Many children can learn the of money by receiving a weekly or monthly amount of pocket money. Parents often give their children an amount of money that they may spend as they wish. This gives the children a of independence and lets them learn from experience at an age when financial mistakes are not very costly.

A child may receive their pocket money each week or each month. The amount is not so important, but parents should make clear what, if anything, the child is expected to with the money.

At first, young children may spend all of their pocket money soon after they receive it. If they do this, they’ll learn the hard way that spending must be done within . Parents should not give more money until the next of money is to be paid.

Older children may be responsible enough to larger costs like those for clothing. The object is to show young people that managing money demands choices between spending and saving.

The amount you give may become more complicated as your child gets older and starts asking his or her friends how much they receive. The friends may to get much more than your child does. If possible, have a quiet chat with other parents to establish the going , and then decide what you think is reasonable.

Many people say it is not a good idea to pay your child for work around the home. These jobs are a normal part of family life. Paying children to do extra chores, however, can be . It can even provide an understanding of how a business .

As your children get older, they may want more expensive extras, such as sports shoes, a computer game or an Mp3 player. You could suggest you'll pay some of the money if they contribute three or four weeks' pocket money the cost.

Pocket money gives children a chance to experience three important things they can do with money. They can it in the form of gifts or giving to charitable organizations. They can spend it by buying things they want. Or they can save it. Saving helps children understand that costly require sacrifice, and that you have to costs and plan for the future.

Encouraging children to save part of their money can also to future saving and investing. Many banks offer free savings accounts for young people with small amounts of money. A bank account is an excellent way to show children the power of compound interest. Compounding works by paying interest on interest. For example, one euro at two percent interest for two years will earn two cents in the first year. In the second year, the money will earn two percent of one euro and two cents. That may not seem like a lot. But an investment that earns eight percent compounded yearly will increase one hundred percent in value in about nine years.