September 7th 2024.
According to new research from ING, Australian children are receiving an average of $750 in pocket money every year from their parents. While this may seem like a significant amount, it is actually less than what previous generations were given. ING's head of consumer and market insights, Matt Bowen, believes that discussing money and life experiences with children can help shape their future financial habits.
Bowen acknowledges that talking about money is still considered taboo for many people, but he believes that it is important for future generations to learn from their parents' experiences, both good and bad. ING's customer research has found that starting conversations about pocket money at a younger age can have a positive impact on children's long-term money habits. In fact, 8 out of 10 Australians say that their parents taught them how to save.
The amount of pocket money given to children varies by age, with 5 to 7-year-olds receiving an average of $6.50 per week, 8 to 10-year-olds receiving $10.30, 11 to 15-year-olds receiving $15.60, and 16 to 18-year-olds receiving $22.70. This amount has also changed over the years. While Generations Z, Alpha, and Millennials all received around $11 to $12 per week, Gen X and Baby Boomers were given $9.90 and $3.40, respectively.
However, when accounting for inflation, it turns out that Baby Boomers actually received quite a generous amount from their parents. For example, if a Baby Boomer received $3.40 per week in their early teens, that amount would be equivalent to $50 in today's dollars. Similarly, an equivalent Generation X teen's pocket money would be worth around $33, while Millennials and Gen Z would receive around $20 and $15, respectively.
Bowen emphasizes that every household is different and that it is important for parents and children to have a conversation and come to an agreement on a fair amount of pocket money. This should be based on the chores or support that children are expected to contribute to the household.
Another aspect that has changed over the years is how children receive their pocket money. With the increasing use of card payments and digital transactions, many households are moving away from cash. Bowen recalls having a money box as a child, where he would store his pocket money, spare change, and birthday money from his grandparents. However, with the rise of digital options, such as online banking and electronic wallets, children now have more ways to manage and save their money.
Bowen also notes that the digital economy has brought about new ways of learning how to budget and save money. For example, the concept of "gamifying" money has become popular, with many young people using digital games to improve their money skills. In fact, ING's research has found that almost 2 in 5 Australian gamers credit digital games for positively influencing their current saving habits.
In conclusion, while the amount of pocket money given to children may have decreased over the years, there are still valuable lessons to be learned about money management and saving. By starting conversations early and adapting to the changing digital landscape, parents can help their children develop good financial habits that will serve them well in the future.
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