Entrepreneur, parenting coach and mum-of-six Shirley Erwee explains why pocket money is outdated and what parents should do instead.
For generations, pocket money has been seen as a rite of passage, handing over a few coins or dollars each week in exchange for completed chores or simply as a family “privilege”. In today’s rapidly changing world, where innovation and adaptability are more valuable than routine and entitlement, it’s time to re-examine this practice.
Pocket money and entitlement
On the surface, giving children pocket money seems harmless, perhaps even helpful. It can be a tool to teach budgeting, delayed gratification and responsibility, right? Yes, but it can also cultivate the wrong mentality. When pocket money is routinely handed out, it can train children to expect to receive the money simply because time has passed or because they live under your roof.
This expectation doesn’t reflect the adult world. Most adults get paid for solving problems or offering value. When we give children money without requiring entrepreneurial thinking or problem-solving, we unintentionally reinforce the idea that money comes automatically. It’s time to shift to approaches that reflect real-world dynamics.
Pocket money and chores
Many parents tie pocket money to chores. Here’s the catch: chores are part of contributing to a family, not a job-for-pay.
You don’t get paid to cook dinner or clean your own house as an adult. These are life skills and responsibilities that we all have to do. In our home, we did chores and share daily work as part of the family contribution.
Secondly, paying for chores breeds the idea of someone handing you a job and handing out a salary. That’s great while it lasts, but job security is almost a contradiction in terms of today’s economy, which technology is disrupting huge global industries.
Children must develop more than a “get a job” mindset. They must learn to look for opportunities or create their own if they wish to thrive in a fast-changing world.
Kids are capable
Many successful entrepreneurs started young. Youth is the best time to learn and also the best time to fail, as parents are still paying the bills!
Creative Kiwi kids are already doing it and this needs to become the norm. From selling handmade products at local markets, to offering lawn-mowing services in neighborhoods, there’s a growing number of children exploring how to offer value and earn their own money. These are confidence-building, character-shaping experiences that teach life lessons that no textbook can replace.
Shift from allowance to initiative
So, what do we do instead of routine pocket money? Here are three practical alternatives to help children think like entrepreneurs.
1. Opportunity-based earning
Instead of handing out a weekly sum, encourage your children to earn money by identifying real needs or taking on extra chores (beyond the family’s share of work initially). This might mean suggesting they could solve problems, such as:
- a car that needs a wash;
- a garage that needs a deep clean;
- a lawn that needs weeding;
- grandparents that need help with running errands.
The key is that the task must go beyond their usual contributions to the family and should produce genuine value to someone else. This approach mirrors the way adults earn: by noticing what needs doing and taking initiative.
Don’t offer the job and name the price, let your child pitch a deal to you, in the spirit of entrepreneurship. Haggle a bit and negotiate, set the standards you expect and other conditions, until you agree on the price and terms. Set a date for completion to hold your child to account.
2. Problem-solving for profit
The next step is to encourage your child to find their own opportunities outside the home. Get them to look around their community or neighbourhood and ask, “What could be easier, faster or more fun?”
Offer small jobs or projects like having elderly neighbours take their bins to the road and return them once they are emptied for a small fee. This is a way to learn to manage time, take responsibility seriously and communicate professionally.
These small ventures are powerful learning laboratories. Children gain experience with pricing, marketing, dealing with customers and delivering on promises. They also learn resilience when things don’t go as planned, which is an invaluable trait for future success.
3. Mini ventures
Help your child explore simple business ideas, especially those that align with their interests. A child who loves animals might offer a dog-walking service; one who enjoys crafts might sell handmade cards; a teen who loves social media could offer her services to do regular marketing posts for a local small business.
Start small, keep it manageable and celebrate their efforts, even if it doesn’t go perfectly.
More than just money
Raising a child with an entrepreneurial mindset isn’t just about money. It’s about developing character qualities like grit, creativity, empathy and courage. It’s about helping a child see that they have the ability to contribute, to lead and to build something meaningful.
In fact, some of the most powerful outcomes of these experiences aren’t financial at all. They’re the quiet transformations – such as when a shy child becomes confident after selling their first product; or when a child, who once gave up easily, learns to persist through challenges.
Your child doesn’t have to create a product that’s never been done before. You simply need to help them be curious, open to experimentation and willing to celebrate the process more than the profit.
Reward effort
It’s not about replacing pocket money with performance, but about reimagining how we teach children to think about value, effort and independence. The world they’re growing up in is different from the one we knew, and we owe it to them to prepare them with mindsets that match. “Study hard so you can get a good job” is not enough anymore.
By moving away from pocket money, routine allowances and towards opportunity-based earning, we give our children a chance to experience what it means to create, contribute and grow. Who knows? Your child’s next big idea might be just the solution we all need!
Shirley empowers parents to raise job creators instead of job takers, to reshape inherited money beliefs and build financial freedom for their families. Find more tips and resources for raising entrepreneurs, visit shirleyerwee.com.
