Pocket money is AWESOME. It’s an important opportunity for kids to get experience in managing money, building good habits that will serve them for life - and, hopefully, a chance for mum and dad to get a few extra jobs done around the house.
But have you ever stopped to think that the way in which pocket money is given matters?
An Australian study has shown that amongst children earning money through chores or a job, those who use technology to track their finances have a better understanding of the value of money compared to those who do not use technology; and a similar trend was found amongst children who did not have to work for their money.
In an age where most kids spend more time using the internet than watching TV, and with the majority of kids owning a smartphone, most of what kids want and use is paid for online and electronically. That often means that, for children with pocket money stored as cash in a piggy bank, the ‘buck’ is quite literally passed on to parents. Not only does this present a tricky and often costly situation for mum and dad as well as the kids, but by separating the responsibility of spending from the responsibility of earning or saving, the educational value of pocket money is lost.
As kids learn money management skills, learning how to research alternatives, compare prices and spend responsibly are just as important lessons as learning how to save. IPAC Financial Adviser, Petra Churcher agrees, arguing that “a child that saves 100 percent of their pocket money isn’t really learning anything”. She instead recommends that parents “make children responsible for some purchases themselves, so they learn how to spend as well as save”.
This is where a traditional bank account can make it tricky for parents to teach kids about the financial responsibility skills they’ll need for life. With age minimums for bank cards preventing children from easily putting savings towards purchases, and with many youth accounts charging crazy-high fees for withdrawals, children are encouraged not to spend. This means the educational value of regular bank accounts is being lost.
This pocket money problem, then, needs a digital solution to engage kids. Enter Spriggy! An app, purpose built for parents and kids alike, which allows kids to take control of the entirety of their digital finance journeys – from earning to saving and spending – while preparing themselves for a cashless future… all under mum and dad’s watchful eye.