Is it really necessary? As parents of older children, you are probably all too familiar with those gruelling discussions about whether your child really needs that jumper they’ve been asking for, or whether they really need a specific pair of branded trainers, or whether they have to pay for those replacement headphones with their own pocket money. A youth salary is suitable for children aged 12 and up and will spare you a lot of awkward and largely pointless conversations.
Youth salary instead of pocket money: how to calculate it for your child
Put an end to awkward conversations about money: with a youth salary, parents give their children more financial responsibility, helping them to learn how to manage money. A youth salary is suitable for girls and boys aged 12 and up. We will show you how to calculate it, step by step.
Monthly youth salary instead of pocket money
Here’s how it works: instead of getting pocket money for little treats, children are instead given a larger, fixed amount by their parents each month and are responsible for managing this themselves. They use their youth salary to cover certain essential everyday costs. This may include money for clothes, mobile phone costs or leisure activities. “This method teaches children the real cost of living and forces them to start budgeting and accept responsibility for their money,” explains Andrea Fuchs, psychologist and President of the Youth Salary Association (Verein Jugendlohn). Ladina von Allmen, who is responsible for PostFinance’s MoneyFit initiative, is also very impressed by the youth salary model: “Children aged 12 and above are generally old enough to be able to take responsibility for their own finances. And, if they start learning these skills at a young age, they will find it easier to manage their money later in life, too.”
How to calculate a youth salary
But how do parents calculate a youth salary that suits the family budget? As a general rule, parents should use the amount they already spend on their child as the basis for the salary. “It is important for both the parents and the child for the salary to be realistic,” says Andrea Fuchs. “It should reflect what you already spend and not be higher than the family budget can afford.”
These steps will help you to find the right amount:
Step 1: Decide what expenses your child’s youth salary should cover
First of all, it is a good idea to decide on the areas where you want to give your child financial and decision-making responsibilities. It is important for both parents to agree. The youth salary should only cover the costs for personal items that would otherwise be purchased by the family. For instance:
- Bike/moped costs (maintenance/repairs), travel costs for public transport
- Special toiletries, e.g. make-up
- Exercise equipment and sportswear
- Mobile phones, computers and other digital devices (purchase costs)
- Mobile phone subscriptions/prepaid mobile costs
- Stationery, pencil cases, etc.
- Meals out
- Pocket money (e.g. for games, sweets, concerts, etc.)
You should generally exclude the following costs from the youth salary:
- “Board and lodging”, laundry, etc.
- Insurance, illness, tuition, musical instruments
- Any family activities such as holidays and excursions.
Step 2: Compile all your current expenses
Compiling all your current expenses is the most time-consuming part of the whole process, but it is well worth going over your costs very carefully. There are three ways to ensure you have a realistic item-by-item overview of all your costs:
- For 2 to 4 months, note down everything you spend on your child and calculate how much this costs a year
- Make a list of everything your child needs in a single year and how much each item should cost in your family. For instance, you could look in your child’s wardrobe to see how many items of clothing they have and how much you have spent on them. Alternatively, you could list how many times they go to the hairdresser and how much it costs each time. Remember to include occasional expenses as well, e.g. trips to the swimming pool, stationery and birthday presents for friends
- Estimate the total sum based on your own experiences, and ideally over the course of a whole year
Step 3: Calculate the monthly salary
Now select those items you initially decided on for your child’s youth salary and add on the pocket money you give your child each year. All you have to do is divide that sum by 12, or 13 if you would prefer to give them a 13th month of salary in November for winter clothes and savings. This will give you the monthly amount that you will pay your child or transfer to their account.
More independence – not just with money
As a mother or father, you might well be wondering how this youth salary idea could possibly work. Won’t your children just spend all their money in the first half of the month and mainly buy things they don’t even need? Look at the youth salary as part of the overall process of teaching your child to be more independent – in all areas of life. Giving your child money for their own needs is just one part of that. As parents, you should think about and discuss with your child where they could take on even more responsibility – maybe for their own room or within the family. Joint decisions will help to make your efforts a success.
Remain firm about the monthly salary
“When it comes to the youth salary, it is particularly important for parents to remain firm,” says psychologist Andrea Fuchs. “Don’t help your children out by giving them extra money if they’ve potentially spent a bit too much and are running out of cash. But do be prepared to give them advice.” By doing so, parents can teach their children to prioritize what they buy and to be realistic when spending money – which will provide them with a solid foundation for later in life.
More about the expert Andrea Fuchs and the Youth Salary Association
Andrea Fuchs is a psychologist and President of the The link will open in a new window Youth Salary Association. “Jugendlohn” (youth salary) is a registered trademark and a tried-and-tested model that was developed in the 1970s by psychologist and family therapist Urs Abt. The association aims to spread this model and holds parent evenings designed for this purpose. The specific benefits of the youth salary for families are shown in a The link will open in a new window study conducted by the Lucerne University of Applied Sciences and Arts and the University of Applied Sciences and Arts Northwestern Switzerland.