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The ability to manage one's own funds and entrepreneurship must be established from childhood. Financial literacy will now be taught at school: the National Bank has even developed a special program for this. But not only the school should take care of such issues. Parents can also do a lot with the help of a well-known tool - pocket money. And this does not mean funds that are given to the child randomly by all family members from grandmother to father, and bags with hryvnias that are not piled up during the holidays. And the sums that the child systematically receives from his parents every month and he can consistently calculate how to spend them and on what. And here there are many unclear or controversial questions for parents: what amount is better to give to a child, from what age, for what, how to influence the appropriate use of money, etc. In Ukraine, there are no clearly developed legislative norms or official recommendations in this regard.
But in Germany, for example, the law clearly regulates financial transactions that can be carried out by a child. There are also recommendations from the German Youth Institute, which has been dealing with the topic of pocket money for many years. And for us, these recommendations can also be useful.
First pocket money German experts recommend to give to children every week, starting at the age of six (well, or the age when the child goes to school), since younger children cannot yet plan and distribute them. Starting from the age of ten, it is worth giving funds for a month so that children learn long-term planning.
It is interesting that the recommendations for parents use the word "must" and not "can" or "want". That is, parents should give pocket money so that the child learns financial literacy. However, the law does not oblige them to do this. It is also interesting that the amount should increase every year on a certain day that the child knows about (for example, his birthday or Christmas). The amount of pocket money should not change suddenly or depend on the wishes of the child. That is, it is about a clear agreement between her and her parents.
The amount that parents allocate for pocket money does not play a decisive role. Instead, it is important to help the child develop consumer behavior and learn how to allocate funds for life. Still, the child should have the final say when deciding whether to make a particular expense or purchase. Yes, sometimes it will be difficult for parents. But the good news is that a bad investment usually has a positive learning effect.
Many parents believe that allocating pocket money to a child is possible only if the family has enough free funds that remain at the end of the month. It would be good if parents involved children in conversations about the financial situation of the family. Also, when you determine the amount of funds and teach the child to manage them, it is important for him to know your expense items. And not only because it is a role model. Well, agree, it is a strange situation when you refuse to buy a new toy for your child, saying "there is no money", but you go and buy groceries for dinner. That is, they still exist?
If children can already earn pocket money on their own, parents should stop giving it out. I would like to note that children in Germany can have a part-time job from the age of 14, and sometimes even from the age of 12. But experts recommend giving the child additional funds for certain items of expenses, with which he will independently pay for his regular needs: mobile phone top-up, clothes, travel or hygiene products. It would be good for her to have a bank card to pay bills online.
Of course, there are recommendations on how to teach a child to use pocket money.
- The main rule is that children should freely dispose of their money! Therefore, there should not be many of them.
- Pay regularly. Write down the date in your calendar.
- Pay regardless of the child's behavior. Do not increase or decrease due to good / bad behavior. Otherwise, the child will not be able to plan his expenses in the long term.
- Do not force her to use this money to buy something for the household. There may be additional funds for this.
- Make an agreement between all adults that there should be no unagreed contingencies. But ok, if it's for a holiday. Ok, if the child earned extra money from a neighbor.
- Children should not meet their needs with their own pocket money, i.e. buy clothes, food, school stationery. They have parents who provide them with everything they need.
And interesting. In Germany, children do not have the right to buy anything on their own until the age of seven. From seven to 18 years there are certain restrictions. So, for example, a child cannot pay for a purchase with his parents' bank card, but only with his personal one. According to the law, purchases of more than 50 euros must be made only in the presence of parents. The child will not be able to make online purchases or subscribe using his card to play, buy an app or a magazine. As you can see, the responsibility for a child's expenses lies not only with his parents, but also with other adults.
By the way, in Ukraine there is a children's bank (payment) card, where certain functions are disabled, and this allows you to use it safely. Parents can issue such a card starting from the age of six. In this case, the child's card will be linked to the account of one of the parents. Teenagers aged 14–18 can independently open a bank account in their name.
And where can children spend their pocket money? They usually buy sweets, toys, children's magazines. They can save something for a trip to the cinema or a gift. Nowadays, children actively contribute. Guess why? Because parents do it openly. That is, children can still imitate the financial habits of adults. Does your child buy things that are not allowed? Well, it sounds like your value of healthy eating hasn't become your child's value yet, and maybe it's worth talking about why you decided to give up certain foods at one time. However, remember that the topic of spending pocket money should not turn into manipulation, reproaches and control. It should be violated for educational purposes, and therefore, the child needs support and respect in the first steps towards financial literacy.
I almost forgot to answer an important question: how much pocket money should a child have? Based on the recommendations of the German Youth Institute, the amount depends on the age of the child. Here are the approximate calculations for families in Germany.
| the age of the child, years |
Recommended size pocket money |
| to 6 | 1-2 euros per week |
| 6 | €2-€2,50 per week |
| 7 | 2,50-3 euros per week |
| 8 | 3-3,50 euros per week |
| 9 | 3,50-4 euros per week |
| 10 | 20–22,50 euros per month |
| 11 | 22,50–25 euros per month |
| 12 | 25–27,50 euros per month |
| 13 | 27,50–30 euros per month |
| 14 | 30–40 euros per month |
| 15 | 40–50 euros per month |
| 16 | 50–60 euros per month |
Is it a lot or a little? If we compare the amount of pocket money with expenses and wages of parents, we will get the following figures. The minimum funds required for living in Germany for one adult are currently about 563 euros (food, clothing, hygiene products). A child needs at least 357-471 euros per month. The cost of renting a one-room apartment in Berlin is 350–600 euros, a two-room apartment is 600–1000. Of course, you can find more expensive ones. The minimum wage for an adult is about 2200 euros, after deduction of taxes it will be around 1450 euros. So, pocket money for a 14-year-old child can be about 3% of one parent's salary or 3-8% of the minimum living wage per child.
The decision about how much pocket money to spend each month is individual for each family. The main thing here is the development of the child's financial and long-term planning skills and the support of adults on the way to this.
