What should your child’s allowance be?

Sam Meadows reports on how families are using the traditional allowance in different ways to teach their children about money

For most children, their first interaction with money will come in the form of an allowance. And while the piggy bank is giving way to online accounts and digital apps, parents still have to work out how much to give and how. Research suggests that ongoing attitudes towards cash, such as saving and spending, can be formed as early as the age of six. That leaves parents with the unenviable task of choosing how best to instil good habits in their children.

Research by Rooster Money, the children’s money app, shows parents are giving their children close to £10 a week by the time they reach 14.

The research suggests children may actually be better savers than adults, with a quarter of the money being put aside for “big ticket” items like Lego sets, phones or holiday cash.

Will Carmichael, of Rooster Money, said: “If you do get your kids engaged with money, then they will stop just spending and start thinking about saving for larger items.”

The key question for most parents, however, is should we give our child chores? And should we pay them for completing them?

In an online poll, 58 per cent of Telegraph readers backed weekly pocket money in return for chores.

Dr Elizabeth Kilbey, a leading child psychologist who appears on Channel 4 show The Secret Life of 5-Year-olds, said: “There’s no harm in giving your children chores to help them understand consequences. Consequences and responsibility are the important thing. Money is the consequence of something: hard work or buying a lottery ticket. Once you have it, you have to be responsible.

“Children need to have some money in order to learn about it. They could do chores or you could give them an allowance but ask them to buy things like toiletries. It’s no good just saving money – they need to learn about spending and then having to replenish their resources.”

But how well do these attitudes persist into adulthood?

Dr Kilbey said: “Habits are changeable – it’s the ideas and the values about money that are harder to shift. Those come from our families.”

Jackie Swainston, founder of Coin-it-in, which helps children to save physical cash, said the increasingly digital nature of money was affecting how children thought and felt about it. Apps like Rooster Money allow parents to pay pocket money directly into a digital account.

“When I tell people that kids can have a plastic card from the age of six, they are shocked,” said Ms Swainston. “Everything is geared towards online and digital spending now, which means that lots of kids never actually see notes and coins.”