When I was a child, I learned to save
It might be earned by doing chores at home. Maybe from a part-time job. Or pocket money might be handed over as cash or transferred directly into a dedicated bank account set up to safely save it for the future.
Either way, the ING International Survey on Pocket Money suggests that the sum earned or gifted to most children in Europe each week may pay dividends later in life. Of 12,403 adults in 13 countries surveyed, those who got pocket money as a child are much more likely to save regularly now – and be saving for their retirement.
The way you get pocket money seems to matter
A study presented at the Royal Economic Society in 2013 found that earning pocket money through work seems to lead people to save more later in life. But, it says, being gifted pocket money from parents may lead to the reverse.
Times are changing
The ING study found, however, that children are much less likely than their parents to earn pocket money through working (either chores around home or a part-time job). But more of them were getting it directly transferred into a bank account – changing the dynamic between getting cash in the hand and being able to immediately hand it over to a shopkeeper.
It is not possible to conclude from the results whether pocket money is the cause of the greater financial competence or if there is simply a correlation because of other factors. After all, those who received pocket money may also have benefited in other ways – with current income, parents’ income during childhood and other influences from family background also potentially relevant to their money savvy today.
But there are positive signs that are encouraging.
This article is related to the ING International Survey: