The value of pocket money in exchange for completed chores has been highlighted in a new study.
The Westpac Kids and Money Report surveyed 1,000 parents and children aged between four and 18. It found 45% of children who earned money through chores or a part-time job, and used technology to track their finances, had a good understanding of the value of money. Only 18% of children who don’t do either had a good understanding of the value of money.
77% of children completed household chores - spending an average of 2.4 hours a week on tasks. Cleaning their bedrooms, looking after pets, doing the dishes, taking out the rubbish and general house cleaning were the most common chores.
Two in three parents of 4-18 year olds surveyed believe children should receive money based on the completion of a number of chores (61%).
Westpac general manager of retail banking Gai McGrath said “Learning the basics of saving from an early age is important. But we also know that kids today earn and save their money in a dramatically different way than previous generations.
“Our research suggests that technology can have an impact on instilling strong financial habits from a young age. This is important as we know that the earlier children develop good financial habits, the more financially savvy they will be in the long run.”
Westpac’s Top Pocket Money Tips for Parents
Plan: Be clear about the chores you want to set and make sure your kids are happy with them. Also think about how they can enrich your kids’lives (both through their monetary value, and their ability to set goals and achieve them).
Accountability: Make sure your children are held accountable for their pocket money and how much they are saving. When they show improvement, reward them accordingly.
Be consistent: Don't be tempted to frequently change the reward amounts or the chores as it will create a system that your kids will view as "unfair".
Be disciplined: If you start by saying they have to pay for items like comic books and then end up buying them one, they’ll quickly learn they don't have to do chores in order to reap the rewards.
Self-monitoring: Encourage your kids to monitor and manage their own savings. Developing these habits from an early age will ensure they are carried through to later in life.
Set meaningful goals: Ensure that the goals mean something to your child and they are more likely to achieve it and not dip into the savings.
Be realistic: Set goals that can actually be achieved by your child so they can appreciate the sense of achievement.
Westpac has developed a new app, Pay Pig, which earning and learning about money, fun, rewarding and easy, which can be downloaded at the Apple iTunes store