A woman asked me recently why she should give her children pocket money as she can afford to buy them what they want – unlike her upbringing where her parents were struggling, and she had to save for the things she wanted.

Yet by not giving her children pocket money and the opportunity to learn to manage their money, she is denying them a vital life skill. What is the point of spending all that money on extra education, if, when your child lands their dream job, their lack of money management skills leaves them broke?

Pocket money is an excellent way to help children learn the value of money and how to manage it, with the added bonus of getting those chores done around the house.

As soon as your child can count, you can give them pocket money. The amount depends largely on the family income, age of the child, and what the pocket money is for. For young children it may be to buy a treat once a week or for the school tuckshop. Children love the sense of independence of paying themselves and it also encourages maths skills as they learn to calculate and count change.

As they become older and start setting goals, pocket money can used to teach saving – for example they can save towards a special toy or item of clothing. Once they become teenagers, pocket money can become a way to teach budgeting by providing an allowance to cover their toiletries, clothes and entertainment.

Some families link pocket money to chores. Each family has different views, but in our family basic duties like making their beds, keeping their room tidy or hanging up their towels do not earn them pocket money – those are expected as part of good housekeeping. Pocket money is for things they do for the family like looking after the family pets, washing dishes and occasionally the car.

If you are giving your teenager an allowance to buy their own basic necessities, then this would form part of the family’s normal household budget, whereas things like entertainment or extra airtime should either be linked to chores or paid for out of money that they earn themselves from a part-time job.

Give your kids the gift of money management skills.