Pocket Money

Spriggy's 5 Pocket Money Pillars

Spriggy Money Guide

Teach your kids how to earn, save, spend, give and invest responsibly with pocket money.

Pocket money is more than just chores charts or cash handouts. Giving your kids structured pocket money payments is a great way to kick-start their financial education. It’s the perfect tool for kids to learn fundamental financial skills practically.

1. Learn to Earn

How do you teach kids where money comes from? Let them earn some of their own.

Pocket money introduces kids to the concept of ‘income’ and gives them the tools to start practicing basic financial principles for themselves.

Once they have their own money, they can choose how to spend it. With regular pocket money payments you can introduce them to concepts like budgeting to show them how to make their money last, just like having a salary in the real world.

Setting kids weekly jobs with financial incentives is a great way to teach them the value of hard work - the more they do, the more money they’ll earn.

There are a few different ways you can use jobs around the house to teach your kids about earning. You could pay a set amount per job, use their completed jobs to unlock their allowance or give them a set of core jobs and the opportunity to earn a little more with extra jobs.

Giving kids the ability to earn their own money will remind them that money isn’t infinite. Introducing paid jobs is a great way for them to understand that money doesn’t grow on trees - it takes time and effort to build up their balance.

As they grow up, they will use the money they’ve earned to make their own decisions and build financial skills around earning, spending, saving, giving and investing.

Sounds just like the real world right? That’s the point.

Try this example:

Pocket Money - how much should you give them?

• You could pay 8 year old Max $8 a week
($1 for each year he is old)

Jobs - they can earn more by helping around the house.

• Max earns $0.10 every time he empties the dishwasher
• Max earns $0.10 every time he makes his bed
• Max earns $0.20 when he takes the bins out

Why it’s a great lesson:
It’ll help you out, give them the opportunity to build on their earnings and teach them to be responsible around the house too. Win, win, win!

2. Save some for later

The kids have started earning their own money, so now they need to decide what to do with it! It might be hard for them to resist the temptation to spend it all at once, that’s why it’s important to teach them the value of saving when they’re young, so they can build good financial habits for their future.

By saving, kids will learn that putting money aside means there is more for later. To do this they’ll need to plan and exercise self-control, then they can experience the rewards of delayed gratification.

Savings goals help us to prioritise our needs vs our wants, but sticking to them can be tricky so it’s important we introduce the concept to our kids early on.

By contributing to savings goals, kids are modelling the behaviour of financial decisions we make as adults, like saving up for a house deposit, putting money into investments and setting money aside for retirement - (plus all the extras that we have to save for the kids birthdays and holidays!). If the kids make their own goals and stick to them, there is a greater chance that they’ll have good savings habits in the future.

The goal here is for kids to learn that small sacrifices now can mean bigger rewards later. So start by setting small achievable goals to help them understand how putting a little bit of money aside now can help buy bigger things later.

Try this example:

Help them structure their savings goals:

Max gets $8 a week, plus $4 if he completes all his chores, a total of $12.
• Save 50%: If Max saves $6 a week for 4 weeks, he’ll have $24, enough to buy that football he keeps asking you for!
• Spend 50%: Plus he still has $6 of his own money to spend each week.

Why it’s a great lesson:
4 weeks is short enough for Max to feel like his goal is attainable. The football he wants is a valuable reward so he’ll remember how good it feels to reach his goal and be able to buy it with his own money.

Teaching Max about delayed gratification - done (well not quite, but we’re well on our way).

3. Spend responsibly

Living in an increasingly cashless world makes it hard to teach kids about spending when they’re young. Using coins to show kids how to spend responsibly seems pretty outdated now, doesn’t it?  

Kids learn by doing, so why not give them digital tools to learn how to spend? By using a prepaid card and app to make purchases and track spending, they can start to learn how to manage their money independently.

Having control of their money allows kids to understand the principles of earnings and spending. Having a limited amount of money means they need to make trade-offs on how to spend their money. These concepts are harder to grasp when there is no physical money changing hands. By using a card to make POS purchases and checking their balance using an app like Spriggy, they’ll learn how to keep on top of their spending.

Kids will need to learn to say no, and overcome the temptation to overspend on their card, especially with cashless and online purchases. By giving kids independence with their spending, they’ll learn how to use different payment options like pay wave and online purchases, which they’ll continue to use throughout adulthood.

Making mistakes is part of growing up, we’ve all made plenty and have (hopefully) learnt valuable lessons along the way. Better they learn at 8, than 28!

Try this example:

Put the kids in charge of the weekly shop

1. Give them a budget
2. Ask them to write a list, working out costs to stay within the budget
3. Take them shopping and see if they can stick to it!

Why it’s a great lesson:
Giving your kids independence with money will allow them to make their own decisions, and mistakes, which can help to build good money habits for the future.

It sounds scary, but trust us, it’s a great lesson for them to learn.

4. Give a little bit

An important part of having money is sharing it with those in need. Teach your kids about kindness and generosity by encouraging them to give a small portion of their money to a good cause.

By giving, kids will learn about inequality and become aware of charitable causes seeking support from those in more fortunate positions. Setting money aside to spend on other people is also an important lesson, like saving up to buy someone a present.

Try these examples:

To introduce the concept of giving, gift a present:

1. Set a savings goal in the run up to a family members birthday
2. Work out how much they need to put aside each week, with a budget for the present
3. Watch them give a little bit of their money each week
4. When they’ve reached their goal, they can buy the present and experience how it feels positive to give to others, teaching them about generosity.

To improve their understanding of giving, give to charity:

1. Help your kids choose a charity for a cause they care about
2. Set a $10 goal as a donation to the charity
3. Get them to add $1 each week and watch their goal grow
4. When they reach their goal, they can give their money to charity. They will have completed a selfless positive act, this will teach them that giving feels good, and they can use their money to make the world a better place.

Why it’s a great lesson:
This is a valuable way to teach your kids about empathy, it’ll help them be open minded and learn to be grateful for what they have.

5. Invest and watch it grow

First things first, what is investing?! Investing is putting money into an asset with the expectation that its value will usually increase over time.

Investing for your kids is one of the best ways you can set them up for a bright future. The money you invest for them now can go towards further education, an emergency fund, their first car or house deposit.

It’s important for kids to learn about finance when they’re young so they could build skills for the future. By investing for your kids, you could get them interested in money from a young age and as they get older, help their knowledge grow by introducing more complex financial concepts like compound growth.

Compound growth is when investments make gains over time, those gains together with the original investment earn additional gains and continue to do so. The beauty of investing for your kids when they’re young is that time is on their side, so compounding growth can really work its magic!

Try this example:
Start investing for your kids to set them up for a bright future.

Why it’s a great lesson:
You don’t have to start with much, but if you begin to invest a little and often, you could watch their money grow as they do. Then, when the time comes, you can give them the boost they need to become financially independent or the freedom to follow their passion.

Prevent the pester

Want to know our secret? This one’s a bonus...

Try this example:
If they’re nagging you for something they really don’t need, tell them they can spend their own money on it if they really want to buy it.

Why it’s a great lesson:
When it’s their own money, they’ll think twice about what they’re spending it on.

Teach your kids how to earn, save and spend responsibly with their own Spriggy account!

So we’ve done our research, and we’ve asked parents what they need to help teach their kids about money.

We took on your responses, combined them with our findings and created Spriggy! A tool for you to teach your kids how to earn, spend, save, give and invest responsibly. It gives them independence to start making their own decisions and gives you the control to guide them on their money learning journey.

We’ve made it fun for them, and easy for you, so your kids can build the financial skills they’ll need for the future.

“Love the scheduled top ups as it means I can set and forget.”

Jane, Mother of two.

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