Personal responsibility Stress-free pocket money

When children get pocket money, this leads to discussions at the dinner table. How does your child learn how to handle money?

You’ve talked about the pros and cons of pocket money for a long time as a family. Perhaps your kids now get a specific amount on a regular basis. But that doesn’t necessarily mean the end of the discussions. When you give your child pocket money, you also give them the freedom to buy what they want. And your child will certainly have their own, sometimes incomprehensible ideas about what they want to buy – that’s normal! As parents, perhaps you want your child to save a little instead of frittering it all away at the local convenience store. Talk about it with them – without imposing bans. Perhaps you could split their weekly or monthly pocket money up so they get one 1-franc coin and two 2-franc coins, instead of a single 5-franc coin. This way, your child could put two coins in their wallet and the third in their piggy bank.

Once the pocket money is spent, should you give them more?

With all of the candy and colorful toys specifically aimed at children, the temptation to spend all their money at once is high. If they don’t put some of their pocket money aside and forgo the odd toy or candy bar, they’ll run out of money fast. In this case, it might seem obvious to your child just to ask for more money. Or maybe an advance? Don’t be afraid to say no: you’ll be doing your child a favor if you stand firm. After all, later on in life their first salary won't be enough for everything they want either. And as adults they won’t be able to get an advance before the end of the month. Because pocket money is not meant to be for essential things, there’s no harm in your child having to wait for their next installment. You should however speak to them about why they’ve run out of pocket money. That way your child will have the opportunity to learn what they did wrong and do better next month.

Taking pocket money away as a punishment?

You tell your child they won’t get any pocket money unless they clean their room. Is that really a good idea? The point of pocket money is for your child to learn how to handle money by allowing them to choose how to spend it. This prepares them for their first “Jugendlohn” or apprenticeship wage. If you stop their pocket money, you’re interfering in this learning process, which defeats the object of the exercise. Instead, you should put another measure in place that is more directly linked to your child having broken a rule.

The highlights in a nutshell

  • Don’t give your child any extra pocket money if they run out before the end of the month. Non-essential things can wait until next month.
  • Don’t use pocket money as a way to punish your child. Otherwise they won’t learn how to handle money properly and the idea of pocket money loses its purpose.
  • Your child’s pocket money is theirs and they can do what they want with it within reason.
  • Start with small amounts paid relatively frequently (weekly).
  • Give your child pocket money on a regular basis and unsolicited. This way your child will learn how to plan.
  • A “Jugendlohn” is a sensible alternative for children over 12 years old.

UBS’s educational principles

This article was written in collaboration with educator Marianne Heller, who has years of experience in teaching financial education and debt prevention programs for children and young people.

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