Westpac has been asking interesting questions about children and money. The bank's Money and Kids Report provides insight to the link between pocket money and financial awareness. We think it's important that kids (and once-were kids) make the connection between work, income, saving, and investment early in their lives - and the sooner the better.
For children "work" comes in the form of "chores". Westpac found those chores took on average 2.4 hours a week, typically on things like: looking after family members (babysitting), cleaning their bedroom (isn't it amazing how quickly it becomes messy again?), washing the car, mowing lawns, feeding pets, doing laundry, dishes and taking out the rubbish (it was pleasing to see that chimney sweeping was no longer a common chore). Most started doing chores at 6 years old.
The report says, "Pocket money for most families starts when a child is 6 years old and is usually up to $10 until 12 years old; 13-15-year-olds, on average, get $11 to $20". We can just see it now - protest marches through the house with placards demanding a minimum living wage.
There is no doubt that people who save in childhood are much more likely to save as adults and become mortgage-free.
We think there is more to teaching good money skills than just focusing on child chores, and that was one of the report's key messages: if parents want to teach their kids good money habits, they need to give them pocket money, and need to teach them how to save it. Here are some oily rag suggestions: