The great pocket money rip-off

The piggy bank is filling up as Australian kids reap the rewards of generous - or guilty - parents.
The piggy bank is filling up as Australian kids reap the rewards of generous - or guilty - parents.  Photo: Getty

Know anyone who makes $260 a year on the side without doing anything?

Australian toddlers are - they're earning about $5-a-week on average in pocket money each week.

A survey by money comparison site Finder.com.au has found that the practice of parents giving out pocket money is thriving, with mums and dads on average handing out more than $7,000 to their kids throughout their childhoods.

Once upon a time children would do chores around the home to earn their pocket money. Not now though. Oh no.
Once upon a time children would do chores around the home to earn their pocket money. Not now though. Oh no.  Photo: Fairfax Photo Library

Kids aged two and under receive an average of $5 a week, while their teenage siblings get up to $15.

But while two thirds of families dole out pocket money to their kids, only a third of recipients do anything to earn it.

With most kids sponging off their parents for free, experts say it's a missed opportunity to teach them about work ethics and money management.

"Pocket money is a terrific way to teach kids how to value money but it's almost pointless without having included conditions like doing chores," said Finder money expert Michelle Hutchinson.

Sydney mum Jackie Nevill, who gives her five and six year olds $2-a-week for basic chores, agrees.

"(Pocket money) is a good incentive so they don't get too spoilt and think they can ask for money anytime they'd like. It puts the onus on them. If they really want something, they can work for it."

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However, incentivising has also turned her canny kids onto exploiting the system.

"They're starting to get into the mindset where they think well, why should I clean up my room if you're not going to give me money for it?"

She doesn't believe in pocket money given unconditionally.

"I don't really see what that teaches. It gives them a message that they're entitled to money for doing nothing, which is not how the world works."

The survey found that the older the kids got, the more they cost their parents, with 17 year olds receiving almost $800 in pocket money a year.

Younger parents are also more likely to splash cash on their offspring, with more than half of Gen Y parents playing banker.

NSW children were the most spoilt, with only 15 per cent of them asked to do chores compared to more than half of Queensland kids who worked for their cash.

Pocket pals

  • Two-thirds of children receive pocket money
  • Only a third do anything to earn it
  • Average pocket money a week is $9.30, or $7016 throughout childhood
  • Two year olds receive up to $260/year
  • 17 year olds get $800/year
  • Pocket money rise by 7.6% a year vs savings account interest rate of 3 per cent.

AAP