to choose how they save their money, allowing children to freely make choices about their money is another step into independence. 

Try not to restrict or tell children what they can and can’t spend their money on. Leave them the freedom to make their own choices. Of course, you can nudge them in the right direction. 

More importantly, take the time to teach them along the way, praise the good choices and help them learn from any mistakes and failures in their money management. 

Provides Freedom in Teenagers

pocket money to ride the bus

Teenagers want freedom and autonomy. Unfortunately, they want parents to ‘butt out’ and leave them to get on with life.

While that might be scary, pocket money helps add freedom to go out into the world. They can be left to spend their money on hobbies, going to the movies with friends, starting a little business or saving for the future.

One massive point is the independence of being out and about on their own. Having some money enables them to get around without relying on parents. If budgeting is done correctly, you can have them riding the bus or train to meet friends rather than being chauffeured everywhere.

Plus, in an emergency they have some money to help out! 

Teaches the Value of Money

The value of money brings us full circle from the starting question. How will a child get on when they’re an adult managing money?

Well, understanding the value of money and that it doesn’t just grow on trees is imperative. 

We’ve already seen how pocket money teaches independence in children but it also does the same once you reach adulthood. 

As we learnt earlier, receiving pocket money at a young age leads to less debt as an adult. 

So with better money management skills in later life there is more self-reliance and hopefully no calls to the bank of mom and dad to help make rent.

And that is independence.

Final Words: Pocket Money Teaches Independence

It’s clear that pocket money develops a number of important life skills in children.

That being said, it’s important to go about it in the right way. 

When it comes to creating independence, don’t go overboard and give too much money. To learn budgeting, saving and money management there must be a restriction on the amount. 

Too much money could very quickly lead to laziness and over dependence on you. If children want more money then they must learn to save or take on a part-time job/chores to earn money. Or even better, get entrepreneurial and work out a way to multiply their money with business projects. (The obvious ones being lemonade stands or car washing.)

If you’re not sure how much money to give then consider your child’s wish list. How long does it take for them to save up for the cheapest items on their list ( apart from candy.) If it takes them a few weeks, 2 or 3 rounds of pocket money for a new game or toy then you’re probably on the right track. If it’s something more like an iPhone or computer then this should be a longer term saving plan to get to the big life purchases.

Finally, don’t think that you are spoiling your children by giving them an allowance. Treat it as a vital learning experience. Many of us as adults don’t understand the real concepts of money or are poor and managing it. Perhaps because it is not a subject taught in school! So take it as a learning opportunity not just a treat.

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