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Speaker 1: It's the Happy Families podcast. It's the podcast for the

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Speaker 1: time poor parent who just wants answers.

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Speaker 2: Now, as part of a team, there are certain things

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Speaker 2: that you just have to do to make the team function.

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Speaker 2: And as a family unit, we're a team. We work together.

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Speaker 1: And now here's the stars of our show, my mum

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Speaker 1: and dad.

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Speaker 3: Good.

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Speaker 4: This is doctor Justin Colson. I'm the author of six

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Speaker 4: books about raising happy families. I'm here with my wife Kylie.

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Speaker 4: She's mom to our six children who are mostly happy

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Speaker 4: most of the time except for the times that they're not.

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Speaker 4: And today we are really excited to talk to you

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Speaker 4: about pocket money. It's a conversation that has been floated

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Speaker 4: our way from numerous messages podcasts at happyfamilies dot com

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Speaker 4: dot au. Before we talk about pocket money, there is

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Speaker 4: a webinar tonight and I want to give it a

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Speaker 4: really quick plug because it's an important one. Paul Dylan

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Speaker 4: runs Drug and Alcohol Research Training Australia and he's one

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Speaker 4: of the most knowledgeable people about drugs in the country.

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Speaker 4: We've got a webinar that we're doing together pot pills

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Speaker 4: and parenting. We're going to talk about the facts about

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Speaker 4: what our kid's doing, how often and when. The latest

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Speaker 4: info on vaping, nanging, and other toxic trends. The role

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Speaker 4: social media is playing and giving your kids easy access

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Speaker 4: to drugs. The biggest mistakes parents make when they talk

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Speaker 4: about alcohol and other drugs with their kids. What to

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Speaker 4: do if your child or their friend is experimenting with

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Speaker 4: using drugs or any of that sort of stuff where

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Speaker 4: they've got questions. It's going to be an absolutely brilliant webinar.

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Speaker 4: If you are a Happy Family's member, you get access

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Speaker 4: to it as part of your membership, which could be

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Speaker 4: as little as twelve dollars a month or seventeen dollars

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Speaker 4: for premium members. If you're not a member, it's thirty bucks.

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Speaker 4: All the details are on our Facebook page. That's the

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Speaker 4: plug for pop Pills and Parenting with Paul Dylon and

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Speaker 4: myself tonight. And now let's talk pocket money.

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Speaker 2: What's the purpose of pocket money in the first place.

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Speaker 4: This is a really controversial conversation, Like people get fired

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Speaker 4: up about why you should or shouldn't give pocket money.

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Speaker 4: Some parents say, why would you give the kids money?

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Speaker 4: Full stop and a story, And other parents are like,

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Speaker 4: oh no, no, you've got to give them pocket money. Because

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Speaker 4: they'll learn the value of money. And then there are others.

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Speaker 2: How do they learn the value of money if you're

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Speaker 2: just handing it over to them.

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Speaker 4: That's a great question. I don't know. That's not how

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Speaker 4: we do it. And then there's the whole you give

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Speaker 4: kids pocket money. This is Scott paid, the Barefoot investor,

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Speaker 4: who I'm a big fan of, but I really disagree

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Speaker 4: strongly with him on this one, that you give kids

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Speaker 4: money for doing chores or fulfilling duties around the house.

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Speaker 4: So these are the main reasons that people give pocket money.

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Speaker 4: Let's go through them one at a time. First off,

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Speaker 4: the person who says, why would you even give kids money,

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Speaker 4: what's your response to that?

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Speaker 2: They obviously have very little kids, because very little money.

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Speaker 2: As soon as your kids actually are old enough to

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Speaker 2: understand that there are needs and wants, they're asking for it.

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Speaker 2: So whether or not you're giving pocket money, you are

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Speaker 2: consistently dipping into your pocket.

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Speaker 4: Yeah, to provide for them. Okay, what about what about

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Speaker 4: getting paid for jobs around the house, doing chores, making

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Speaker 4: your bed, getting ticks on the chore chart, so that

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Speaker 4: end of the week you get your fifty cents or

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Speaker 4: you get your two dollars. You don't like that. You're

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Speaker 4: looking at me funny. I mean, we've talked about this.

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Speaker 4: What's the issue.

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Speaker 2: No, it goes against everything I believe. You know, as

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Speaker 2: part of a team, there are certain things that you

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Speaker 2: just have to do to make the team function. And

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Speaker 2: as a family unit, we're a team, we work together,

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Speaker 2: we're all responsible for the greater good of how that

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Speaker 2: team functions, how our household functions. And so in order

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Speaker 2: for me to, you know, if I start paying my

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Speaker 2: children to do jobs that they otherwise should just do

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Speaker 2: because they're part of a team, then all of.

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Speaker 4: A sudden, everything's negotiable.

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Speaker 2: Everything is And why am I not getting paid?

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Speaker 4: Yeah? Yeah, when was the last time someone paid you

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Speaker 4: for doing the dishes or cooking that meal? Doesn't happen, right,

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Speaker 4: So that's our main argument for the two things. You

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Speaker 4: just don't give kids money, but eventually you have to

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Speaker 4: give them stuff anyway, or making them work for their

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Speaker 4: pocket money, it doesn't really count because there's just stuff

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Speaker 4: that you've got to do. You contribute to the mess,

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Speaker 4: you clean up the mess, you sleep in the bed,

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Speaker 4: you make the bed, you make a mess in your room,

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Speaker 4: you're tidy your room, and you shouldn't get paid for

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Speaker 4: doing that sort of stuff. We don't get paid for it,

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Speaker 4: and it's just it's called living in a family.

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Speaker 2: Well it kind of it sets them up for failure

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Speaker 2: because once they leave home, nobody's paying them to do

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Speaker 2: those things. And the reality is that as the children

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Speaker 2: get older and the jobs get harder, or even if

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Speaker 2: they don't get harder, kids start to work out the

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Speaker 2: process and all of a sudden, the fifty cents you

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Speaker 2: were paying them to stack the toilet roll holder or

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Speaker 2: clean the toilets or scrub the shower or whatever, it's

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Speaker 2: not enough, and so you just have to keep adding on.

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Speaker 4: Top of Yeah. Yeah, the other thing that goes on

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Speaker 4: with this as well as you say, I'll give you

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Speaker 4: five bucks for tidy your room, and what's the quality

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Speaker 4: of the room tidying? Like the level of accountability you've

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Speaker 4: got to be in there, you're checking everything, You're getting

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Speaker 4: cranky out them. They look for the quickest and easiest

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Speaker 4: way to get the five dollars rather than doing the

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Speaker 4: sort of job that we would want them to do.

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Speaker 4: So we are not fans of any of those approaches.

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Speaker 4: I'm a big fan, though, of giving kids pocket money

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Speaker 4: so that they can learn about money. So let's talk

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Speaker 4: about the ins and outs of pocket money, how old

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Speaker 4: the kids should be, how much they should get, and

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Speaker 4: any other questions that you've got about pocket money.

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Speaker 1: Right after break, it's the Happy Families Podcast.

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Speaker 3: Imagine a home where discipline got results without anyone having

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Speaker 3: to feel bad or in trouble. The do's and don'ts

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Speaker 3: of discipline as a webinar to help parents set limits

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Speaker 3: with love, compassion and humanity. Find it now at happy

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Speaker 3: families dot com dot au slash shop.

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Speaker 2: It's the Happy Families Podcast, the podcast for the time

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Speaker 2: poor parent who just wants answers now? And today we're

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Speaker 2: talking about pocket money, How, why, when? Who? Who gets

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Speaker 2: pocket money?

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Speaker 4: So I reckon the first question that we've got to

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Speaker 4: consider is how old should children be when they get

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Speaker 4: pocket money? Pretty simple answer for this one. Once the

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Speaker 4: kids are old enough to understand maths and money. Children

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Speaker 4: like you know what it's like when the tooth fairy

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Speaker 4: comes right and the kids get two dollars fifty and

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Speaker 4: they're more excited about.

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Speaker 2: The philers fifty.

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Speaker 4: Well, I'm just using it as an example. You get

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Speaker 4: fifty cent, they're getting they get two dollars fifty. They're

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Speaker 4: more excited about the fifty cent coin than the two

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Speaker 4: dollar coin because the fifty cent coin is bigger. Yes,

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Speaker 4: if your child is still at that stage, don't worry

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Speaker 4: about pocket money. They're not going to learn anything at

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Speaker 4: all about money at this point because they don't get

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Speaker 4: basic maths. It's kind of like when they go to

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Speaker 4: the touch shop at school and they order some food,

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Speaker 4: hand over a five dollar note and they get four

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Speaker 4: or five coins back as they're change, and they think

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Speaker 4: they've got more money now than they had when they

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Speaker 4: handed over the five dollars either, like, coins are better

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Speaker 4: than these papery things, and look, I've got four of them.

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Speaker 4: So we want to make sure I reckon somewhere around

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Speaker 4: the age of six, maybe even seven is probably about

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Speaker 4: the right age for pocket money.

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Speaker 2: So we've ascertained that we want to wait to pay

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Speaker 2: our children pocket money until they've got an understanding, a

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Speaker 2: mathematical understand you standing of the vale you of numbers,

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Speaker 2: because that's going to help a lot with that process.

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Speaker 2: So the next thing we're kind of going to look

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Speaker 2: at then, is how much should we pay them.

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Speaker 4: I hate this question mainly because I'm stingy, and I mean,

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Speaker 4: We've had so many arguments, haven't we about how much

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Speaker 4: we should pay the kids? And I'm kind of like, yeah,

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Speaker 4: I'm not paying them anything. I just I wanted to

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Speaker 4: learn about money, but I don't want to have to

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Speaker 4: dig dip into my pocket. But we've also had We've

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Speaker 4: had six children, like it costs a fortune. Let's say

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Speaker 4: the oldest one is big enough to be getting fifteen

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Speaker 4: dollars a week, and the youngest one might be getting

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Speaker 4: two or three. But by the time you dish out

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Speaker 4: all that cash to six kids, we're fifty dollars down

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Speaker 4: each week. Like, I just hate paying pocket money because

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Speaker 4: I'm giving all these kids all this cash.

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Speaker 2: You're sounding like a winger right now.

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Speaker 4: I'm a bit I'm a bit grinchy, I'm a bit

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Speaker 4: I'm a bit scroogey when it comes to pocket money.

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Speaker 4: So I don't know if i'm the right person to ask.

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Speaker 4: What when you talk to mums, what do they say

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Speaker 4: about pocket Lots of family.

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Speaker 2: Will kind of do dollar three each.

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Speaker 4: Year, right, So if you're six years old, you get

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Speaker 4: six dollars. I think that's crazy. Who's going to give

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Speaker 4: their six year old six bucks a week, or the

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Speaker 4: ten year old ten bucks a week. But then again,

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Speaker 4: I'm ach so what are on I know, I.

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Speaker 2: Think for the younger children, I think it's a lot

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Speaker 2: of money to put in their hands when they still

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Speaker 2: don't really understand the value of it. So we kind

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Speaker 2: of have started off with about two dollars or two

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Speaker 2: dollars fifty for our younger children, because there's enough in

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Speaker 2: that for them to put a little bit away for savings,

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Speaker 2: for donating to a charity, and then having some spendings.

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Speaker 2: And by the time they've done those things, they're left

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Speaker 2: with about a dollar or so. And that's I mean

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Speaker 2: for a six year old, that's pretty good.

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Speaker 4: Yeah. Okay, so we've kind of jumped forward to what

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Speaker 4: we want to teach our kids, or at least what

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Speaker 4: you and I are teaching our kids. But you're saying

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Speaker 4: start off small and as they get older, increase the

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Speaker 4: amounts of money.

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Speaker 2: Yeah. One of the things that I've loved that we've

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Speaker 2: done with our kids is as they've gotten older, they've

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Speaker 2: kind of negotiated with us a little bit, and each year,

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Speaker 2: as we've watched what they're doing with their money and

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Speaker 2: how well they're utilizing it, we're more open to extending

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Speaker 2: their learning process by giving them more than those that

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Speaker 2: have just squandered it and spent it.

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Speaker 4: Yeah yeah, yeah. So it becomes a conversation where we're saying, Okay,

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Speaker 4: you're this big and we think this is the right

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Speaker 4: amount of money for you, and they start saying, well,

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Speaker 4: we want more, and we said, well, let's talk about

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Speaker 4: what you're doing with it, so let's have that conversation.

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Speaker 4: The things that we focus on when it comes to

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Speaker 4: teaching our kids about money. Number one, we want you

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Speaker 4: to save some of this cash. And we've done all

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Speaker 4: sorts of things over the years. My favorite things that

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Speaker 4: we've done with our kids we've said, once you've saved

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Speaker 4: a whole bunch of cash, we'll actually match it. And

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Speaker 4: we set goals with them, so let's see how fast

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Speaker 4: you can get to one hundred dollars. Once you've got

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Speaker 4: one hundred dollars, we'll actually match that with another hundred.

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Speaker 4: Because they're little, it takes them six months. But if

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Speaker 4: they're really consistent with their savings, and sometimes they save

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Speaker 4: their birthday money, what they're learning is that when you

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Speaker 4: save money, you earn interest, and when you save money,

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Speaker 4: more money comes to you. So we've taught them that

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Speaker 4: instead of blowing it all down at the school, touch

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Speaker 4: shop savings brings more cash and they love looking in

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Speaker 4: the bank and going, oh, look at how much money

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Speaker 4: I've got. This is really really cool.

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Speaker 2: Well for younger kids often having it in the bank,

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Speaker 2: it's really hard to I have that visual. So I

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Speaker 2: used to actually give them a budget book and we

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Speaker 2: would literally write down one, two, three, four or five

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Speaker 2: down the page. And what I loved about this process

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Speaker 2: was setting goals with them. We worked out exactly if

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Speaker 2: they put away a specific amount each week they would save,

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Speaker 2: say sixty dollars in a period of time, we would

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Speaker 2: talk about it and we would kind of increase that

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Speaker 2: goal by just a little bit a stretch goal.

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Speaker 4: Yeah, so see if you can get seventy five dollars

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Speaker 4: by this date instead of sixty, and if you do,

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Speaker 4: we'll give you a bonus.

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Speaker 2: And what that means is that either they're saving birthday

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Speaker 2: money if birthday money is coming in, or they're kind

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Speaker 2: of sealery sacrificing a little bit. They're actually having to

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Speaker 2: put away a little bit more than what they have

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Speaker 2: actually budgeted to put away in order to reach that

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Speaker 2: and that's when that bonus money comes in. So it'd

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Speaker 2: be really exciting watching them and their brain processes as

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Speaker 2: they've kind of looked at it and gone, oh, you

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Speaker 2: know what, We're at the end of the week, and

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Speaker 2: I still actually got fifty cents left over. If I

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Speaker 2: just put that in, every cent counts.

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Speaker 3: Yeah.

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Speaker 4: So let's say we give them five dollars and we

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Speaker 4: say so when they're young, we tell them percentages. Ten

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Speaker 4: percent is a donation. We're going to help other people

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Speaker 4: because we've got a lot and there are some people

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Speaker 4: who don't have nearly as much. That leaves you with

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Speaker 4: four dollars fifty Of that four dollars fifty, we put

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Speaker 4: fifty percent of that into savings, and the other fifty

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Speaker 4: percent is for you to spend, which means that in

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Speaker 4: the end of the end of the month or the

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Speaker 4: end of the quarter, you'll have this much in savings.

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Speaker 4: But if you stretch yourself to this much in savings,

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Speaker 4: guess what we'll match it. We'll give you this much more.

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Speaker 4: And the kids then will be at the shops and

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Speaker 4: they'll be looking at a chocolate bar and thinking, oh,

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Speaker 4: I really want that. But if I spend the money

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Speaker 4: on the chocolate bar. That means that I'm not going

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Speaker 4: to reach the stretch goal that I've got financially, which

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Speaker 4: means I don't earn the bonus cash Mum and Dad

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Speaker 4: are going to give me. And so we're teaching our

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Speaker 4: children to value money versus chocolate.

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Speaker 2: Or well, it's also a lesson in delayed gratification, yes,

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Speaker 2: because well, you know, you can have your chocolate bar now,

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Speaker 2: but if you actually in time, you'll be able to

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Speaker 2: get this, you know, like whether it be a toy

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Speaker 2: that they're working towards or a set of books. Our

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Speaker 2: kids love reading, so whatever it is, it's I can

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Speaker 2: have this small thing. It's kind of the marshmallow experiment. Actually,

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Speaker 2: you know you can have this now, or you hold

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Speaker 2: on just a little bit longer, you can have double.

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Speaker 4: That sounds great, So what if we covered off pocket

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Speaker 4: money shouldn't be for chores. It should just be to

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Speaker 4: teach kids about money. But if you're going to teach

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Speaker 4: them about money, teach them about money, Teach them about saving,

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Speaker 4: teach them about charitable donations, Teach them about what happens

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Speaker 4: when you sacrifice and use self controlled delayed gratification so

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Speaker 4: that you can achieve goals and help them to work

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Speaker 4: towards those goals by going through it every week. Last

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Speaker 4: couple of things that I can think of, make sure

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Speaker 4: that you pay them consistently, so it's every Sunday morning,

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Speaker 4: or is every Monday night, or is every Friday just

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Speaker 4: before the weekend. Work out when you're going to pay

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Speaker 4: them and be consistent about that.

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Speaker 2: One of the things that Scott Pape talks about in

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Speaker 2: his Barefoot Investors for Famili's book is about giving your

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Speaker 2: children jars to go through that process. You know, a

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Speaker 2: saving star, a spending star, and a giving jar. Then

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Speaker 2: you want to make sure that you're giving them the

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Speaker 2: breakdown so it's really easy for them to put money

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Speaker 2: into the different jars.

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Speaker 4: Yeah, you gotta have the coins, You've got to have

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Speaker 4: the actual cash for them. Makes a big difference.

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Speaker 2: But I think the last thing that's really important is

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Speaker 2: just your children are actually going to learn more about money

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Speaker 2: as they watch you.

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Speaker 4: Ah.

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Speaker 2: Yes, you set the example, You set the tone about

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Speaker 2: how money spent. So if you're a scrooge, what are

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Speaker 2: you pointing at me? For gosh? Then it might make

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Speaker 2: sense that a seventeen year old who's getting very excited

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Speaker 2: about getting her license very soon and going on a

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Speaker 2: road trip, might choose to spend her nights in a

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Speaker 2: car so she doesn't have to pay for accommodation.

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Speaker 4: This sounds like a real life scenario.

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Speaker 2: Maybe smokes.

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Speaker 4: This is a really important thing, though. The things that

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Speaker 4: we say about money become our children's internal dialogu or

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Speaker 4: monologue about money. If we say, what do you think

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Speaker 4: money grows on trees around here? Of course it doesn't,

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Speaker 4: then we teach our children scarcity. If we just throw

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Speaker 4: money at stuff about thinking, we teach children that money

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Speaker 4: has no value. We want to be able to have

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Speaker 4: intelligent and intentional conversations with our kids about money, and

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Speaker 4: hopefully the hints and tips that we've given you in

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Speaker 4: this podcast will be helpful. I'm so glad that you

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Speaker 4: shared that the example that we set crucial in what

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Speaker 4: our children learn about money and how it works.

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Speaker 2: Well, it's been a great chat. I'm glad that we

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Speaker 2: got to speak about it.

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Speaker 4: Okay, pocket money. If you have any more questions, let

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Speaker 4: us know. Podcasts at Happy Families dot com dot you

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Speaker 4: another quick reminder pot Pills and Parenting with Paul Dillon

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Speaker 4: and myself Tonight, the webinar. If you haven't gotten one

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Speaker 4: at already Happy Families members you're in. Just make sure

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Speaker 4: that you dive into the membership on time. If you're

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Speaker 4: not a member, you can get all the info on

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Speaker 4: our Facebook page doctor Justin Colson's Happy Families. We really

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Speaker 4: appreciate the work as always of Justin Ruland from Bridge Media.

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Speaker 4: He produces the Happy Families podcast. Our executive producer is

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Speaker 4: Craig Bruce. And if you'd like more info about making

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Speaker 4: your family happier, especially through our Happy Families memberships, you

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Speaker 4: can go to get all the info at happy families

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Speaker 4: dot com dot iuh