10 Mistakes You Could Be Doing With Your Child’s Pocket Money

Parents are a child’s first and most important teachers. Kids see the world differently and rely on us for guidance. When it comes to money, the habits and lessons we teach early can shape their future for years. That’s why it’s important to recognize mistakes, even when they happen unintentionally.

Disclaimer: The content provided is for informational purposes only and should not be construed as legal, tax, investment, financial, or other advice. Always consult with a qualified professional regarding your specific circumstances before making any investment, financial, or legal decision.

1. When kids don’t learn to distinguish between necessities and luxuries, they may struggle with impulse control and financial prioritization.

• Tammy once spent all her allowance on a flashy pencil case, leaving her with nothing for her school project supplies. When she asked for money, parents simply told her that they can’t afford it, without discussion, missing a valuable opportunity to teach her about budgeting for essentials.

2. Giving large allowances at a young age can create unrealistic expectations and make children careless with money.

• Tom started getting $20 a week when he was 7. He often bought toys he never played with, and his parents never taught him to save. By 12, he expected expensive gifts and got upset when he didn’t get what he wanted. Now as an adult, Tom still asks his mom for money and finds it hard to manage on his own.

3. Without encouragement to save, kids may develop a habit of spending everything they get, missing the chance to learn patience, planning, and goal-setting.

• Jake received a weekly allowance but was never asked to save any of it. When he wanted a new game, he begged his parents instead of saving up. As a teen, he now relies heavily on others to fund his desires.

4. Rewarding good behavior with cash might seem like a quick fix, but it teaches kids that being kind or responsible should always come with a price tag.

• When Leo was 7, his parents gave him $20 a week as a reward for good behavior. At first, it motivated him, but soon he expected money for every chore or good deed. By 13, Leo demanded expensive gifts and grew frustrated when he didn’t get what he wanted.

5. By controlling how children spend their money, you deny them the freedom to fail and face real consequences.

• No matter what Mia wanted to buy, her dad had to approve it first. Eventually, she stopped engaging with money decisions at all and relied entirely on him. As she got older, she became fearful of making financial choices on her own.

6. What works for a 6-year-old won’t work for a 14-year-old, so it’s important to adjust your approach as your child grows.

• At 6, Tom’s $2 weekly allowance was enough. At 13, he still got the same amount, even though he was expected to manage lunch money and transport. He felt undervalued and confused about his financial responsibilities.

7. Many kids learn how to spend, but not why generosity matters.

• Lila was never introduced to the idea of donating. When her class did a fundraiser, she refused to contribute, saying, “Why would I give my money away?” Her parents realized they had missed an opportunity to teach compassion and community values.

8. Parents often teach kids how to spend or save, but forget to show them that where they spend matters too.

• Edward spent his allowance buying dozens of cheap plastic bottles and canned drinks from the store, drawn in by flashy sales. His parents focused only on the discounts and never talked to him about choosing quality or considering the environmental impact of his purchases.

9. Some parents give money to “make up for” not being present, essentially replacing meaningful time with material things.

• Whenever Ava’s dad missed her soccer games, he’d give her extra allowance to “cheer her up.” She started seeing money as a stand-in for love or validation, and struggled to develop non-material emotional connections.

10. If a parent has financial fears or guilt, they might unconsciously pass that stress onto their child, even if the child isn’t doing anything wrong.

• Every time Jordan asked what he could buy with his allowance, his mom would say, “Money doesn’t grow on trees!” even if he had saved responsibly. Eventually, Jordan began to feel guilty spending any money at all, even when it was his.

What was once frowned upon is now part of everyday life. Some habits that were once criticized have become the new normal. Click here to read more.