Speaker 1Hello and welcome to the How Not to Scrap Your Kids podcast, the bucket-emptying episodes. All about tackling topical subjects in bite-sized chunks, because your time is super precious, or sharing top tips to relieve either your overwhelm or your child's. I'm your host, Dr. Mary Han, psychologist and parenting expert. So, pour yourself a cuppa, find a comfy seat, and enjoy the conversation. Today's episode, pocket money, five benefits you may not have considered, is a really, it's an interesting one, because pocket money often is something that I'm asked about, like, do we give it? Do we not give it? Should we link it to chores? Should we not link it to chores? And I thought, we all know the obvious benefits of pocket money, but there are five that you may not have even considered. They might not even be on your radar. So, if you're sat on the fence as to whether you should give pocket money or you shouldn't give pocket money, this episode will hopefully tip you over that edge and convince you that it is worth doing. Now, I want to start, initially, before I go into these five, to talk about pocket money and address the question that I am asked all of the time, which is about linking it to household chores. Now, I'm voicing my opinion and I'm going to explain my logic and my rationale, but fundamentally, do what works for your family. I have no problem with money being exchanged for what I would call additional tasks, chores, if you want to call them, or jobs, which might be less regular. So, for example, washing the car, collecting the leaves in the garden, shoveling snow, doing a clear out of something. But personally, I'm not a fan of using pocket money in exchange for the regular day-to-day contribution. To the upkeep of the home. And the reason why I don't personally like that is because I believe it dilutes this sense of we're all in it together and we have a sense of contribution because we are all responsible for living and sharing and enjoying this shared space. So, that's kind of my positioning with it. Obviously, if you're doing that already as a family and it works for you, then that's absolutely fine. I guess my view is, I want my children, I've always wanted my children to organise and tidy up their bedrooms, make their beds, bring their laundry down, make good the sitting room after they've used it, either a sofa to watch something or the television or their toys, put those away, because I felt that that's an important part of living day-to-day and that that shouldn't, I shouldn't have to be persuading them to do that or using money to leverage it. I wanted that to be something that they just simply did because they could see the benefit in that contribution, you know, picking up dishes, putting things in the dishwasher, helping unpack, shopping, those sorts of things. And so, that's why I personally have a difficulty in, and I wouldn't do it that way, but I have absolutely no problem in, hey, do you know what, do you fancy earning an extra bit of money? Would you mind washing the car? And those sorts of things. So, let's get that out of the way. And now let's dive into the five. Five benefits that you may not have even considered for pocket money. The first one is this concept of delayed gratification, which you might have heard in a sense of the very famous study by Michelle into the marshmallow, this idea that children could either get one marshmallow immediately, or if they could wait until the researcher got back, undetermined amount of time, then they could get two. So, when our children choose to spend their pocket money on something that requires them to save for it, it's a great way for them to flex that all too important muscle of delayed gratification. And basically, delayed gratification is the ability to defer, put off an immediate reward for something even more rewarding later on. And what we know, and it's not just the studies from Michelle, the marshmallow study, but generally studies have shown and research has shown that what they call it as resistors are often, more self-motivated, persistent, and typically attain higher grades academically, as well as evidencing more self-control, ability to manage impulses, and more social competence. Because you can imagine if you're able to delay gratification, then when it comes to relationships with other people, you're able to exercise that same sort of delay and that immediate reward may be for the benefit of somebody else. So, delayed gratification is a great skill to flex. And actually, when they're dealing with that money day to day, that can be really good. Now, you might be listening to this and you might already be giving pocket money and your child isn't yet flexing that delayed gratification. They're, you know, very impulsive. They get their pocket money and it kind of burns a hole in their purse or wallet until it's spent. But in time, and for the right thing, they will eventually delay, because they'll want something that's even bigger. So, that's number one. Number two is this concept of the opportunity costs, which were, you know, in the financial circles, it's talked about all of the time. But in essence, I think some of the other benefits that I'm going to talk about, and particularly this one, is there's a real benefit to pocket money, to our children having pocket money, in terms of understanding this concept of opportunity cost. And we can amplify that impact by having conversations and unpicking it, so our children understand the decision that they've made and how that relates to this idea of opportunity costs. So, basically, children learn that if they choose one, something to spend their money on, so let's say, I don't know, they're going to buy a toy car with their pocket money, what they're doing is that they're then giving up the chance to buy something else. So, they're basically learning the fundamental economic principle, you know, that applies to time and effort with money, as well as, you know, in terms of the cost. So, I think that's a really important thing to think about in terms of the choices that they might make moving forward in terms of adulthood. So, we can have those conversations with our children afterwards, particularly where, and we've all had this, haven't we? Our child has got their pocket money, and they've gone out to buy something, they bought something, and quite often they've regretted it, you know, maybe there was one or two things that they could have bought, or they could have saved their money for something bigger, but they've decided to blow the money immediately. And actually, it's not ended up being as kind of brilliant as they thought it was going to be. And that's where we can have conversations with our children, and we can have conversations with these sort of quite deep and meaningful conversations with them, obviously, depending on their age and stage of development. But we can talk about this idea of this opportunity cost. That cash, that money gave you options. And one option was to buy the car, for example. One option, another option was to hold on to it, because there was something else that you could have waited for, that you could have saved up money for, or you could have used it for this, or that money might have been used for something else. And so, I think that's a really important thing. And I think that's a really important thing. And I think you two different things. So it's helping them understand that, you know, funds provide an opportunity to buy things, but there comes, there's a cost, because once you've spent it, you then don't have it. But if you hold on to it, what's the opportunity cost that you have on certain things that you might have joy from? So it's helping them kind of understand that there is this dilemma, because that's fundamentally what we want to be teaching them, is that there is no right or wrong help guide the accumulation of wealth, for want of a better word, you know, the principles of, you know, put away a certain amount in your rainy day account, put a certain amount away that you might invest for something in the future, and then spend a certain proportion. And we can have some of those conversations, some of those are kind of the typical things we think of as the benefits of pocket money. But actually, having that real nuanced conversation around opportunity cost, is a really sophisticated way to begin that the economics really, basically of money. So there's the delayed gratification, there's the concept of this opportunity cost. The third one, which you might not have thought about at all, but is a great one, potentially, for those of you listening, thinking, oh, my goodness, me, I've got a child who cannot emotionally regulate. Well, the third thing that can be really helpful that money can teach and pocket money can teach is emotional regulation. Because what they're doing, is they're learning to manage their emotions when they are disappointed when they buy something that isn't quite what they expected it to be. But what they're also learning, you know, from our perspective, when we hold that boundary, when we're saying that our child has pocket money, and that that is how they then make their own choices in terms of what they purchase. And we then hold this very clear line, that that's your budget. And when you have spent it, that we then hold steadfast in the, well, that's your pocket money, you've got another week to wait, or if you give your pocket money monthly, there's another month. And what that does is it helps them over time, don't get me wrong, it's not going to be immediate, but it helps them manage that frustration, and that overwhelm and that upset, when they can't have what they want, when they've made decisions that they regret afterwards. And it helps them work through that. And it builds that trust. builds emotional resilience and they learn to accept and this is a really great way of teaching natural consequences around money, is they learn to accept the consequences for the choices that they have made. And we can really, again, amplify that in the same of the opportunity cost. Let's have those conversations. Obviously, they're in the middle of a meltdown and frustration, but what have you learned from the way that you spent your pocket money? What might you do differently as a result of that? What plans, what things might you put in place to ensure that you don't make that same mistake again, for example? So I think you wouldn't expect it, but pocket money can have a really brilliant impact in terms of helping our children understand on the job how to emotionally regulate and understand on the job the consequences of the choices that they make. And the consequences in both ways, they can make a choice that they deeply regret, or they may make a choice that they are, you know, that they're sort of happier with, even if they're not happy with it. So I think that's a really good point. I think that's a really good point. And I think that's a really good point. Managing a finite allowance helps our children in really practical ways. And it provides also an opening for us as parents to have conversations around differences in household incomes and the concept of fairness and redistribution and inequality. Because our children, often this is one of the things that we sort of feel sometimes when we are in a financially secure situation is that we may well, our children may become slightly introverted. Or maybe they're acting in an entitled way. Because our children, remember, only know the environment in which they've been raised. Unless they're regularly seeing inequality, unless we're having conversations with them about inequality, then our children simply assume that everybody lives in the same way that they live. And that's, you know, that's one of the sort of remarkable things that happens when our children's eyes become opened as they then go to school, and then they begin to have playdates. And so having that sense of pocket money, we can begin to have those conversations around what they have with their allowance, and proportionately to others, and what that then also may well mean as they then go through their own education system and then get jobs, and what that means. And it gives us an opportunity to have conversations around that social conscience, and how we within our family might choose to. And then also helps our children begin to develop a sense of what are the things that are important to them, and where may they, where, you know, they may choose then to have an impact and a contribution, which goes back to this sense of belonging and value. So it just kind of this beautiful kind of snowball effect, because it then allows our children to understand that when our children feel valued. When our children feel valued. When our children feel that fundamentally the world is a better place for having them in it, then that is the foundations to building that sense of confidence and that sense of belonging, and that real true sense of belief within themselves. And it's incredible the value that just those small pennies can have, whether those are pennies or pounds that your child gets in pocket money, how that then develops this language of social conscience, economic inequality, and those consequences.
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