Parenting and money: How essential is monetary responsibility?

Mums and dads can treat their teenagers in many different ways when it comes to cash. They can refuse to give them any money, making them work for it through a Saturday job. They can give their offspring a few pennies for good behaviour or for doing jobs around the house. They can keep their youngsters’ finances closer to home, paying for items for them, or they can combine a blend of the various approaches, handing out money as and when required.

Those who entrust their youngsters with financial responsibility would perhaps say that without an early grounding in the pitfalls of money and how debt can soon grow, young people face a severe life lesson in their 20s and 30s that might hold them back from their aims and dreams for years. For evidence, look at the fact that 31% of all 18-24 year-olds are over-indebted, and presumably struggling in life and relying on others.

Giving a teenager practical experience of money matters before he or she has had a mortgage, loan or substantial debt of any kind will be an early lesson in finance that should stand them in good stead. That’s the conclusion from a study by The Money Advice Service, which asked 15-17 year olds who had an income how they received it and whether there was a correlation between regularity and confidence in money matters.

For example, those who received money on an ad hoc basis were less confident in managing money than those who received it consistently (65% compared to 75%), and only 52% were able to keep track of money compared to 64% of those who received a fixed amount on a regular basis. The vast majority (92%) were responsible for at least something in their lives such as driving lessons, mobile phone bills, and collecting Christmas presents. And those who did receive regular pocket money were much more likely to speak about money with others, with 91% admitting that their parents gave the best financial advice.

Georgia Price (15) is a typical teenager who would love enough money to one day buy “all the clothes and make-up in the world.” In the meantime her mum and dad have set up a financial lifestyle for her that is proving beneficial.

Georgia said: “The results of the survey don’t really surprise me. In my opinion teenagers should get money every week, and a fair amount would be between £10 and £20. That’s what I get, although on a special occasion it might be as much as £50.

“I try not to go over but if I needed more money I would borrow from a friend if we were out. If it was to buy something I need for school or just general stuff, mum and dad would often give it to me if I have been good. I usually spend my money on clothes or make up. It depends if I want to save it for something but usually not as I'm a shopaholic, but I talk to my parents a lot about money and I think I know what is right and wrong.

“I think doing jobs and earning money consistently will prepare me better for later life, because it teaches me that I have to work hard to earn the money. It’s all dependent on behaviour, which also is similar to a working environment.”

Georgia is presumably on her way to becoming the exact type of young person that the Money Advice Service wishes were more plentiful. Parents have to be more intelligent with the money that they give their youngsters than ever before, especially when one considers a report by Halifax, reported in the Daily Mail, which found that increases in pocket money have risen more than twice as fast as increases in wages. Children’s payouts have rocketed by 462% in 27 years; from £1.13 a week to £6.35 – while wages have only increased by 188% in the same time. And some get more – much more. 

Ellie Ball (17) said that she knows of one friend who gets £100 a month. Ellie, who would buy a car and a pug if money was no object, said: “I don’t get regular pocket money and never have. If I’m going out with friends mum will give me money to go with, for lunch and a few things like a new top or makeup.

“But I save money and my Christmas money goes in the bank. As a family we speak about money all the time, mum often tells us how much the bills are and what the cost of living is and how important it is to save, and how important it is to work for your money. I know how hard my parents work for their money, and appreciate the value of it.”

The common belief is that, as a parent, there are certain things you should and shouldn’t do when teaching your youngsters about money. The ‘bailout’ is advised against, as is dismissing dream purchases. But does it matter? Do all parents have to follow the perceived wisdom? And even if they know what they should be doing, doesn’t the pressure of every day life dictate that sometimes it’s just easier to stick to their current routine?

Melanie Wade’s son Elijah (15) doesn’t get regular money but simply gets it when he needs it. His sporadic money goes on aftershave food and drink, and none of it is saved. He said: “My money isn’t really dependent on behaviour. I think a fair amount for a teenager is £20 a week.

“If I needed more money for some reason I would be given it, but it won’t prepare me better for life as I would be reliant on my parents.”

Elijah wants the same things in later life that most people do such as a house, car, family and holidays, and who is to say that he won’t achieve it? A sudden change in habits, a strong career, a little luck, and many other factors might come into play.

Even if parents do treat their youngsters in the ‘correct’ way, it doesn’t always matter. Melanie Biggadike’s family is almost an experiment in how two young people’s monetary attitudes can diverge, despite them being brought up in exactly the same way – and even questioning their parents’ monetary habits.

Joe (22) and Claudia (20) didn’t get pocket money on a regular basis, and Melanie said: “My daughter monitored my spending and would often ask me if I really ‘needed’ something and questioned my buying habits! My son has the same poor attitude to money as me; it just burns a hole in our pockets.

“If I had a teenager now I would probably give them around £10 a week. But I don’t think it prepared my teens better for later life as they have totally different attitudes to finances.”

In some ways Mel’s experience sums up how imprecise the science of parenting may be. Teaching a youngster about careers, love, money and life is tough and no one has the perfect blueprint – but the latest advice might be able to give a few pointers.