As the school holidays begin, where will the kids' money come from?
As the school holidays begin, where will the kids’ money come from?
Almost 40 per cent of parents do not give their eldest child any pocket money or allowance, encouraging them instead to earn their own spending money, according to research from Isa and savings provider Scottish Friendly.
Calum Bennie at Scottish Friendly said: " It seems that many parents, by not giving their children an allowance encouraging their children to learn the value of money by going out and working for themselves. Having financial independence and an appreciation of the world of work will have a positive long-term impact on a child and increase the likelihood that they will grow up with a good understanding of money."
He said a recent academic study suggested that the more allowance or pocket money a child gets, the less likely they are to save, and that people who did save money as children were far more likely to do so in adult life.
The research claims the UK has a generation of entrepreneurial children who are collectively earning over £1.8 billion a year, with one in four getting some hands-on financial education by earning an average £38 a month.
While traditional jobs for kids like babysitting and car washing remain popular, nearly half a million have clicked into more tech-savvy employment such as blogging, building apps or participating in online paid-for surveys. It is estimated that around 80,000 children currently earn more than £100 a month, with modelling (average £108) and waiter or waitress (£75) being among the highest paid occupations for under-18s.
The most popular jobs are car washing (30 per cent), babysitting (29 per cent) and gardening (25 per cent), while the paper round (£45 a month) and pet sitting (£43) are among the better paid. .
Bennie added: "Of course it's not always about the money - there is also a charitable workforce of over 150,000 children who volunteer their time for little or no financial remuneration, but who will no doubt receive equally beneficial learnings in the lessons of life."
The research looked into financial education and found 60 per cent of parents believe the best way to ensure that children are financially savvy is through offering them rewards for completing chores around the house. Half think the secret to success lies in schools teaching financial education.
Bennie said: "Teaching children about personal finance and budgeting should be a staple part of both their school and family life."
But according to the Halifax, seven in ten children save at least some of their pocket money, with a quarter saving half of it - and a heroic one in 10 saving all of it.
Halifax first began conducting research into kids' pocket money 30 years ago when it was a building society. Its latest annual survey of the saving and spending habits of eight to 15 year olds found 78per cent receive weekly pocket money, down from 82per cent in the previous year. The average handout was £6.20 a week.
Over half of children believe they get the right amount, though a quarter continue to believe that their friends get more pocket money than they do - though a third have never discussed it.
Despite their good saving habits, over 40per cent of children prefer to ask for something expensive they really want as a birthday or Christmas present, but 30per cent are prepared to splash their own savings
Giles Martin, Head of Halifax Savings said: "Giving pocket money is a great tool to help children understand the value of money and why it is important to save."
In a survey by topcashback.com, more than two-thirds of parents claimed giving their children an allowance and making them budget their own spending was the best approach, against only a quarter who believed in paying for household chores.
Among parents in Scotland, 65 per cent said they would not trust their children with their personal credit card, while 45 per cent believed the best age to teach children about managing their finances is between six and ten.
In this survey, 56 per cent of parents felt they weren't taught enough about money management by their own parents, and said that it had a knock-on effect on the way their own children managed their finances. A further 45 per cent confessed they could have taught their children more.
More than half of parents felt they had set their kids on a path to financial independence, though only one in six said their children were 'savvy savers' and one in four described them as 'thrifty'.
CASE STUDY
Max Griffin, 15, has a Friday afternoon job delivering eggs around his Edinburgh neighbourhood for Croft Organic Eggs at Penicuik. He says: "I had thought about doing a paper round but there was a long waiting-list."
He and pal Euan Park jumped at the chance to earn some extra cash in farmer David Stobart's delivery network. When it comes to looking after the cash, Max says: "Most of the money I get in I spend immediately, or within the next three days, whereas most of the money Euan gets in he saves, for spending at a later time. But I am getting better, I am spending less, and I have opened a savings account."
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