14 June 2016

Pocket money strategies for your kids

My Money Matters |

Giving your children pocket money is a great way to teach them how money works, how to budget and how to save. We asked a few mom bloggers and parents of South African children of all ages, what their approach to pocket money is, and their tips for raising money-savvy kids.

‘You want pocket money? You’ve got to earn it’

Most of the parents we spoke to felt that pocket money has to be earned. “Once Mikayla turns six next year I will do the same thing my parents did,” says Mariza Halliday of Caffeine and Fairydust. “I will pay her for each chore she does. For example: feeding the cats is R5, cleaning her room is R20, making her bed is R5. That will be her money to do with as she pleases.”

Robyn van der Merwe shared her sister’s strategy: “She has two kids – Grade 1 and 2. They’re given daily tasks on a calendar, like making the bed and brushing their teeth without having to be asked. Each task has a monetary value of R1. There are 10 tasks to complete throughout the week. If one of the tasks isn’t completed, they lose R1. If all tasks are completed they receive R10. So far it’s really worked as a form of pocket money and discipline.”

Pocket money in exchange for good behaviour

There are also a few parents that don’t pay pocket money in exchange for doing chores, like Cat Gous who has kids aged 8 and 11: “My kids get R20 every week, which is basically tuck shop money. The usual chores have to be done – and there is no negotiation on this. They are not linked to pocket money; it’s simply your job as part of the family. You do not get pocket money if you do not eat the lunch we packed for school though.”

Tania Roux has a similar system in place: “Our kids get R50 a month, also not linked to chores. We keep tally on a pad on the fridge, so cash hardly ever changes hands, as we would often forget. We do, however, deduct money if they lose or break things. Right now my son is R70 in the red as he has recently lost his school takkies.”

DIY blogger and mom, Leigh Richie-Hirsch, also deducts pocket money when gadgets, parts of the school uniform, or items of stationery go missing.

How to making learning to save your pocket money fun

A 2012 study showed that American children only save 1% of their allowance. South Africans are also some of the worst savers in the world, and only 6% of South Africans have saved up enough money to retire on. Here are some fun ways to raise a new generation of money-savers.

“I haven’t started [giving my kids pocket money] yet,” says parenting journalist Georgina Guedes, “but I like the Three Jars approach.” Three Jars is a concept where children split their pocket money between three virtual jars – save, spend and share – teaching them to think about what they do with their money after they receive it, and how to manage it.

A similar system is called ‘Four Banks’. You have four piggybanks for your kids, labelled as follows:


  • The Spending bank is where you keep the ‘everyday’ money for buying treats or toiletries.
  • The Savings bank is for putting money away towards something they’ve had their eye on for a while, like an Xbox or a new Lego set.
  • The Investment bank is where your kids can help contribute towards their own future, by putting away money for university or even a gap year.
  • The Giving bank is for gifts and charity.

Some of the parents we spoke to have children who are old enough to have their own savings accounts. Jeanette Verster of The Real Jenty says: “The boys get R50 a week. For a long time it was cash, which was terrible because they just spent it… or I forgot to give it to them. They have bank accounts now, and I have an auto-transfer set up every Saturday. They hardly spend money now, and they have proper savings goals.” When it comes to savings accounts for your kids, you have many options to choose from. This includes the Absa MegaU account, which gives children younger than 19 access to a free savings account and rewards them with a free movie ticket per month, and free data.


Think about the satisfaction you felt when you bought your first car after saving up your pay cheques for a deposit? Whatever pocket money strategy you choose there’s little doubt that it lays the foundation for good money habits later in life.

What’s your pocket money strategy at home?

Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.

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