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The following Q&As provide some suggestions and guidance on how to hand out pocket money, whatever your financial circumstances.

Q: My son is only six. Do I need to give him pocket money?

A: Perhaps he doesn't have his own money yet, but he probably knows you take out money from an ATM or buy things with a credit card. But he may not be aware this money comes from all your hard work. It's a good idea to tell him about this and the importance of money. To understand more, you may want to try giving him pocket money as a family activity. For example, you could sit down together and set a budget for his pocket money. This can help him learn a few facts about money management.

Q: At what age should I give my child pocket money?

A: There is no fixed age, but you could decide according to their ability and attitude towards money. When you note one of the following signs, you can start giving your child pocket money:

  • They start asking you where money comes from.
  • They have a basic understanding of money, such as what it's used for.
  • They have learned about coins and notes.
  • They need to spend money in their everyday life.

Q: How much pocket money should I give my daughter?

A: You can decide how much to give according to your family finances. There is no need to compare the amount with other families. You should first lay down some rules with your daughter. When determining an amount, consider how you want her to use the allowance. Include enough for essential expenses, some for personal spending and a certain amount to save each week. You could also ask her to set aside an amount each week for donations.

Pocket money = Essential expenses and personal spending + savings + donations

Q: What expenses should pocket money cover?

A: You can plan this with your children. Offer guidance as they decide how to use their pocket money.

  • Essential expenses: Let them pay for their own bus fare, breakfast and so on, so they understand how important money is for the basic necessities of life.
  • Savings: Ensure your children understand the importance of saving. Encourage them to first set aside some of their pocket money for savings. Explain this can be used to achieve goals.
  • Spending: After setting aside enough for essential expenses and savings, they could use the remainder for personal spending. Explain that having pocket money does not mean they should immediately satisfy their urge to buy things. Rather, it's best to think twice about what they need and what they want – and learn the difference.
  • Donations: Nurture empathy in your children so they understand how other people feel, especially the less fortunate. Tell them they can help those in need by volunteering or donating second-hand toys. You could also encourage them to donate some of their pocket money.

Q: Anxious about bad spending habits?

A: Practice is essential to your child as they learn about money management, so it's important to let them make decisions. Your role as a parent is to monitor their behaviour and offer guidance. If you think your child's spending is inappropriate, immediately correct this. Let your child learn from their mistakes. If you are still worried, then adopt a step-by-step approach. Consider the amount of pocket money they get, or assist them on a daily basis until they form responsible spending habits.

The five principles for teaching good pocket money habits

  1. Explain clearly the purpose of pocket money.
  2. Stick to your principles, including the following: 
    • Give pocket money according to a regular schedule. Do not casually offer an extra amount.
    • Give pocket money every day, week or month, according to the individual circumstances.
    • Lay down rules to prevent inappropriate spending.
  3. Young children can use piggy banks or money boxes for their savings. Older children can do the same with a bank account.
  4. If your child has an Octopus card, do not use the auto value-adding service on it. Let them add value themselves, using cash from their pocket money.
  5. Help them keep a record of income and expenses, using a notebook or a mobile phone app.

Proper money management concepts learned early are for life

If your child is a junior primary school student

  • Explain to your child that expenses should not exceed income
  • Make clear that we all have a limited amount of money, so we cannot have everything we want
  • Suggest that for a better future, we should delay gratification

If your child is a senior primary school student

  • Be aware that children are easily affected by peer pressure and commercials, so you should offer plenty of guidance
  • Money is important, but is not a source of happiness. Explain that family and friends are the greatest sources of happiness. Show your child that nature, music, art, charity and many other important things in life can be enjoyed at little cost