Pocket money a lesson in thrift

NZ Herald September 09, 2008

Just over half of parents give their children regular pocket money, and half want them to save some of it. The going average rate is $11 a month for young children and $25 for teenagers. The Kids and Pocket Money survey by AMP Financial Services (NZ) has found 90 per cent of parents gave their children money, and 56 per cent gave them a regular allowance. Of those who give them a regular income, one in two expected the children to save some of it.

Retirement Commissioner Diana Crossan said the parents who were paying pocket money were on the right track. “One of the best ways to teach kids valuable lessons about money is to give them hands-on experience of managing real money of their own. And the best way to do this is by teaching them to manage their pocket money.” Ms Crossan welcomed the fact that so many parents expected their children to save some of it. There were lots of ways of making saving fun for children of all ages, such as encouraging youngsters to save for things they wanted, she said.

The Colmar Brunton online survey of 500 parents found not everyone had the same ideas about children and money. Wellington parents were more likely to be relaxed about where the money went. More than half said their kids could spend it on whatever they wanted. And Auckland children were less likely than the national average to spend money on cellphones – a result that may surprise parents further down the country. The amount handed out by parents grew as children got older. The average rises from around $11 a month for 5- to 7-year-olds to around $25 a month for 14- to 16-year-olds.