Two pounds and fifty pence. It went up to £3 when I was twelve years old. You already know I’m referencing something that formed the introduction to financial planning for most of us in the 80’s and 90’s – pocket money.
And yes, I started at half of a five pound note (which is how I saw it) and although it doesn’t sound like a lot, this was a huge amount for a kid in the early 90’s. Most other kids in my class were lucky, LUCKY, to see a pound every week.
Fast forward 30 years, and like most adolescent challenges, I now see things from the other side of the fence. As a kid, nothing was ever enough, as an adult, every penny is one too many. So imagine my shock when my 7 year old daughter came home from a birthday party recently announcing that her other friends were buying their own presents with their own cards while they were in town.
Surely not? Surely kids who’re only just starting Year 2 aren’t planning their next expidition to Smyths at the weekend with cash that’s their own? Well no, I was wrong. Kids this young DO have access to cash, and they are getting pocket money, and they are choosing what to spend it on, and they do it all on a VISA card with their own name printed on it.
Going back to my own childhood spending, I remember being pretty thrifty at around age 10, which is the ripened age that I was first ‘earning’ my own cash. I did a bad job of the washing up and ‘helped’ my dad with the sunday car detailing, all so I’d be afforded my £2.50 on a Friday. There was a weekly debate over how well I’d maintained the cleanliness of my bedroom, and plenty of protestations on my part, but on the whole I always managed my weekly reward.
My first shopping trip I had saved nearly £6, and boy oh boy was it burning a hole in my pocket. I had daydream fantasies of a huge spend-up, coming home on the bus with armfuls of ‘stuff’, none of which was planned, and having eaten a full mcdonalds during the day trip for sustinence.
Reality was different – a box of Nerds and the latest Take That song on CD single. One tiny plastic bag from Woolworths was my eventual reward, and my friends all had similar dream vs. reality experiences.
At age 13 I started working as a waitress during odd evenings and weekends, all because I understood from my parents teachings that, if I really wanted that big spend up one day, I’d have to work hard to make it happen myself. Long shifts running around serving wedding guests their beef earned me a whole £3.50 PER HOUR – and after a week grabbing 2 or three shifts sometimes I was lucky enough to have £50 in the bank. Yes, it was small fry and I now know that my GCSEs suffered as a result, but I was earning and learning, and every penny that entered my bank account was mine and mine alone….after I’d paid for cigarettes (money is the gateway drug to many addictions – a problem for another time).
But the world is different now, whether I like it or not. Kids don’t have access to coins and notes like we did as children, so their understanding of financial responsibility can become quite fractured and unrealistic if it’s not managed well. Even without pocket money the digital world has made it possible to spend money that’s virtual to them but very real to us parents and guardians. Buying things like my Take That single wouldn’t involve touching or even seeing real cash nowadays – they ask for a song, and if we have the money they can own it and hear it instantly. Who cares how it happened and where the cash came from? What’s important to them has been achieved – instant digital gratification. If I’m not careful, I’ll end up with a kid who expects everything yesterday without any cost to her, without ever earning it, and she’ll believe we’re the enemy when we don’t fulfil her financial needs.
I don’t want to breed another brat.
This got me thinking about a number of things. First, where do I start with my own kids pocket money journey? Is this something we hold off on until she’s pushing for it to happen, or do we simply hop on the bandwagon now before she starts nagging incessently because she’s the odd one out? Second, how do we pick an amount? What feels appropriate while balancing the national economic turmoil and personal household figures? Third, how do I set this up? How do I get a card for my 7 year old so she can spend like she’s Paris Hilton on her third bottle of Cristall? Fourth (critical) how will she earn the money?Finally, how do I manage the impact of all this on our financial strain and mental health? While it sounds like something trivial, every penny counts, but the equilibrium of happiness in our home does too.
After talking with my partner and in an effort to keep up with the Joneses at school. we agreed to allow pocket money become a ‘thing’, but we’ve made changes to how it’ll work compared with how our parents ran things.
First, the amount is relatively fluid, but capped at £5 per week (lower than the inflation rise compared with my earnings in 1991). She has to truly earn the money doing schoolwork first, taking time to practice reading and maths at home too, and helping out with simple daily tasks like tidying her room and putting away her cutlery and crockery after breakfast.
We chose the child-friendly banking system offered through Natwest – Rooster – because it’s popular with other families we know. She doesn’t see the money IRL, but she does see a balance that changes as she works and / or spends. There will be no ‘hidden extras’ such as downloads – if she wants something that costs money, it has to come from her card, whether its virtual or real.
I felt like we had it all sussed and sorted until we told her and I realised the mountain to climb that we’d created, and it’s partly created through the mainstream schooling system. It’s actually one of the reasons why I believe good financial planning should form part of the curriculum, and from a young age too.
Peer pressue is incredibly real and probably even heavier today than it was in my adolesence, and that pressure transfers quickly to us parents who are trying to keep our kids happy, keep our finances stable, and make sure everyone has what they need. Unfortunately the want/need list tends to adjust from parent to child, which only leads to frustration and differences of opinion over where money is best spent.
While I want her to be financially responsible over her pocket money, I don’t want her to start worrying about our financial pressures, which should never be the concern of a 7 year old. This is one of the reasons that giving her full autonomy over her cash felt safest – as long as it’s her money (and the purchase is age appropriate) we won’t argue. If it’s a large product, she’ll be saving all year…and i’ll be really proud to see her show some restraint in this way.
Anyway, fast forward to last week, her card had arrived in the post and we’d loaded it with her first few weeks of pocket money. We told her early so she’d have to exercise restraint instantly – she’d have no way of satisfying the itch until the card arrived and that was completely out of our hands.
She planned the expected trip to Smyths with her dad and we both expected lots of arguing over what she could and couldn’t afford and hours wasted trying to make the cash go as far as possible. Imagine my shock once again when she not only spent less than half of what she had, but when her dad asked if she wanted more or to hold on the the remainder, she chose to save it for another day.
Hallejujah! We’ve raised a balanced and sensible offspring…so far!
There is a mental impact for me especially, because I manage the household finances and, like many of you, we’re feeling the pinch in a big way. Making ends meet is getting harder, and simple essentials like having the heating on in winter and a weekend chinese takeaway have become once-in-a-blue-moon-luxuries instead. But when I looked at it another way it became easier to reason with pocket money pressure. How much would I pay for her grades to improve? How much would I pay to keep her social interactions easy and stress-free? How much would I pay to make sure she understands money isn’t growing on the willow tree outside and earning is an important lesson?
In all cases I summised that £2.50 each a week – the cost of a bottle of Pepsi Max – is worthwhile. Although we now buy Lidls own brand Pepsi, and it’s nothing like the original.
I’ll keep you posted on the fallout of our pocket money exploits. If anyone out there has any advice, stories or info on the subject that they’d like to pass on, then please drop me an email.
Thanks for reading.
Creative Steph 