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Teaching children how to save with pocket money

We believe a good place to start teaching children about money is through pocket money. This is something they can be given control of so that they can learn about saving and spending, as they will realise that some things cost a lot more than others and they can’t always get what they want straight away.

The sooner kids are familiar with coins and notes, they quicker they will begin to appreciate the value of money, which can be hugely important in later life.

In fact, research shows a child’s money habits have largely formed by the age of seven. Once they understand what it is, and have seen how you use it, pocket money is a great way to get them to understand what money is used for - whatever their age.

According to MoneyHelper (was Money Advice Service), in 2020 children were getting on average just under £12 per week in pocket money, through an allowance or by doing chores.

Your kids are sure to have ideas about what they’d like to spend their money on as soon as they get it. Perhaps they’re on their way to the sweet shop as soon as you hand over the money, or maybe they’re set on buying the latest video game.

By giving them their own pocket money, you are putting a limit on the amount they can spend on things for themselves and they will eventually learn how to manage and plan their own spending.

Learning to save

As your kids begin spending their money themselves, encourage them to think about how they might be able to save for more expensive items instead of more immediate treats.

You can help them to work out how much they’d need to put away and for how long to reach their goal amount. Then you can pick out a money box or savings account for them to store the cash.

Some kind of chart is a great way to demonstrate progress.

Earning it themselves

You can show your child that money doesn’t come from nothing by allowing them to earn money if they complete tasks or chores around the house. This will mean that they will begin to have more money available to them and you can encourage them to put this towards something.

They will learn that you can’t always have everything you want, as some things cost more than others. You can also teach them that they may have to save up to get the thing they want, whilst sacrificing other things so they can get it quicker.

Helping prioritise spending

As your children get older, you can start giving them more money, but making them responsible for items such as their own toiletries, clothes, sports or going out. You should try and gradually introduce an expense and up their allowance accordingly – this could involve additional chores to enable them to earn this.

Additionally, if you’re giving your child a weekly allowance, you can try and move it to monthly as this will help them get used to making money last for longer.

These changes will really help them realise money isn’t an unlimited resource. They’ll think more about budgeting and prioritising what they want to spend their money on. Plus, they will begin to realise there are essentials they can’t go without, even if there are more fun options.


Pocket money is a great chance to help kids start to make spending and savings decisions, as well as understand the importance of having money saved for emergencies.