The first time with pocket money

We did it!

After all the talking about it, we finally put our research into practice and started paying pocket money to our 3 going on 4 year old boy. As we discuss in a previous post, financial habits are already formed by the age of 7, hence the importance of introducing financial responsibility to kids at an early age.

We chose to start with £3 per week as the general consensus seems to be £1 for each year of life.  We also checked our HootLoot's Pocket Money Infographic for a quick peer comparison to make sure he is not going to be the wealthiest or the poorest kid on the block.


We gave the £3 in 10s and 20s to maximise the sensorial experience and encourage play, because play is the way children navigate the world. He was very happy with stacking the coins up, counting them, rolling them on the floor, hiding them from his little sister trying to put them in her mouth. And boy was he surprised when we told him that from now on he will have his own money to buy the things he likes.

After a good half hour we pulled out two old peanut butter jars (do you see the recycling opportunities here?!), each one with a label. We made a “SAVE” jar and a “SPEND” jar and explained that the SPEND jar will contain the coins for him to spend this week, whilst the SAVE jar will keep on being filled and when full, he will be able to buy a BIG toy. 

Oblivious to the complexity of financial matters where strong forces of ambition, power, greed, social recognition are at play, he announced he would save to buy "another toy car".

He loved putting the coins in the two jars, pulling them out and counting them, changing the proportion of coins in the jar, shaking them to hear the rattle. In the end there was about £1.10 in the spend jar and £1.90 in the SAVE jar. We asked him to think about things he would like to buy with the money and he came up with a pretty standard list that we are sure every 3 year old would approve: Chocolate, toy cars, a BIG toy car.

The rest of the day was spent in the excitement of going to the shop to spend some of the money and buy chocolate.

After a good lunch (who wants to take hungry children to buy sweets??) we all set off to the corner shop, with Number 1 proudly carrying his SPEND jar on his scooter.

I bet everyone can imagine the excitement of going through all the junk packets of sweets, pulling them off the shelves and asking a very puzzled man behind the counter for their price.

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Daddy helped with the maths in explaining what could be bought with a maximum of £1.10 and after a lot of questions and careful analysis of lot of packets , Boy listened to Daddy's advice and got a large pack of Cadbury's chocolate buttons for £1 versus the small tiny packets for 60p.

We handed the coins to the cashier and off we went, out in the world with a giant pack of chocolate buttons. It could be every mum's worse nightmare watching her son destroy all the efforts of a day of healthy eating in a binge of chocolate feast, however we have decided to relax our standards for the greater goal. We hope that being responsible for their decisions will truly transform our kids in more financially savvy adults.

In the end the chocolate feast wasn't so bad. Number 1 obviously ate a lot of buttons, but not as many as we were prepared for. He was happy to share a good amount with us and his sister and stopped short of half the pack, giving the rest to daddy to keep safe.

After half hour everyone had forgotten about the left overs and only few days later we reminded him he still had some to eat.

To our surprise, two weeks down the line, he hasn't yet asked to go and buy more chocolate, even after his second round of pocket money was paid. However he has been getting excited at the money growing in his SAVE jar and keeps on repeating that he wants to buy a BIG toy. Maybe this is the right way to encourage children to delay the gratification of spending and save for a greater goal. We will see how the next few months play out.

The jars are up on the kitchen shelf, doubling up as musical instruments because of all the amazing rattling sounds the coins make if shaken.

Chapter One of the road to financial responsibility seemed to have been successful and provided a lot of educational family fun.



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