Pocket money ideas

You’ve reached the age where you are starting to earn your own money. This might be through pocket money, doing jobs around the house or from a small part time job. Having your own pot of money to spend is an exciting prospect. Unfortunately, it is very easy for that pot of money to disappear.

Our son has a part time job earning £5 an hour. One thing he has found useful is thinking what he’s spending his money on and how hard he has to work for it. With one of his first week’s wages he spent nearly an hour’s wage on a drink from a well-known coffee shop (A taste I’m afraid he’s probably got from me!)

However, when we sat down and discussed with him that he’d had to work for an hour to buy that drink, he started to reflect. He now understands what we were saying and he is now more careful with his purchases.

Spend, Save & Share

A great way to think about your money is to use the “Spend, Save and Share” method. This method puts your money into 3 pots which I will explain in more detail below. The actual percentages that you allocate to each is up to you. Importantly, the principle of each pot remains that same.

Getting into a habit of following such a system will set you up with good habits for the future.

Pot 1 – Spend

This pot of the money is for you to spend each week and enjoy. Give yourself a weekly budget such as 50% of your weekly earning for this pot. This can be spent on something that you want now, for example new trainers, an X box game, a new handbag or a short-term savings goal

Here are a few useful tips for your “spend” pot

  • Shop around. Have a look around to find the best price
  • Look for a discount. You may be able to get a student discount though the NUS Totum app or Unidays or by a cashback site such as Quidco
  • If the item costs more than you have, then save up for it over a few weeks and not borrow money.

Pot 2 – Save

The next pot of money is your “Save” pot. This is money that you put to one side for further down the line; your longer-term savings for them to grow (let’s say for at a lest 1 year).

You may want to consider opening a savings account to put this money in, to keep it safe until you need it, so that you are not tempted to dip into it

Think about your plans and what you want to achieve. Consider for example, holidays and school trips coming up, friends’ birthdays and Christmas, driving lessons and buying your own car.

Pot 3 – Share

This is your pot of money to share. How much and where you choose to ‘share’ is up to you. The idea of this pot is to get into the habit of thinking about, helping and supporting others less fortunate than you are.

A few examples to consider are a donation to a local charity, supporting a family in need or even supporting your own family.

I’m sure you will have seen adverts on the TV or heard the pledges on Children in Need and Comic Relief that giving £3 per month can make a difference. That’s 75p per week – one less chocolate bar or can of pop!  The charity would benefit from the donation and you would gain good skills and experience to add to your CV and talk about in future job interviews.

I hope these ideas have given you some ideas for what you want to do with next week’s pocket money!

A blog post by Sarah Elson

Sarah is the Founder of Berry & Oak, along with her husband Andrew, and is a Certified Financial Planner™ Professional

Sarah is very passionate about making sure that all young people receive access to a financial education and supports the the My Personal Finance Skills programme in delivering workshops to young children to help teach them about money.

For more on the above and other money subjects, check out the Your Money Matters here.