Recently, during a panel discussion on RTE’s Today programme, we discussed the recent headline that 47% of Irish businesses believe they will go fully cashless in the next 10 years. While no surprise to most, the prospect of a cashless economy will inevitably bring its own problems. A portion of the older generation or those unfamiliar with online banking will struggle. We also spoke about children and the effect that a cashless society may have on them.
I see it already with my own children. We got them a Junior bank card each, feeling it would be safer for them to carry instead of cash and we put their weekly pocket money into their card. But I can’t help thinking they are missing out on the joy of seeing their loot build. Their pocket money is not tangible – it’s purely a swipe of a card. I’m not sure they have the same level of respect and understanding for money our generation did, and I worry they sometimes fritter away their pocket money as they don’t really feel the weight of it in their pockets in the first place. I remember counting my coins until I had saved up enough to buy whatever was on my wish list. My boys frequently forget how much they’ve spent on their treats and are shocked when I tell them their money has gone.
Interestingly, my sons tend to approach money in very different ways. My eldest spends his cash as if it’s burning a hole in his pocket, while my youngest is much more careful. We recently celebrated a Confirmation and birthday in the same week and both were lucky enough to receive some money. The older guy was online the next night, searching through website after website for an awful looking pair of overpriced trainers. My youngest insisted we visit the local toy shop bringing his entire savings. We walked around for 30 minutes before he declared everything was a rip-off and left empty-handed. He has no problem making a purchase when it’s from the Bank of Mum and Dad, but since it was his own cold, hard cash, parting with it was too much!
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But is pocket money actually a good idea? Irish Times columnist and mum-of-seven Jen Hogan thinks so, although she rightly points out we are in the middle of a cost-of-living crisis so parents should be guided by their own situation. Jen never received pocket money as a child so doesn’t think it’s necessary. If you’re in a position to give it, it’s a great way to teach children about money management but adds, it won’t make or break your child if not.
Jen also says that the time that children really come to appreciate and understand the value of money is when they’ve earned it themselves. She admits that when her older kids started getting summer jobs, the pay cheques brought not only a sense of achievement but a realisation of having to work for their money, so they were more careful in how they spent it.
As for how much each child should receive? One approach Jen suggests is to sit down with your child and go through how much they actually need on a weekly basis. Your eight-year-old might want to buy an ice-cream, some chocolate or a comic so their pocket money should be on the lower end of the scale. For an older child, pocket money might also include phone credit, travel fare or a monthly cinema trip. Writing out what pocket money should cover can help your child to understand the importance of budgeting, so it’s not all spent the second they receive it, only to be left unable to join their pals at the movies later in the month.
Finally, should pocket money be given or earned? Jen reckons that within the family dynamic everybody should pull their weight, and as parents our job is to make them independent so there is merit in attaching pocket money to household responsibilities. Basic chores like loading the dishwasher, making their bed or bringing out the bins could be shared out among younger members of the household.
One thing is certain: the next generation will be living in a financially virtual world, so we need to ensure they have a deep understanding of the importance of money, whether they’re holding it in their hand or looking at their balance on a screen. There’ll always be savers and spenders – I have both and put it down to personality type. I just hope in time as they mature so will their attitude to money because Bank of Mum and Dad will be retiring!
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