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Ask Paul: Should my kids get pocket money for chores?

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G'day Paul,

I'm interested in your thoughts on paying kids for helping out with housework and chores.

My eldest son is getting old enough to start mowing our lawn.

Ask Paul Should my kids get pocket money for chores

I'd like him to learn that hard work pays off and would like to pay him $5 or $10 each time he mows, but friends of mine say kids should just help out around the house without bringing money into it. Thanks in advance. - Trevor

Hmm. I respect both sides of this argument, Trevor. But I think there's a much bigger issue here.

It is the critical financial literacy skills that you pass on to your kids.

This is one of the most valuable things a parent or grandparent can do. Basic money skills are not a 'nice to have'. They are a 'must have' in this very complex world.

I do support pocket money. I don't have a strong view if this is chore related or just a weekly amount, with an expectation that kids help out around the house.

Lawn mowing or washing the car may be an 'extra', but either way we are just talking about an excuse to get some money into the kids' hands so they can make money decisions.

How you choose to do this I don't think is particularly important.

One thing I do like is savings goals. If the kids have an item they want to buy, it seems to help that saving is rewarded over spending.

This is a bit like bonus interest on your savings account, if you add to it and don't withdraw.

For example, if the kids are targeting an item costing, say, $100, the concept of saving $5 a week for 10 weeks with a parental bonus of $50 for saving $50 is a powerful concept.

Spend it, it is gone. Save it, not only do you have those savings, you get a bonus.

The dollar amounts don't matter, it's the savings habit; just like cleaning your teeth, that becomes a very healthy habit.

Another good habit is using technology for investment. This is where you can add to good habits. Take a look at Spriggy, a pocket money app, for example.

My summary: go with whatever works for your family. Regular pocket money or chores or a combination of both. But the real point is learning the power of saving versus pretty meaningless and soon-forgotten spending.

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Paul Clitheroe AM is Money's founder and editorial adviser. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of Ecstra, an independent charitable foundation building financial wellbeing of Australians. He is chairman of InvestSMART Financial Services, and was chair of the Australian Government Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Comments
Alex G
March 5, 2025 5.00pm

I would really like it if you did not promote Spriggy as a primary banking accounting for youth's - have you seen the fees involved in that program? Setting up a youth account (as I have done recently) is hard to understand. Most of the financial literacy targeted programs include significant fees, and are high on the Google search list. You can actually go into your bank and set up an account for your kids linked to your own account. Often fee free, and kids can see it (and their savings and interest earnings) via your banking app. Lets promote that instead of a program that takes 1/5-1/3 of an annual pocket money allowance in fees (if your paying your kids ~$5/week or fortnight) - just for some gamified app!