Stories | September 8, 2014

Paying dividends later in life? Pocket money linked to savvy money management

It might come in the form of a few euros handed over every Saturday morning.

Or as a reward for doing chores at home or excelling in school exams. Whatever the form, pocket money is a very common part of growing up in Europe – and a new ING International Survey special report shows it may have life-long benefits for savvy management of personal finances later in life.

Saving later in life
Regularly adding to savings is seen as a positive habit in managing money – and the survey of 12,403 adults in 13 countries shows those who got pocket money as a child are much more likely to save regularly now.
They are also more likely to be saving for retirement.
Of six money habits, people who received pocket money are more likely to show greater financial competence in four.
Pocket money might be a way to get “hands on” experience of balancing wants and needs, assessing income and outgoings and other budgeting basics at a young age.
Given 80% of people in Europe surveyed received pocket money as a child, the signals are positive.

Other influences the cause?
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.
Some academic research disputes whether pocket money has an impact on the way people save and spend later in life.

Find out more
Read the full report here.

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This article is related to the ING International Survey:

Pocket Money 2014

Pocket Money 2014

September 8, 2014

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