Now that we pay a lot digitally, we increasingly give our children digital pocket money. Four years ago, almost three quarters of parents still gave a little bit of pocket money, last year that was not even half. Not all parents are comfortable with it.
In 2018, pocket money was still paid in full in cash in 74 percent of the cases, in 2021 this was only 48 percent. This is shown by a new ING survey on financial education among nearly a thousand parents.
Parents are also increasingly giving combined pocket money, i.e. both cash and digital. Four years ago, 10 percent of parents did this, now that number is 33 percent. “This is the first generation of children growing up with parents who hardly use cash themselves. Adults now almost always pay by debit card or even by phone. So you’re also seeing a change in pocket money,” says Karin Wartena, specialist child & young people at ING Netherlands.
Parents are afraid that children spend too easily because they don’t feel how much they have
Teaching the value of pocket money
For the majority of parents, digital money is not a problem in financial education. Yet 38 percent of respondents in the survey say they find it difficult to teach their child how to handle both digital and cash money. Wartena: ,,They wonder how they can teach their children the value of money. As a child you used to have a jar of money, digital money is much less tangible. Parents are afraid that children spend too easily because they don’t feel how much they have.”
That is why young children still wait a little longer before giving digital pocket money, Wartena sees. ,,Most parents start with pocket money when the child is 5 or 6 years old and then they pay the pocket money mainly in coins. At that age, they are often not yet independent enough to handle digital money.”
The ‘digital revolution’ has also not changed the way parents practice with money together with their child, Wartena sees. “That still takes place in the supermarket, where the child can help pay with the pin. Or where they compare prices together and then view the receipt at home. A child learns a lot from that.”
If you give your child pocket money, he or she learns how to handle money. But when do you start and how much pocket money do you give? Read more about pocket money at Ouders van Nu.
When do you give your own debit card?
What Wartena often sees: that parents request a children’s account for their child early on and also immediately request a debit card. This is possible with us from the age of 6. They then let their children practice with it so that they can handle it with confidence when they go to high school and become more independent.”
The research shows that 69 percent of all children aged 4 to 7 have their own checking account. In the age group 8-11 years this is already 79 percent. When they reach secondary school age (12-17 years), 91 percent have one. The number of own bank cards is slightly lower. 13 percent of children aged 8-11 have their own pass, while secondary school students have one in more than 60 percent of the cases.
We must not forget that a debit card is a big responsibility for children, says Wartena. ,, It is difficult for young children to remember the pin code and they must of course also keep it a secret from their friends. That is often quite complicated.”
How much pocket money do you give your child? Three tips from pocket money expert Annelou van Noort
1. How much pocket money do you give? The Nibud website provides an overview of the average amounts that parents give to their child. For children aged 7 to 8, this is an average of 1 to 2 euros per month, while a 12-year-old secondary school student receives an average of 17 to 20 euros per month. Van Noort: ,,I think it is especially important that you consider what the pocket money is for. Is it for the little extras, or should your child also buy birthday gifts from it? This changes the amount. Talk about it and discuss what it includes. Some children are further along in this than others. In addition, of course, it depends on the wallet of the parents.”
2. Cash or digital pocket money? Van Noort: ,,I always recommend starting with cash. Then children see that money is a medium of exchange. The value is very clear. If they buy something for 4.50 and they have 5 euros, they see that their piggy bank is actually a lot emptier after that. From group 6 or 7, I advise you to start giving digital pocket money. In secondary school, debit card payments, sending Tikkies and transferring are almost more normal than cash, so it’s nice if children have already practiced and know how it works.”
3. Including children in expenses? “Parents often forget to chat with their children about money,” says Van Noort. “Include children in the choices you make. Ask what they think is more expensive, the cheese or the sprinkles on the table. Or explain to them what preceded that purchase you made in the store. Children see us cheerfully passing a pass somewhere, but do not realize that we have worked for it and that choices have been made. Young children often say: ‘Then why don’t you go with a pin?’ That’s because we forget to talk about the value of money.”
Frame: Marloe van der Schrier
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