March 3, 2025 • 15 mins
Should pocket money be linked to chores? What about paying for good grades? From savings percentages to spending rules, discover why traditional pocket money wisdom might be wrong, and learn a value-based approach that actually works. Plus, find out why regular money conversations matter more than any system you choose.
Quote of the Episode: "Money is just a store of value, and the conversation really should move away from money to how am I adding value in the world?"
Key Insights:
- Pocket money should be independent of chores.
- Paying for grades can decrease intrinsic motivation.
- The Three S's: Spend, Save, Support.
- Financial conversations matter more than systems.
- Value creation should precede money focus.
- Forced savings can build positive habits.
- Regular money discussions enhance financial literacy
- Stretch goals encourage saving behaviour
Resources Mentioned:
- The Psychology of Money by Morgan Housel [affiliate link]
- Happy Families newsletter
- Happy Families
Action Steps for Parents:
- Separate pocket money from household responsibilities.
- Implement the Three S's system (Spend, Save, Support).
- Have regular conversations about money and value creation.
- Set achievable saving goals with matching incentives.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Pocket money, how much? How often is it LinkedIn chores?
Our views have evolved on pocket money. Today we will
answer as many questions as we possibly can to help
you to get the pocket money mixed right, because it's
one of those perennial parenting problems and that's what we do.
We solve real parenting solutions every day. Welcome to the
(00:26):
Happy Families Podcast, Australia's most downloaded parenting podcast. I'm Justin.
I'm here with Kylie, my wife from under our six kids.
Every Tuesday on the podcast, we answer your tricky questions
about family and relations ships and wellbeing and screens and
discipline and the list goes on. If you would like
to submit your own tricky question, please jump onto our website,
(00:46):
Happy families dot com dot you click the button that
says record and start talking. It's a super simple system.
If that doesn't work for you, just send us a
voice note podcasts at happy families dot com dot you.
Now for today is tricky question?
Speaker 2 (01:01):
Hi Justin and Kylie, It's Elise here.
Speaker 3 (01:04):
Really simple question for you.
Speaker 2 (01:06):
I'm just struggling to work out how.
Speaker 3 (01:07):
To do pocket money and whether we should pay for
chores or not.
Speaker 1 (01:11):
Do you have any advice Kyler. To start the podcast today,
We're going to play a game. It's called yes and No.
Here are the rules. You must answer a whole bunch
of questions that I've got for you, and all you're
allowed to do is say yes or no. We want
to make this easy for any parent who's trying to
work out how to deal with the pocket money thing.
Are you ready for question number one?
Speaker 3 (01:31):
What if I don't?
Speaker 2 (01:33):
Yes?
Speaker 1 (01:33):
That wasn't a yes or a no. I just asked
you a question. Are you ready and yes? You've already
blown it? Here we go? Okay? Question number one? Should
pocket money be a right rather than something earned through chores?
Speaker 3 (01:46):
I don't like your wording. I can't answer.
Speaker 1 (01:49):
Yes or no? Should pocket money be a right rather
than something earned through chores?
Speaker 3 (01:54):
Sure? Yes?
Speaker 1 (01:55):
Yes, so pocket money's a right? Yes, you don't earn
it through chores?
Speaker 3 (01:59):
No?
Speaker 1 (02:00):
Okay? Would I love? How hard? This is the easy question?
Would you continue giving pocket money if our children were
not keeping their room tidy?
Speaker 3 (02:10):
Yes?
Speaker 1 (02:11):
Through grid teeth? Would you give our child double pocket
money if they got straight a's no? Should we just
out annoyed? Should we give it?
Speaker 3 (02:20):
I feel like I'm in an exam. You're just trusting
me out.
Speaker 1 (02:23):
Should we increase pocket money automatically each year on our
children's birthdays?
Speaker 3 (02:27):
No?
Speaker 1 (02:28):
Would you? I thought we were on the same page.
You've just You've just gone from where I was going
to I think every okay. Would you stop pocket money
as a punishment for bad behavior?
Speaker 3 (02:38):
No?
Speaker 1 (02:38):
And the last one. Should we require our kids to
save a percentage of their pocket money as savings?
Speaker 3 (02:44):
Yes?
Speaker 1 (02:44):
All right, now, I've got a couple of fun ones
before we dive into the details. Have you ever borrowed
money from one of our children's piggybanks?
Speaker 3 (02:52):
Oh? Maybe, back in the early days. Yes, I may have.
Speaker 1 (02:55):
How bad it's that. Have you ever pretended not to
have change just to avoid paying the kids pocket money?
Speaker 3 (02:59):
No? Have you? Actually? It was one of my favorite
things to do to sit down on a Sunday night
with the kids and pull out the money tin.
Speaker 1 (03:09):
Have you ever found pocket money in the washing machine
and kept it?
Speaker 3 (03:13):
I don't know if it was pocket money, but I
keep everything that I found in the washing machine.
Speaker 1 (03:17):
Have you ever blamed me when you forgot to give
the kids pocket money?
Speaker 3 (03:20):
Oh?
Speaker 1 (03:20):
Yeah, all the time. Oh my goodness. All right, today
we answer the big questions, the tricky questions, the sticky
questions around pocket money. Let's unpack a couple of these.
First off, should pocket money be a right rather than
something earned through chores? You said pocket money should be
independent of chores. You just get pocket money, full stop.
End of story. Let's unpack that.
Speaker 3 (03:40):
Well, the only reason I stumbled on that one was
because I don't believe it's a right that our children
get pocket money. I actually think it's a privilege.
Speaker 1 (03:46):
Yes, So if you're a privileged position where you can
afford to pay the kids pocket money, you should do
it and not link it to them completing stuff in
the house. That's exactly right. All right, Let's explain why
we've talked about this. You and I have been raising
kids for twenty five plus years. Now, why did we
land there? Because it's very different to what a lot
of well known experts, including Scott Plaid Barefoot investor, would say.
Speaker 3 (04:07):
Being part of a team, or in this case, part
of a family, requires a team effort for things to
function and flow properly. It's actually a privilege to be
a part of that team, to be a part of
that family, and things function when everybody plays a part.
Everybody takes a part, and everybody takes responsibility for how
(04:28):
things function.
Speaker 1 (04:29):
That means that they bring their washing into the room,
it means to help with the dishes. It means that
they're involved in assisting in the house. That's part you
do is part of a family. But if that's the case,
what's the purpose of the pocket money.
Speaker 3 (04:43):
Pocket money is about teaching our children financial literacy.
Speaker 1 (04:47):
Great, great, so this is something that we're going to
discuss further in a moment. But chores are what you
do because you're part of the family. Receiving cash from
the parents is about teaching you about money and how
it works things. I know some people say, well money
works as in you get it for doing stuff, But
in this case, we're going to make the argument alternatively.
(05:07):
Our first pocket money rule is that money comes independent
of responsibilities. The second one was that we would continue
giving pocket money if our child wasn't keeping their room tidy,
which links directly with what we've just talked about. If
your child's not keeping their room tidy, threatening them with
no more pocket money is not going to start me
motivate better behavior in terms of room tidy.
Speaker 3 (05:30):
Well, it just becomes a bribe, it becomes a carrot,
it becomes a punishment or a reward for being part
of the family. Yet again it doesn't It actually is
counterproductive to what we're actually trying to achieve.
Speaker 1 (05:41):
And you know what happens as well, is you start
to get in the case of the kids and say, well,
you're just not going to get any pocket money, and
the kids have a bit of a rent and rave
they get upset because they need money. But then they
don't get the money, and you know what they do,
They start winging because I want money. And then you
try to say, well, if you kept your room tidy,
and it just leads to meltdones and they become less motivated,
not more motivated, tight of the room moreover, and I
think this is probably the more important thing. Research shows
(06:05):
that when you pay somebody for doing something, their motivation
for doing it increases while they're being paid. But once
you take away the carrot of the coins, once you
take away the pocket money, once you take away the incentive,
their motivation drops below where it had previously been.
Speaker 3 (06:21):
But also, over a period of time, whatever the dollar
amount is that you've placed value on that job, it
no longer ceases to be enticing. So if I'm giving
kids five dollars to clean the car, after a while,
they'll go, you know what, I actually value the half
an hour that takes me to clean more than I
(06:42):
value the five dollars.
Speaker 1 (06:43):
I think sitting on the couch is more fun than cleaning.
Speaker 3 (06:46):
And that's why when you get frustrated your kids, they're
staring at the TV and they don't want to do
the jobs you've asked them. Even though it has a
money value to it, the currency no longer is enough
to get them out the door.
Speaker 1 (06:58):
We both agreed that we would not pay our children
to get a's. This is a contentious one. So many
parents pay their kids bonus if they get a's on
their report card, a's and their exams. We don't do this,
and the central reason is that we want our children
to learn, because learning is great. And apart from that,
there's a stick in the carrot. That is, if you
don't get the A, you actually feel like you've been punished.
(07:21):
It's true that you can have some valuable conversations with
the kids and they can maybe become more motivated to
get the cash. But I don't want my kids to
be learning because it's about dollars. I want them to
be learning because learning is great. We disagreed on whether
or not we should increase pocket money automatically each year
on the birthday.
Speaker 3 (07:37):
The reason I say no because it's not an automatic
We would sit down with our kids each year and
have a conversation with them.
Speaker 1 (07:45):
He's say things to make But they always went up
on their birthdays.
Speaker 3 (07:48):
No, they did, but it wasn't automatic because we talked
to them about it and we discussed with them what
they thought was a fair increase for them. So it
wasn't an automatic decision and wasn't arbitrary on our end.
There actually was some pretty heavy duty negotiations going on
in those conversations.
Speaker 1 (08:05):
High stakes bidding for sheep farms. The last one that
we did both agree on should we require our kids
to save a percentage of their pocket money. We have
three SSA's that explain what we encourage our kids to
do with their pocket money.
Speaker 3 (08:17):
Spend, save, and support.
Speaker 1 (08:19):
So spend is obviously have fun with this kids, like
filly boots to whatever you want. Save.
Speaker 3 (08:24):
We're saving for the future.
Speaker 1 (08:26):
Yep, it might be a car, it might be we're
going to the Echa or the Royal Show or whatever
it is that you call it in your hometown or city.
Or we're going on a holiday as a family leader
in the year, and you're going to want spending money
because we're on the Gold Coast and you can go
to the theme parks. And then support is pick.
Speaker 3 (08:43):
A charity, help them to recognize that there are other
people who are less fortunate than themselves and that they
can give a small portion of what they're receiving to
bless and benefit others.
Speaker 1 (08:57):
Yeah, so we normally encourage ten percent for charity and support,
and we pretty much would look at about fifty percent
for savings, especially for younger kids, because their expenses are
so low, and that would leave them with a round
about forty percent that they can will save a little
bit for something like a book or a toy that
matters to them, but also that they can fritter away
on the things that they want, like some lollies down
(09:17):
at the local shop or something like that.
Speaker 3 (09:19):
So, because we chose such a high percentage for savings,
fifty percent, that's huge as far as a kid's concerned.
That actually impacted the amount that we were giving them
to start with. So we almost doubled what they would
normally get in order to save that percentage.
Speaker 1 (09:37):
Yeah, we really wanted them to learn the excitement that
comes from seeing your bank balance go up. Yeah, kinds
of like.
Speaker 3 (09:43):
A salary sacrifice kind of concept that they were learning,
you know, us three and four and five year olds.
Speaker 1 (09:48):
Something else that we did, and I'll just mention it
quickly because we're out of time. We would set a
goal with the kids, so we'd say, this is how
much you could set aside, and this is how much
you'll end up with at the end of the month.
But if you set aside a little bit extra up
at this amount, and guess what, if you can reach that,
then we will bonus you. We'll give you that amount
as well. So let's say it was fifteen dollars extra
(10:09):
by saving really hard, we'd match that bonus fifteen dollars.
We wouldn't give them the whole level. We'd matched the
fifteen dollars. Kind of sentence broke, but it was really exciting.
The kids love the progress. Okay, we've changed the way
we do pocket money these days. After break, we're going
to tell you.
Speaker 4 (10:22):
How today we're talking about pocket money and well things
have changed with six kids across now twenty five plus years.
Speaker 1 (10:37):
We used to be really really big on how we
did pocket money and all of the things that we've
shared with you just now explain that. But we do
things differently with our last couple of kids who are
still young enough to receive pocket money. Let's walk you
through that fairly quickly.
Speaker 3 (10:51):
So previously we would sit down with them once a
week with their own pocket money budgeting.
Speaker 1 (10:56):
Book, every Sunday morning or Sunday night, and they would.
Speaker 3 (10:59):
Have the three categories listed and what the breakdown was
as you would in a normal household budget. They would
then have a graph that would actually show that they
could mark or for every dollar they saved or every
two dollars depending on their age group.
Speaker 1 (11:13):
Literally watching their progress, yes.
Speaker 3 (11:15):
So they could actually see it. And then the other
reason that the stretch goal was so important was because
sometimes they had no need to spend their money, but
then it would sit there and it would pile up,
and then they'd go to the shops and they'd just
fritter it away because they had it. And so we
brought in the stretch goal because it was like, well,
you've got all this money left over let's add this
(11:35):
to the bank account, because that's going to get you
to your goal quicker. So on top of the monthly
stretch goal, there was a yearly stretch goal. It's really
important to break it down and have really small, achievable goals.
Speaker 1 (11:48):
Sometimes.
Speaker 3 (11:49):
I don't think it was complicated. I think they really
got excited. They did, and our big girls specifically have
got beautiful bank accounts as a result that. Let's just
be really clear. They were not allowed to touch, and
I'm not allowed to touch until they finish high school.
Speaker 1 (12:03):
Yep, so we've gotten kind of lazy. We don't do
this at all with our younger kids. I wish we did.
We probably need to start it again, especially with Emily
because she's still only ten and there's a few years
of that. The other kids are big enough that they
can go and get a job if they choose to,
and so that becomes their issue. Another thing, we don't
pay the kids any extra pocket money once they get
to fifteen. It stays on a really small amount. So
if they want extra cash, they either go get a job,
(12:25):
or if it doesn't fit with their other goals and aspirations,
we give them extra work around the house. The kind
of stuff where if I don't want to do it,
I've probably got to pay someone to do it, Or
if you don't want to do it, we'd have to
pay someone. So the mowing of the lawn or even
the washing of the cars, that stuff that wouldn't fall
under normal family responsibilities for the kids, So we do
(12:46):
pay them a little bonus for that, and that's how
they can earn some extra cash. Last thing that I
want to highlight is the importance of regular money conversations.
The Psychology of Money by Morgan House or in fact,
every podcast I've ever listened to says if you want
your kids to be financially literally, you've got to talk
about finances a lot and help them to find other
resources and outlets to learn about money as well. I
(13:06):
found this and shadded in our recent Happy Families newsletter.
Speaker 2 (13:10):
The number one strategy of the top hundred families in
the world. Yes, okay, it's teach your kids to create
value first, not money, because money is a store of value.
Speaker 1 (13:18):
You have to go back to first principles.
Speaker 2 (13:20):
If you focus on value creation, material value, what you
create and produce in the world solving problems. Financial reward
is the reward of that emotional value, good friendships, how
you think, how you feel, spiritual value, how you love,
how you live mindset, lifting me, lifting you up above
your issues to a higher calling to God, getting out
of your ego, and like, that's spiritual value. Yes, So
(13:42):
if we can teach our children, hey, we're going to
be value hunters in this whole, that is the number
one greatest asset you could ever give them. It's an
unfair advantage for the rest of their life.
Speaker 1 (13:51):
So I love this because it highlights that money is
just a store of value, and the conversation really should
move away from money to how am I adding value
in the world, Because the more I add value, the
more things will actually come to me. Not that I'm
trying to do it transactionally because I want things. I mean.
He talks about emotions and that brings better friendships. He
talks about spiritual value and how that lifts you to
(14:12):
a higher plan and you can serve others and lift
others as well. And the financial aspect of it is there.
The regular conversations about money probably matter more than anything
else we've discussed today in terms of the mechanics of
pocket money.
Speaker 3 (14:26):
Over the years our conversations around money. The way we
choose to remunerate the children has changed so much, But
ultimately the most important part of everything that we've done
is having those conversations with your kids, teaching them what
it means to be financially literate, helping them to save
(14:50):
for the future and delay gratification and support and help
others and add value to the world.
Speaker 1 (14:59):
Yeah, couldn't have said it better myself. It's about value.
It's about having the conversations. I love that you're through
and delayed gratifications so important. The take home message is
have the conversations regularly. That's more important than anything else.
If you'd like to submit a tricky question, please send
us a voice note. Podcasts at happy families dot com
(15:19):
dot a you. The Happy Families podcast is produced by
Justin Rulan from Bridge Media. For more information and more
resources about making your family happy, visit us at happy
families dot com dot a you.
Pocket money, how much? How often is it LinkedIn chores?
Our views have evolved on pocket money. Today we will
answer as many questions as we possibly can to help
you to get the pocket money mixed right, because it's
one of those perennial parenting problems and that's what we do.
We solve real parenting solutions every day. Welcome to the
(00:26):
Happy Families Podcast, Australia's most downloaded parenting podcast. I'm Justin.
I'm here with Kylie, my wife from under our six kids.
Every Tuesday on the podcast, we answer your tricky questions
about family and relations ships and wellbeing and screens and
discipline and the list goes on. If you would like
to submit your own tricky question, please jump onto our website,
(00:46):
Happy families dot com dot you click the button that
says record and start talking. It's a super simple system.
If that doesn't work for you, just send us a
voice note podcasts at happy families dot com dot you.
Now for today is tricky question?
Speaker 2 (01:01):
Hi Justin and Kylie, It's Elise here.
Speaker 3 (01:04):
Really simple question for you.
Speaker 2 (01:06):
I'm just struggling to work out how.
Speaker 3 (01:07):
To do pocket money and whether we should pay for
chores or not.
Speaker 1 (01:11):
Do you have any advice Kyler. To start the podcast today,
We're going to play a game. It's called yes and No.
Here are the rules. You must answer a whole bunch
of questions that I've got for you, and all you're
allowed to do is say yes or no. We want
to make this easy for any parent who's trying to
work out how to deal with the pocket money thing.
Are you ready for question number one?
Speaker 3 (01:31):
What if I don't?
Speaker 2 (01:33):
Yes?
Speaker 1 (01:33):
That wasn't a yes or a no. I just asked
you a question. Are you ready and yes? You've already
blown it? Here we go? Okay? Question number one? Should
pocket money be a right rather than something earned through chores?
Speaker 3 (01:46):
I don't like your wording. I can't answer.
Speaker 1 (01:49):
Yes or no? Should pocket money be a right rather
than something earned through chores?
Speaker 3 (01:54):
Sure? Yes?
Speaker 1 (01:55):
Yes, so pocket money's a right? Yes, you don't earn
it through chores?
Speaker 3 (01:59):
No?
Speaker 1 (02:00):
Okay? Would I love? How hard? This is the easy question?
Would you continue giving pocket money if our children were
not keeping their room tidy?
Speaker 3 (02:10):
Yes?
Speaker 1 (02:11):
Through grid teeth? Would you give our child double pocket
money if they got straight a's no? Should we just
out annoyed? Should we give it?
Speaker 3 (02:20):
I feel like I'm in an exam. You're just trusting
me out.
Speaker 1 (02:23):
Should we increase pocket money automatically each year on our
children's birthdays?
Speaker 3 (02:27):
No?
Speaker 1 (02:28):
Would you? I thought we were on the same page.
You've just You've just gone from where I was going
to I think every okay. Would you stop pocket money
as a punishment for bad behavior?
Speaker 3 (02:38):
No?
Speaker 1 (02:38):
And the last one. Should we require our kids to
save a percentage of their pocket money as savings?
Speaker 3 (02:44):
Yes?
Speaker 1 (02:44):
All right, now, I've got a couple of fun ones
before we dive into the details. Have you ever borrowed
money from one of our children's piggybanks?
Speaker 3 (02:52):
Oh? Maybe, back in the early days. Yes, I may have.
Speaker 1 (02:55):
How bad it's that. Have you ever pretended not to
have change just to avoid paying the kids pocket money?
Speaker 3 (02:59):
No? Have you? Actually? It was one of my favorite
things to do to sit down on a Sunday night
with the kids and pull out the money tin.
Speaker 1 (03:09):
Have you ever found pocket money in the washing machine
and kept it?
Speaker 3 (03:13):
I don't know if it was pocket money, but I
keep everything that I found in the washing machine.
Speaker 1 (03:17):
Have you ever blamed me when you forgot to give
the kids pocket money?
Speaker 3 (03:20):
Oh?
Speaker 1 (03:20):
Yeah, all the time. Oh my goodness. All right, today
we answer the big questions, the tricky questions, the sticky
questions around pocket money. Let's unpack a couple of these.
First off, should pocket money be a right rather than
something earned through chores? You said pocket money should be
independent of chores. You just get pocket money, full stop.
End of story. Let's unpack that.
Speaker 3 (03:40):
Well, the only reason I stumbled on that one was
because I don't believe it's a right that our children
get pocket money. I actually think it's a privilege.
Speaker 1 (03:46):
Yes, So if you're a privileged position where you can
afford to pay the kids pocket money, you should do
it and not link it to them completing stuff in
the house. That's exactly right. All right, Let's explain why
we've talked about this. You and I have been raising
kids for twenty five plus years. Now, why did we
land there? Because it's very different to what a lot
of well known experts, including Scott Plaid Barefoot investor, would say.
Speaker 3 (04:07):
Being part of a team, or in this case, part
of a family, requires a team effort for things to
function and flow properly. It's actually a privilege to be
a part of that team, to be a part of
that family, and things function when everybody plays a part.
Everybody takes a part, and everybody takes responsibility for how
(04:28):
things function.
Speaker 1 (04:29):
That means that they bring their washing into the room,
it means to help with the dishes. It means that
they're involved in assisting in the house. That's part you
do is part of a family. But if that's the case,
what's the purpose of the pocket money.
Speaker 3 (04:43):
Pocket money is about teaching our children financial literacy.
Speaker 1 (04:47):
Great, great, so this is something that we're going to
discuss further in a moment. But chores are what you
do because you're part of the family. Receiving cash from
the parents is about teaching you about money and how
it works things. I know some people say, well money
works as in you get it for doing stuff, But
in this case, we're going to make the argument alternatively.
(05:07):
Our first pocket money rule is that money comes independent
of responsibilities. The second one was that we would continue
giving pocket money if our child wasn't keeping their room tidy,
which links directly with what we've just talked about. If
your child's not keeping their room tidy, threatening them with
no more pocket money is not going to start me
motivate better behavior in terms of room tidy.
Speaker 3 (05:30):
Well, it just becomes a bribe, it becomes a carrot,
it becomes a punishment or a reward for being part
of the family. Yet again it doesn't It actually is
counterproductive to what we're actually trying to achieve.
Speaker 1 (05:41):
And you know what happens as well, is you start
to get in the case of the kids and say, well,
you're just not going to get any pocket money, and
the kids have a bit of a rent and rave
they get upset because they need money. But then they
don't get the money, and you know what they do,
They start winging because I want money. And then you
try to say, well, if you kept your room tidy,
and it just leads to meltdones and they become less motivated,
not more motivated, tight of the room moreover, and I
think this is probably the more important thing. Research shows
(06:05):
that when you pay somebody for doing something, their motivation
for doing it increases while they're being paid. But once
you take away the carrot of the coins, once you
take away the pocket money, once you take away the incentive,
their motivation drops below where it had previously been.
Speaker 3 (06:21):
But also, over a period of time, whatever the dollar
amount is that you've placed value on that job, it
no longer ceases to be enticing. So if I'm giving
kids five dollars to clean the car, after a while,
they'll go, you know what, I actually value the half
an hour that takes me to clean more than I
(06:42):
value the five dollars.
Speaker 1 (06:43):
I think sitting on the couch is more fun than cleaning.
Speaker 3 (06:46):
And that's why when you get frustrated your kids, they're
staring at the TV and they don't want to do
the jobs you've asked them. Even though it has a
money value to it, the currency no longer is enough
to get them out the door.
Speaker 1 (06:58):
We both agreed that we would not pay our children
to get a's. This is a contentious one. So many
parents pay their kids bonus if they get a's on
their report card, a's and their exams. We don't do this,
and the central reason is that we want our children
to learn, because learning is great. And apart from that,
there's a stick in the carrot. That is, if you
don't get the A, you actually feel like you've been punished.
(07:21):
It's true that you can have some valuable conversations with
the kids and they can maybe become more motivated to
get the cash. But I don't want my kids to
be learning because it's about dollars. I want them to
be learning because learning is great. We disagreed on whether
or not we should increase pocket money automatically each year
on the birthday.
Speaker 3 (07:37):
The reason I say no because it's not an automatic
We would sit down with our kids each year and
have a conversation with them.
Speaker 1 (07:45):
He's say things to make But they always went up
on their birthdays.
Speaker 3 (07:48):
No, they did, but it wasn't automatic because we talked
to them about it and we discussed with them what
they thought was a fair increase for them. So it
wasn't an automatic decision and wasn't arbitrary on our end.
There actually was some pretty heavy duty negotiations going on
in those conversations.
Speaker 1 (08:05):
High stakes bidding for sheep farms. The last one that
we did both agree on should we require our kids
to save a percentage of their pocket money. We have
three SSA's that explain what we encourage our kids to
do with their pocket money.
Speaker 3 (08:17):
Spend, save, and support.
Speaker 1 (08:19):
So spend is obviously have fun with this kids, like
filly boots to whatever you want. Save.
Speaker 3 (08:24):
We're saving for the future.
Speaker 1 (08:26):
Yep, it might be a car, it might be we're
going to the Echa or the Royal Show or whatever
it is that you call it in your hometown or city.
Or we're going on a holiday as a family leader
in the year, and you're going to want spending money
because we're on the Gold Coast and you can go
to the theme parks. And then support is pick.
Speaker 3 (08:43):
A charity, help them to recognize that there are other
people who are less fortunate than themselves and that they
can give a small portion of what they're receiving to
bless and benefit others.
Speaker 1 (08:57):
Yeah, so we normally encourage ten percent for charity and support,
and we pretty much would look at about fifty percent
for savings, especially for younger kids, because their expenses are
so low, and that would leave them with a round
about forty percent that they can will save a little
bit for something like a book or a toy that
matters to them, but also that they can fritter away
on the things that they want, like some lollies down
(09:17):
at the local shop or something like that.
Speaker 3 (09:19):
So, because we chose such a high percentage for savings,
fifty percent, that's huge as far as a kid's concerned.
That actually impacted the amount that we were giving them
to start with. So we almost doubled what they would
normally get in order to save that percentage.
Speaker 1 (09:37):
Yeah, we really wanted them to learn the excitement that
comes from seeing your bank balance go up. Yeah, kinds
of like.
Speaker 3 (09:43):
A salary sacrifice kind of concept that they were learning,
you know, us three and four and five year olds.
Speaker 1 (09:48):
Something else that we did, and I'll just mention it
quickly because we're out of time. We would set a
goal with the kids, so we'd say, this is how
much you could set aside, and this is how much
you'll end up with at the end of the month.
But if you set aside a little bit extra up
at this amount, and guess what, if you can reach that,
then we will bonus you. We'll give you that amount
as well. So let's say it was fifteen dollars extra
(10:09):
by saving really hard, we'd match that bonus fifteen dollars.
We wouldn't give them the whole level. We'd matched the
fifteen dollars. Kind of sentence broke, but it was really exciting.
The kids love the progress. Okay, we've changed the way
we do pocket money these days. After break, we're going
to tell you.
Speaker 4 (10:22):
How today we're talking about pocket money and well things
have changed with six kids across now twenty five plus years.
Speaker 1 (10:37):
We used to be really really big on how we
did pocket money and all of the things that we've
shared with you just now explain that. But we do
things differently with our last couple of kids who are
still young enough to receive pocket money. Let's walk you
through that fairly quickly.
Speaker 3 (10:51):
So previously we would sit down with them once a
week with their own pocket money budgeting.
Speaker 1 (10:56):
Book, every Sunday morning or Sunday night, and they would.
Speaker 3 (10:59):
Have the three categories listed and what the breakdown was
as you would in a normal household budget. They would
then have a graph that would actually show that they
could mark or for every dollar they saved or every
two dollars depending on their age group.
Speaker 1 (11:13):
Literally watching their progress, yes.
Speaker 3 (11:15):
So they could actually see it. And then the other
reason that the stretch goal was so important was because
sometimes they had no need to spend their money, but
then it would sit there and it would pile up,
and then they'd go to the shops and they'd just
fritter it away because they had it. And so we
brought in the stretch goal because it was like, well,
you've got all this money left over let's add this
(11:35):
to the bank account, because that's going to get you
to your goal quicker. So on top of the monthly
stretch goal, there was a yearly stretch goal. It's really
important to break it down and have really small, achievable goals.
Speaker 1 (11:48):
Sometimes.
Speaker 3 (11:49):
I don't think it was complicated. I think they really
got excited. They did, and our big girls specifically have
got beautiful bank accounts as a result that. Let's just
be really clear. They were not allowed to touch, and
I'm not allowed to touch until they finish high school.
Speaker 1 (12:03):
Yep, so we've gotten kind of lazy. We don't do
this at all with our younger kids. I wish we did.
We probably need to start it again, especially with Emily
because she's still only ten and there's a few years
of that. The other kids are big enough that they
can go and get a job if they choose to,
and so that becomes their issue. Another thing, we don't
pay the kids any extra pocket money once they get
to fifteen. It stays on a really small amount. So
if they want extra cash, they either go get a job,
(12:25):
or if it doesn't fit with their other goals and aspirations,
we give them extra work around the house. The kind
of stuff where if I don't want to do it,
I've probably got to pay someone to do it, Or
if you don't want to do it, we'd have to
pay someone. So the mowing of the lawn or even
the washing of the cars, that stuff that wouldn't fall
under normal family responsibilities for the kids, So we do
(12:46):
pay them a little bonus for that, and that's how
they can earn some extra cash. Last thing that I
want to highlight is the importance of regular money conversations.
The Psychology of Money by Morgan House or in fact,
every podcast I've ever listened to says if you want
your kids to be financially literally, you've got to talk
about finances a lot and help them to find other
resources and outlets to learn about money as well. I
(13:06):
found this and shadded in our recent Happy Families newsletter.
Speaker 2 (13:10):
The number one strategy of the top hundred families in
the world. Yes, okay, it's teach your kids to create
value first, not money, because money is a store of value.
Speaker 1 (13:18):
You have to go back to first principles.
Speaker 2 (13:20):
If you focus on value creation, material value, what you
create and produce in the world solving problems. Financial reward
is the reward of that emotional value, good friendships, how
you think, how you feel, spiritual value, how you love,
how you live mindset, lifting me, lifting you up above
your issues to a higher calling to God, getting out
of your ego, and like, that's spiritual value. Yes, So
(13:42):
if we can teach our children, hey, we're going to
be value hunters in this whole, that is the number
one greatest asset you could ever give them. It's an
unfair advantage for the rest of their life.
Speaker 1 (13:51):
So I love this because it highlights that money is
just a store of value, and the conversation really should
move away from money to how am I adding value
in the world, Because the more I add value, the
more things will actually come to me. Not that I'm
trying to do it transactionally because I want things. I mean.
He talks about emotions and that brings better friendships. He
talks about spiritual value and how that lifts you to
(14:12):
a higher plan and you can serve others and lift
others as well. And the financial aspect of it is there.
The regular conversations about money probably matter more than anything
else we've discussed today in terms of the mechanics of
pocket money.
Speaker 3 (14:26):
Over the years our conversations around money. The way we
choose to remunerate the children has changed so much, But
ultimately the most important part of everything that we've done
is having those conversations with your kids, teaching them what
it means to be financially literate, helping them to save
(14:50):
for the future and delay gratification and support and help
others and add value to the world.
Speaker 1 (14:59):
Yeah, couldn't have said it better myself. It's about value.
It's about having the conversations. I love that you're through
and delayed gratifications so important. The take home message is
have the conversations regularly. That's more important than anything else.
If you'd like to submit a tricky question, please send
us a voice note. Podcasts at happy families dot com
(15:19):
dot a you. The Happy Families podcast is produced by
Justin Rulan from Bridge Media. For more information and more
resources about making your family happy, visit us at happy
families dot com dot a you.
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