Recently, I received the following email:
We’re a PR firm representing a toothpaste company. We’ve commissioned some research on how much Aussie kids get from the Tooth Fairy. Can we pay you to comment on the research for our press release?”
“No” was my firm answer.
I mean, seriously, who do they think I am … the Easter Bunny?
Still, I have young kids, so I’m inherently interested in the parental construct of the Tooth Fairy. Not that I’ve broached it with my son, Louie, for fear he’d never sleep (or eat a toffee apple) again:
“Mate, each time one of your choppers is ripped from your gums, we wash off the blood under the tap, then we pop it in a glass of water by the side of your bed. And then in the middle of the night, a fairy will creep into your room, take your tooth, and leave you some money for it. Sweet dreams!”
The survey, of over one thousand Aussie parents, found that the average payout for a first tooth has hit $3.51, which sounds suspiciously like the amount of shrapnel in your car’s cupholder that evening. Yet the survey also found that some parents in Western Australia and New South Wales are shelling out a whopping $40 per tooth!
What sort of message is little Timmy getting when he wakes up, looks at his bedside table and sees two crisp $20 notes sticking out of the glass?
For an entrepreneurial kid it says, “My little brother’s mouth is a goldmine! Where are Dad’s pliers?”
Or, more realistically, it tells Timmy, “I just got forty bucks for doing nothing”.
How Not to Raise a Spoilt Brat
No one wants to raise a spoilt brat, but plenty of otherwise well-meaning parents do.
And often the bratty behaviour begins with the best of intentions — giving out pocket money.
According to a recent study from comparison site Finder, the average parent is shelling out $483.60 per year in pocket money per child.
Yet here’s the kicker: the survey also found that, of the 3.3 million Aussie kids who receive pocket money, only a third have to do any chores to earn their cash!
Is it any wonder some kids grow up to be entitled little brats?
So, parents, here are my five pocket money tips for raising financially fit kids.
#1 Don’t Pay Your Kids For Basic Chores
Most kids get paid to do nothing. Bad.
And even if they do end up working for their pocket money, it’s usually for doing a few basic chores around the house.
The danger is that if you pay them for basic chores then you’re creating a pavlovian response that tells them that the only reason they should bother lifting a finger is if they’re being paid.
No, no, no!
You need to explain that everyone needs to pitch in and help out the family, for free.
Example: “Boy, have I got a deal for you! If you set the table each night, you get to … eat.”
#2 Give Them Responsibility
Understand that pocket money isn’t about the money — it’s a tool for financial education.
If you get it right, your kid will gain an appreciation of the value of a buck, a sense of accomplishment, and the self-confidence that comes from being able to earn their keep.
So, set them age-appropriate jobs: younger primary school kids can mow lawns, wash cars, crutch sheep. Older primary school kids should be able to cook the family dinner once a week: give them a budget, make them do the shopping, and have them explain over dinner how much it all cost.
#3 Pay Them Quickly
How much should you pay?
A good rule of thumb is $1 for each year of their age — so a five-year-old will get $5.
Now, and this is important, make sure you have a good supply of $1 and $2 coins on hand so you can pay your kids straight after they’ve finished a job. Don’t keep them waiting till the end of the week — what we’re trying to do is create the link between work and money.
#4 No Bank Accounts
For primary school kids, bank accounts totally suck.
The only reason student bank accounts are popular is that they’re a lucrative marketing tool for the big banks, who want to sign up kids as quickly (and as cheaply) as they can.
Yet kids learn by seeing — you want them to watch the dollars piling up as they work. Enter my infamous ‘Jam Jar’ approach: grab three empty jam jars and label them ‘Spend’, ‘Save’ and ‘Give’.
Divide the gold coins evenly each time they do some work. These are the building blocks of good financial behaviour: encourage them to spend wisely (their choice), encourage them to save up for something, and, finally, show them how much fun it is to give to other less lucky kids.
#5 No Fairies
A survey by Westpac found that 66 per cent of parents are worried about how financially savvy their kids will be by the time they finish high school.
With good reason. Despite my best endeavours, your kids are unlikely to be taught about money in school (and if they are it will be from Commbank, who have wonderful cartoon characters with such catchy names as ‘Cred’ (and, no, I’m not making that up).
The bottom line is this: there’s no magical fairy who’s going to teach your kids how to be good with money.
Raising financially fit kids — generous, hardworking kids — is your ultimate responsibility as a parent.
Tread Your Own Path!