Latest / Dr Justin Coulson's Happy Families / #247 The Question of Pocket Money

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#247 The Question of Pocket Money · Dr Justin Coulson's Happy Families

0:03
Speaker 1: It's the Happy Families podcast. It's the podcast for the
0:07
Speaker 1: time poor parent who just wants answers.
0:10
Speaker 2: Now, as part of a team, there are certain things
0:12
Speaker 2: that you just have to do to make the team function.
0:15
Speaker 2: And as a family unit, we're a team. We work together.
0:18
Speaker 1: And now here's the stars of our show, my mum
0:21
Speaker 1: and dad.
0:22
Speaker 3: Good.
0:22
Speaker 4: This is doctor Justin Colson. I'm the author of six
0:24
Speaker 4: books about raising happy families. I'm here with my wife Kylie.
0:28
Speaker 4: She's mom to our six children who are mostly happy
0:32
Speaker 4: most of the time except for the times that they're not.
0:36
Speaker 4: And today we are really excited to talk to you
0:38
Speaker 4: about pocket money. It's a conversation that has been floated
0:42
Speaker 4: our way from numerous messages podcasts at happyfamilies dot com
0:47
Speaker 4: dot au. Before we talk about pocket money, there is
0:51
Speaker 4: a webinar tonight and I want to give it a
0:53
Speaker 4: really quick plug because it's an important one. Paul Dylan
0:57
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1:01
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1:03
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1:08
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1:25
Speaker 4: do if your child or their friend is experimenting with
1:27
Speaker 4: using drugs or any of that sort of stuff where
1:30
Speaker 4: they've got questions. It's going to be an absolutely brilliant webinar.
1:34
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1:37
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Speaker 4: for premium members. If you're not a member, it's thirty bucks.
1:46
Speaker 4: All the details are on our Facebook page. That's the
1:49
Speaker 4: plug for pop Pills and Parenting with Paul Dylon and
1:53
Speaker 4: myself tonight. And now let's talk pocket money.
1:55
Speaker 2: What's the purpose of pocket money in the first place.
1:58
Speaker 4: This is a really controversial conversation, Like people get fired
2:02
Speaker 4: up about why you should or shouldn't give pocket money.
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Speaker 4: Some parents say, why would you give the kids money?
2:08
Speaker 4: Full stop and a story, And other parents are like,
2:10
Speaker 4: oh no, no, you've got to give them pocket money. Because
2:13
Speaker 4: they'll learn the value of money. And then there are others.
2:16
Speaker 2: How do they learn the value of money if you're
2:17
Speaker 2: just handing it over to them.
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Speaker 4: That's a great question. I don't know. That's not how
2:21
Speaker 4: we do it. And then there's the whole you give
2:24
Speaker 4: kids pocket money. This is Scott paid, the Barefoot investor,
2:26
Speaker 4: who I'm a big fan of, but I really disagree
2:29
Speaker 4: strongly with him on this one, that you give kids
2:32
Speaker 4: money for doing chores or fulfilling duties around the house.
2:37
Speaker 4: So these are the main reasons that people give pocket money.
2:40
Speaker 4: Let's go through them one at a time. First off,
2:43
Speaker 4: the person who says, why would you even give kids money,
2:46
Speaker 4: what's your response to that?
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Speaker 2: They obviously have very little kids, because very little money.
2:52
Speaker 2: As soon as your kids actually are old enough to
2:55
Speaker 2: understand that there are needs and wants, they're asking for it.
2:59
Speaker 2: So whether or not you're giving pocket money, you are
3:02
Speaker 2: consistently dipping into your pocket.
3:04
Speaker 4: Yeah, to provide for them. Okay, what about what about
3:08
Speaker 4: getting paid for jobs around the house, doing chores, making
3:11
Speaker 4: your bed, getting ticks on the chore chart, so that
3:13
Speaker 4: end of the week you get your fifty cents or
3:14
Speaker 4: you get your two dollars. You don't like that. You're
3:17
Speaker 4: looking at me funny. I mean, we've talked about this.
3:19
Speaker 4: What's the issue.
3:20
Speaker 2: No, it goes against everything I believe. You know, as
3:22
Speaker 2: part of a team, there are certain things that you
3:24
Speaker 2: just have to do to make the team function. And
3:27
Speaker 2: as a family unit, we're a team, we work together,
3:30
Speaker 2: we're all responsible for the greater good of how that
3:34
Speaker 2: team functions, how our household functions. And so in order
3:37
Speaker 2: for me to, you know, if I start paying my
3:40
Speaker 2: children to do jobs that they otherwise should just do
3:43
Speaker 2: because they're part of a team, then all of.
3:47
Speaker 4: A sudden, everything's negotiable.
3:49
Speaker 2: Everything is And why am I not getting paid?
3:52
Speaker 4: Yeah? Yeah, when was the last time someone paid you
3:54
Speaker 4: for doing the dishes or cooking that meal? Doesn't happen, right,
3:56
Speaker 4: So that's our main argument for the two things. You
4:00
Speaker 4: just don't give kids money, but eventually you have to
4:02
Speaker 4: give them stuff anyway, or making them work for their
4:06
Speaker 4: pocket money, it doesn't really count because there's just stuff
4:11
Speaker 4: that you've got to do. You contribute to the mess,
4:13
Speaker 4: you clean up the mess, you sleep in the bed,
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Speaker 4: you make the bed, you make a mess in your room,
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Speaker 4: you're tidy your room, and you shouldn't get paid for
4:19
Speaker 4: doing that sort of stuff. We don't get paid for it,
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Speaker 4: and it's just it's called living in a family.
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Speaker 2: Well it kind of it sets them up for failure
4:24
Speaker 2: because once they leave home, nobody's paying them to do
4:27
Speaker 2: those things. And the reality is that as the children
4:30
Speaker 2: get older and the jobs get harder, or even if
4:32
Speaker 2: they don't get harder, kids start to work out the
4:34
Speaker 2: process and all of a sudden, the fifty cents you
4:36
Speaker 2: were paying them to stack the toilet roll holder or
4:38
Speaker 2: clean the toilets or scrub the shower or whatever, it's
4:41
Speaker 2: not enough, and so you just have to keep adding on.
4:44
Speaker 4: Top of Yeah. Yeah, the other thing that goes on
4:47
Speaker 4: with this as well as you say, I'll give you
4:48
Speaker 4: five bucks for tidy your room, and what's the quality
4:50
Speaker 4: of the room tidying? Like the level of accountability you've
4:54
Speaker 4: got to be in there, you're checking everything, You're getting
4:56
Speaker 4: cranky out them. They look for the quickest and easiest
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Speaker 4: way to get the five dollars rather than doing the
5:01
Speaker 4: sort of job that we would want them to do.
5:03
Speaker 4: So we are not fans of any of those approaches.
5:06
Speaker 4: I'm a big fan, though, of giving kids pocket money
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Speaker 4: so that they can learn about money. So let's talk
5:12
Speaker 4: about the ins and outs of pocket money, how old
5:14
Speaker 4: the kids should be, how much they should get, and
5:17
Speaker 4: any other questions that you've got about pocket money.
5:19
Speaker 1: Right after break, it's the Happy Families Podcast.
5:22
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5:37
Speaker 2: It's the Happy Families Podcast, the podcast for the time
5:40
Speaker 2: poor parent who just wants answers now? And today we're
5:42
Speaker 2: talking about pocket money, How, why, when? Who? Who gets
5:47
Speaker 2: pocket money?
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Speaker 4: So I reckon the first question that we've got to
5:49
Speaker 4: consider is how old should children be when they get
5:51
Speaker 4: pocket money? Pretty simple answer for this one. Once the
5:54
Speaker 4: kids are old enough to understand maths and money. Children
6:00
Speaker 4: like you know what it's like when the tooth fairy
6:01
Speaker 4: comes right and the kids get two dollars fifty and
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Speaker 4: they're more excited about.
6:05
Speaker 2: The philers fifty.
6:06
Speaker 4: Well, I'm just using it as an example. You get
6:08
Speaker 4: fifty cent, they're getting they get two dollars fifty. They're
6:10
Speaker 4: more excited about the fifty cent coin than the two
6:12
Speaker 4: dollar coin because the fifty cent coin is bigger. Yes,
6:15
Speaker 4: if your child is still at that stage, don't worry
6:19
Speaker 4: about pocket money. They're not going to learn anything at
6:21
Speaker 4: all about money at this point because they don't get
6:22
Speaker 4: basic maths. It's kind of like when they go to
6:25
Speaker 4: the touch shop at school and they order some food,
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Speaker 4: hand over a five dollar note and they get four
6:31
Speaker 4: or five coins back as they're change, and they think
6:34
Speaker 4: they've got more money now than they had when they
6:36
Speaker 4: handed over the five dollars either, like, coins are better
6:38
Speaker 4: than these papery things, and look, I've got four of them.
6:41
Speaker 4: So we want to make sure I reckon somewhere around
6:44
Speaker 4: the age of six, maybe even seven is probably about
6:48
Speaker 4: the right age for pocket money.
6:50
Speaker 2: So we've ascertained that we want to wait to pay
6:54
Speaker 2: our children pocket money until they've got an understanding, a
6:57
Speaker 2: mathematical understand you standing of the vale you of numbers,
7:01
Speaker 2: because that's going to help a lot with that process.
7:03
Speaker 2: So the next thing we're kind of going to look
7:05
Speaker 2: at then, is how much should we pay them.
7:07
Speaker 4: I hate this question mainly because I'm stingy, and I mean,
7:10
Speaker 4: We've had so many arguments, haven't we about how much
7:13
Speaker 4: we should pay the kids? And I'm kind of like, yeah,
7:15
Speaker 4: I'm not paying them anything. I just I wanted to
7:17
Speaker 4: learn about money, but I don't want to have to
7:18
Speaker 4: dig dip into my pocket. But we've also had We've
7:20
Speaker 4: had six children, like it costs a fortune. Let's say
7:25
Speaker 4: the oldest one is big enough to be getting fifteen
7:27
Speaker 4: dollars a week, and the youngest one might be getting
7:29
Speaker 4: two or three. But by the time you dish out
7:31
Speaker 4: all that cash to six kids, we're fifty dollars down
7:33
Speaker 4: each week. Like, I just hate paying pocket money because
7:36
Speaker 4: I'm giving all these kids all this cash.
7:38
Speaker 2: You're sounding like a winger right now.
7:39
Speaker 4: I'm a bit I'm a bit grinchy, I'm a bit
7:41
Speaker 4: I'm a bit scroogey when it comes to pocket money.
7:43
Speaker 4: So I don't know if i'm the right person to ask.
7:45
Speaker 4: What when you talk to mums, what do they say
7:48
Speaker 4: about pocket Lots of family.
7:50
Speaker 2: Will kind of do dollar three each.
7:52
Speaker 4: Year, right, So if you're six years old, you get
7:54
Speaker 4: six dollars. I think that's crazy. Who's going to give
7:56
Speaker 4: their six year old six bucks a week, or the
7:57
Speaker 4: ten year old ten bucks a week. But then again,
7:59
Speaker 4: I'm ach so what are on I know, I.
8:01
Speaker 2: Think for the younger children, I think it's a lot
8:04
Speaker 2: of money to put in their hands when they still
8:06
Speaker 2: don't really understand the value of it. So we kind
8:10
Speaker 2: of have started off with about two dollars or two
8:12
Speaker 2: dollars fifty for our younger children, because there's enough in
8:15
Speaker 2: that for them to put a little bit away for savings,
8:19
Speaker 2: for donating to a charity, and then having some spendings.
8:24
Speaker 2: And by the time they've done those things, they're left
8:27
Speaker 2: with about a dollar or so. And that's I mean
8:29
Speaker 2: for a six year old, that's pretty good.
8:31
Speaker 4: Yeah. Okay, so we've kind of jumped forward to what
8:34
Speaker 4: we want to teach our kids, or at least what
8:36
Speaker 4: you and I are teaching our kids. But you're saying
8:38
Speaker 4: start off small and as they get older, increase the
8:41
Speaker 4: amounts of money.
8:41
Speaker 2: Yeah. One of the things that I've loved that we've
8:43
Speaker 2: done with our kids is as they've gotten older, they've
8:45
Speaker 2: kind of negotiated with us a little bit, and each year,
8:49
Speaker 2: as we've watched what they're doing with their money and
8:51
Speaker 2: how well they're utilizing it, we're more open to extending
8:56
Speaker 2: their learning process by giving them more than those that
8:59
Speaker 2: have just squandered it and spent it.
9:01
Speaker 4: Yeah yeah, yeah. So it becomes a conversation where we're saying, Okay,
9:05
Speaker 4: you're this big and we think this is the right
9:07
Speaker 4: amount of money for you, and they start saying, well,
9:08
Speaker 4: we want more, and we said, well, let's talk about
9:10
Speaker 4: what you're doing with it, so let's have that conversation.
9:12
Speaker 4: The things that we focus on when it comes to
9:14
Speaker 4: teaching our kids about money. Number one, we want you
9:17
Speaker 4: to save some of this cash. And we've done all
9:20
Speaker 4: sorts of things over the years. My favorite things that
9:22
Speaker 4: we've done with our kids we've said, once you've saved
9:24
Speaker 4: a whole bunch of cash, we'll actually match it. And
9:27
Speaker 4: we set goals with them, so let's see how fast
9:29
Speaker 4: you can get to one hundred dollars. Once you've got
9:30
Speaker 4: one hundred dollars, we'll actually match that with another hundred.
9:33
Speaker 4: Because they're little, it takes them six months. But if
9:36
Speaker 4: they're really consistent with their savings, and sometimes they save
9:38
Speaker 4: their birthday money, what they're learning is that when you
9:41
Speaker 4: save money, you earn interest, and when you save money,
9:43
Speaker 4: more money comes to you. So we've taught them that
9:46
Speaker 4: instead of blowing it all down at the school, touch
9:48
Speaker 4: shop savings brings more cash and they love looking in
9:53
Speaker 4: the bank and going, oh, look at how much money
9:55
Speaker 4: I've got. This is really really cool.
9:56
Speaker 2: Well for younger kids often having it in the bank,
9:59
Speaker 2: it's really hard to I have that visual. So I
10:01
Speaker 2: used to actually give them a budget book and we
10:03
Speaker 2: would literally write down one, two, three, four or five
10:06
Speaker 2: down the page. And what I loved about this process
10:09
Speaker 2: was setting goals with them. We worked out exactly if
10:12
Speaker 2: they put away a specific amount each week they would save,
10:15
Speaker 2: say sixty dollars in a period of time, we would
10:18
Speaker 2: talk about it and we would kind of increase that
10:21
Speaker 2: goal by just a little bit a stretch goal.
10:24
Speaker 4: Yeah, so see if you can get seventy five dollars
10:26
Speaker 4: by this date instead of sixty, and if you do,
10:29
Speaker 4: we'll give you a bonus.
10:30
Speaker 2: And what that means is that either they're saving birthday
10:33
Speaker 2: money if birthday money is coming in, or they're kind
10:35
Speaker 2: of sealery sacrificing a little bit. They're actually having to
10:38
Speaker 2: put away a little bit more than what they have
10:41
Speaker 2: actually budgeted to put away in order to reach that
10:44
Speaker 2: and that's when that bonus money comes in. So it'd
10:47
Speaker 2: be really exciting watching them and their brain processes as
10:51
Speaker 2: they've kind of looked at it and gone, oh, you
10:53
Speaker 2: know what, We're at the end of the week, and
10:54
Speaker 2: I still actually got fifty cents left over. If I
10:56
Speaker 2: just put that in, every cent counts.
10:59
Speaker 3: Yeah.
10:59
Speaker 4: So let's say we give them five dollars and we
11:02
Speaker 4: say so when they're young, we tell them percentages. Ten
11:05
Speaker 4: percent is a donation. We're going to help other people
11:08
Speaker 4: because we've got a lot and there are some people
11:09
Speaker 4: who don't have nearly as much. That leaves you with
11:12
Speaker 4: four dollars fifty Of that four dollars fifty, we put
11:16
Speaker 4: fifty percent of that into savings, and the other fifty
11:18
Speaker 4: percent is for you to spend, which means that in
11:20
Speaker 4: the end of the end of the month or the
11:22
Speaker 4: end of the quarter, you'll have this much in savings.
11:24
Speaker 4: But if you stretch yourself to this much in savings,
11:27
Speaker 4: guess what we'll match it. We'll give you this much more.
11:29
Speaker 4: And the kids then will be at the shops and
11:32
Speaker 4: they'll be looking at a chocolate bar and thinking, oh,
11:34
Speaker 4: I really want that. But if I spend the money
11:36
Speaker 4: on the chocolate bar. That means that I'm not going
11:38
Speaker 4: to reach the stretch goal that I've got financially, which
11:41
Speaker 4: means I don't earn the bonus cash Mum and Dad
11:43
Speaker 4: are going to give me. And so we're teaching our
11:45
Speaker 4: children to value money versus chocolate.
11:49
Speaker 2: Or well, it's also a lesson in delayed gratification, yes,
11:55
Speaker 2: because well, you know, you can have your chocolate bar now,
11:59
Speaker 2: but if you actually in time, you'll be able to
12:02
Speaker 2: get this, you know, like whether it be a toy
12:05
Speaker 2: that they're working towards or a set of books. Our
12:09
Speaker 2: kids love reading, so whatever it is, it's I can
12:12
Speaker 2: have this small thing. It's kind of the marshmallow experiment. Actually,
12:15
Speaker 2: you know you can have this now, or you hold
12:18
Speaker 2: on just a little bit longer, you can have double.
12:20
Speaker 4: That sounds great, So what if we covered off pocket
12:22
Speaker 4: money shouldn't be for chores. It should just be to
12:24
Speaker 4: teach kids about money. But if you're going to teach
12:26
Speaker 4: them about money, teach them about money, Teach them about saving,
12:29
Speaker 4: teach them about charitable donations, Teach them about what happens
12:32
Speaker 4: when you sacrifice and use self controlled delayed gratification so
12:36
Speaker 4: that you can achieve goals and help them to work
12:39
Speaker 4: towards those goals by going through it every week. Last
12:42
Speaker 4: couple of things that I can think of, make sure
12:44
Speaker 4: that you pay them consistently, so it's every Sunday morning,
12:47
Speaker 4: or is every Monday night, or is every Friday just
12:49
Speaker 4: before the weekend. Work out when you're going to pay
12:51
Speaker 4: them and be consistent about that.
12:53
Speaker 2: One of the things that Scott Pape talks about in
12:55
Speaker 2: his Barefoot Investors for Famili's book is about giving your
12:58
Speaker 2: children jars to go through that process. You know, a
13:01
Speaker 2: saving star, a spending star, and a giving jar. Then
13:04
Speaker 2: you want to make sure that you're giving them the
13:06
Speaker 2: breakdown so it's really easy for them to put money
13:09
Speaker 2: into the different jars.
13:10
Speaker 4: Yeah, you gotta have the coins, You've got to have
13:11
Speaker 4: the actual cash for them. Makes a big difference.
13:14
Speaker 2: But I think the last thing that's really important is
13:16
Speaker 2: just your children are actually going to learn more about money
13:19
Speaker 2: as they watch you.
13:20
Speaker 4: Ah.
13:20
Speaker 2: Yes, you set the example, You set the tone about
13:24
Speaker 2: how money spent. So if you're a scrooge, what are
13:28
Speaker 2: you pointing at me? For gosh? Then it might make
13:30
Speaker 2: sense that a seventeen year old who's getting very excited
13:33
Speaker 2: about getting her license very soon and going on a
13:35
Speaker 2: road trip, might choose to spend her nights in a
13:39
Speaker 2: car so she doesn't have to pay for accommodation.
13:42
Speaker 4: This sounds like a real life scenario.
13:44
Speaker 2: Maybe smokes.
13:46
Speaker 4: This is a really important thing, though. The things that
13:48
Speaker 4: we say about money become our children's internal dialogu or
13:51
Speaker 4: monologue about money. If we say, what do you think
13:53
Speaker 4: money grows on trees around here? Of course it doesn't,
13:55
Speaker 4: then we teach our children scarcity. If we just throw
13:59
Speaker 4: money at stuff about thinking, we teach children that money
14:02
Speaker 4: has no value. We want to be able to have
14:05
Speaker 4: intelligent and intentional conversations with our kids about money, and
14:10
Speaker 4: hopefully the hints and tips that we've given you in
14:12
Speaker 4: this podcast will be helpful. I'm so glad that you
14:14
Speaker 4: shared that the example that we set crucial in what
14:18
Speaker 4: our children learn about money and how it works.
14:21
Speaker 2: Well, it's been a great chat. I'm glad that we
14:23
Speaker 2: got to speak about it.
14:24
Speaker 4: Okay, pocket money. If you have any more questions, let
14:26
Speaker 4: us know. Podcasts at Happy Families dot com dot you
14:29
Speaker 4: another quick reminder pot Pills and Parenting with Paul Dillon
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14:38
Speaker 4: not a member, you can get all the info on
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Speaker 4: our Facebook page doctor Justin Colson's Happy Families. We really
14:44
Speaker 4: appreciate the work as always of Justin Ruland from Bridge Media.
14:47
Speaker 4: He produces the Happy Families podcast. Our executive producer is
14:50
Speaker 4: Craig Bruce. And if you'd like more info about making
14:54
Speaker 4: your family happier, especially through our Happy Families memberships, you
14:57
Speaker 4: can go to get all the info at happy families
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