Does giving kids pocket money actually help them?

Yes — giving kids pocket money regularly, whether linked to chores or not, gives them a real advantage. Money habits are hard to build without regular access to money, so pocket money is one of the most effective and underrated financial education tools available to parents.

Will my child value money less if I just give it to them?

That's the main risk with unconditional pocket money. It can be addressed by not increasing pocket money as a child's wants grow, and instead having them earn extra through one-off tasks or by finding their own ways to make money — which teaches them to weigh whether something is really worth the effort before spending.

What's the downside of linking pocket money to chores?

If not handled carefully, kids can start to see chores as optional — something they can opt out of by forgoing the payment. To avoid this, make clear that the chores themselves are non-negotiable, and the pocket money is simply an added incentive, not a fee for an optional service.

Should pocket money be linked to chores?

Q: Should pocket money be linked to chores?

It's a personal choice with two main schools of thought. Some parents don't link pocket money to chores at all, believing kids should see money in a positive light rather than as something tied to tasks or punishment. Others link the two so kids learn that money has to be earned, mirroring adult life. One approach is a middle ground: regular chores are done unpaid as part of being in the family, while non-regular extra jobs (like washing the car or clearing a cupboard) are paid, teaching kids that money is earned through effort beyond baseline responsibilities.

Will Rainey

Aug 22

4 min read

Updated: Aug 29

When it comes to giving pocket money (allowance) to kids, one of the most common questions is "Should pocket money be linked to doing chores?". In this blog, I'll share my thoughts on this. I'll also share my thoughts on linking pocket money to behaviour and grades, as that comes up when talking to parents.

Pocket Money is the most underrated financial education tool

First of all, any parent who is giving their kids pocket money, whether linked to chores or not, is giving their kids a massive advantage in life.

Being good with money is about developing good money habits, if kids aren't getting money regularly, it's very hard to form habits.

Also, pocket money allows kids to make money mistakes early and provides an opportunity for you, as a parent, to talk to them about money.

Linking Pocket Money to Chores

Do you pay your kids to do chores?

There is an argument for simply giving your kids pocket money each week and not linking this to any chores, behaviour or grades. The argument is that kids should see money in a positive light so they grow up wanting to learn and talk about money. If they see it as a potential tool for punishment, i.e., will be restricted, then it can lead to them linking money to negative feelings (which could lead to financial stress).

I understand this argument and applied it with my daughters when they were young (under 10). I wanted them to have some money and make some money decisions and form good money habits. That was my only objective.

Simply giving them pocket money which isn't linked to 'work' opens up the arguments:

"Kids won't value their money" or "They become entitled"

In the adult world, most people have to earn their money. It's not simply given. Therefore, we should help kids realise this. I agree that we should teach kids that money has to be earned. That being said, personally, I don't believe that doing chores is the same as doing work.

My view is that kids should do regular chores without being paid. I feel that doing chores is something they should do as part of the family and something they will have to do in their own home as adults without getting paid.

Chores are part of being a family. Work is something you can choose to do to earn money

The cartoon below is based on a story I heard from a parent, which I found both funny and insightful ...

If we don't link pocket money to regular chores, how do we teach kids that money has to be earned?

The simplest alternative to regaulsr chores is to link pocket money to extra chores to help around the house. This could be something you might otherwise pay someone else to do, but you pay your kids instead. This could be gardening or washing the car. It could be clearing out a cupboard or even cooking the dinner (that one might be a regular chore for some kids already).

For my daughters, we haven't increased their pocket money for a while. Therefore, as their wants / needs have increased, we've tasked them to find ways to earn money. This has been through a combination of negotiating with us at home or looking at selling something.

This has really helped them learn a lot as they have to decide if something they think they want is really worth the effort to pay for it. In some cases, they have taken the effort, other times simply waited and many times decided it's not worth it. I believe that thought process is powerful. Without that, they could end up spending mindlessly and that's where a lot of people get into overspending as adults.

Linking Money to Behaviour and Grades

We don't link money to either behaviour or grades.

Behaviour

Similar to a point I made earlier, I don't want pocket money to be linked to negative feelings, i.e., not used as a form of punishment. I want them to think positively about money (in a world where money is negative for some many people). I feel there are many other punishments I can use if my daughters misbehave.

What was really interesting was my daughters reframe when I asked her if we should take away their pocket money if she misbehaves. She said:

"That would imply you are paying me to behave well"

I had honestly never thought of it like that but it is true.

Grades

There are two reasons I don't link pocket money or financial incentives to my daughters' grades:

I want them to be self-motivated. If they don't want to work hard then that's their choice and the outcomes they will own. I talk to them a lot about why they should work hard and the benefits of doing so but ultimately I want them to be accountable for their grades and develop self-drive.
More importantly, financial rewards for grades can cause unfairness between my daughters. Outcomes aren't just about hard work. If one is more gifted than another in a subject, they not only benefit from having this gift but also get more money. This can have a negative impact on the other child.

Just my personal view

The above is my personal view regarding pocket money. Other people will have different opinions. The key is to know the potential downsides of whichever approach you adopt and look to address that with your kids.

For example, if you do link pocket money to chores, then make sure you highlight that chores are something they have to do and that the pocket money is just an incentive. Chores aren't optional. If you aren't linking pocket money to anything, then make sure you share that they will need to earn money as they are older and highlight how much work might be required to get what they have been given.

As mentioned at the start, pocket money is an amazing financial education tool. If money is like seeds, then allowing them to have some seeds regularly can help them form great money habits which means they can start growing their financial forests.

Make sure you subscribe as I'll be writing and sharing more pocket-money-related blogs over the coming weeks. Including:

How much pocket money should I give my kids?
When Pocket Money goes wrong!

Thanks for reading,

Will

p.s., To help your kids use their money wisely, grab them a copy of Grandpa's Fortune Fables. To help your kids keep hold of their money, grab them a copy of Frankie Fortune.