Recently it has come to my attention that my children are starting to cost a lot of money! Well as a matter of fact that came to my attention a long time ago, however as they get older and their tastes and interests mature, there is certainly a feeling of constantly putting ones hand in ones pocket. After being asked one too many times for a slurpee this summer I thought it might be a good idea to give them a set amount of money and see how they can budget it for the summer! Or maybe we should we just give pocket money and see how they go budgeting or saving for bigger items over a longer period of time? We havn’t really done the pocket money thing yet so I started to look in to some of the ways other parents help to teach their kids about budgeting, spending and saving. I imagine there will be some that will cope much better with budgeting than others, but it is something we should be thinking more about as they head into teenage years. Pocket money however shouldn’t be in return for everyday chores that you expect of your children. Being part of a family unit requires that certain jobs are to be done just as part of your contribution to the household. Depending on their ages, kids can be made to make beds, put away toys, unpack dishwashers, take out bins, feed pets etc. I think it is important for kids to know there are certain jobs that are required to be done without reward. I then relate this to my kids by highlighting all the unpaid work I do around the home! I think it is ok though to offer extra pocket money for chores that go beyond their usual so that they do get a sense of reward for effort as well. These may be things like washing cars, mowing lawns etc. When kids get pocket money or money for birthdays I love Michael Grose’ idea of having 3 jars. One for saving, one for spending and one for a charity. I think this gives a great understanding of the need to budget for different things and also a nice lesson in sharing wealth. As kids get older and they start liking designer clothes and expensive basketball shoes then I know many parents that give them the money for the basic version and anything they want beyond that must be saved and paid for themselves. Another good way to differentiate between need and want! For my kids, we have been putting half of their money into a bank account so they are able to contribute to bigger purchases. There are lots of great kids saving plans around such as this one from Newcastle Permanent. This particular savings account comes with a passbook so kids can get the thrill of watching their savings grow, and there are no transaction or account keeping fees. Certainly as they get older and start wanting cars and heaven forbid a house one day, teaching them some skills about money are certainly some lessons that won’t go astray. How do you do pocket money and kids spending at your house? Are their differences in the way your kids spend and save. This is a sponsored post from Newcastle Permanent, for all your personal, business and investment banking.