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Introduction

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1 How much pocket money did you get as a child, if any? Was it a regular, weekly allowance, or just occasional one-off payments for chores? Parents around the world have different ideas about the dos and don'ts of pocket money. How much should parents give? Should they track what their children spend money on? And where is the balance between teaching children valuable life lessons and simply spoiling them?

2 Giving children pocket money offers more than just disposable income – it can provide lessons in financial literacy. One of the first things children can learn is that money is finite – once it is spent, there's no more until the next allowance. This awareness can help children learn how to budget and make good financial decisions. For example, they might spend weeks saving up for something big and exciting, rather than spending small amounts immediately. Making money mistakes while the amounts are relatively small can prepare children for when they start handling larger sums of money as adults.

3 Some parents link pocket money to household chores, teaching kids that hard work and good behaviour is rewarded. Louise Hill is the CEO of GoHenry – a money management service for children. She says that earning through chores encourages financial independence and "ultimately gives much more satisfaction rather than instant gratification". The downside of this, however, is that kids may only help around the house when they receive payment, rather than seeing it as their shared responsibility. In their adolescence, young people may transition to a more lucrative way of earning pocket money – part-time work such as babysitting.

4 Pocket money used to mean exactly that – coins or notes that children could keep in their pocket. And when they're young, seeing physical cash is a good way for them to understand money. But in today's digital world, families are increasingly going cashless. Online money management services are emerging in the market, many of them offering a combination of prepaid debit cards and an app that both child and parent can use to track spending. Some even offer gamified money lessons and the option to set up pots to fulfil savings goals. This modern approach is just another way children can be prepared for adult life, where many transactions are digital.

5 There's no perfect formula when it comes to pocket money, and a lot will depend on family situation and finances. Ultimately, learning to spend wisely, save and even give generously can help children build a healthy relationship with money that can continue into adulthood.

Questions

1. Match the heading to the paragraph.

Paragraph 1 ________
Paragraph 2 ________
Paragraph 3 ________
Paragraph 4 ________
Paragraph 5 ________

a. Saving pocket money
b. Earning pocket money
c. Pocket money teaches generosity
d. Pocket money in the modern world
e. The bigger picture
f. Many factors to consider

2. Choose the correct option based on the content of the article.

1. In paragraph 2, what does 'it' refer to in the following sentence? Giving children pocket money offers more than just disposable income – it can provide lessons in financial literacy.
a. giving children pocket money
b. disposable income
c. pocket money

2. Understanding that money is finite teaches children…
a. how to spend.
b. how to budget.
c. how to be an adult.

3. The author thinks it's bad for children to make mistakes with money.
a. True
b. False
c. Not given

4. What is the disadvantage of paying children for doing chores?
a. They might not help around the house without payment.
b. They might be underpaid.
c. They might get tired.

5. Digital money management services cost money.
a. True
b. False
c. Not given

3. Use the words from the list to complete the summary of the article.

Giving children pocket money can improve their 1) ________. If they want to 2) ________ for an exciting new toy, they must learn how to 3) ________ and only buy the things they need, rather than being tempted by 4) ________. If children want to save up faster, they must do more chores to earn more pocket money from their parents. Once they're older, they can try something more 5) ________ such as babysitting.

save up
financial literacy
instant gratification
allowance
budget
spoil
lucrative

Vocabulary

allowance
some money given as a regular payment to meet needs

one-off
done only once

spoil
treat someone (often a child) too indulgently, sometimes worsening their character

disposable income
money left after all necessities, such as taxes and bills, are paid for

financial literacy
ability to manage money wisely

budget
plan how you are going to spend your money

save up
accumulate your money by not spending it, usually for a purpose

instant gratification
immediate, small reward instead of a larger reward later

lucrative
producing a lot of money

gamified
made into games to make something more interesting

Answers

1. Match the heading to the paragraph.

Paragraph 1 f) Many factors to consider
Paragraph 2 a) Saving pocket money
Paragraph 3 b) Earning pocket money
Paragraph 4 d) Pocket money in the modern world
Paragraph 5 e) The bigger picture

2. Choose the correct option based on the content of the article.

1. a. 'It' refers back to the phrase 'giving children pocket money'.

2. b.This awareness can help children learn how to budget and make good financial decisions.

3. b. False.Making money mistakes while the amounts are relatively small can prepare children for when they start handling larger sums of money as adults.

4. a. The downside of this, however, is that kids may only help around the house when they receive payment, rather than seeing it as their shared responsibility.

5. c.Not given. How much digital money management services cost is not mentioned.

3. Use the words from the list to complete the summary of the article.

Giving children pocket money can improve their financial literacy. If they want to save up for an exciting new toy, they must learn how to budget and only buy the things they need, rather than being tempted by instant gratification. If children want to save up faster, they must do more chores to earn more pocket money from their parents. Once they're older, they can try something more lucrative such as babysitting.

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