Children develop their competence in dealing with money in different ways: through discussions, by watching others and – a particularly effective method – through practice. Most parents use pocket money as training ground for their first experiences in handling money. Pocket money enables children and young people take responsibility for their own finances for the very first time. They learn how to save, budget and spend money responsibly.
When managing pocket money, parents are often faced with the question of how much responsibility they feel their child is ready to take: at what age should children have access to their own money? To what extent should parents have a say in how the money is used? When are children old enough to take on money management tasks independently?