Kids With Cash

The Age

Wednesday August 20, 2003

Tracey Kift

Pocket money can be a family minefield. First there are the questions: When should you start giving your children pocket money; should they earn it in some way; how should they spend it; and, of course, how much should you give them?

A study by Ingenuity Research of 450 Australian children aged 6-13 years has found that 80 per cent get regular pocket money, with the average amount varying between

age groups.

Those aged 6-7 receive about $2.45, 8-9-year-olds get about $3.80, 10-11-year-olds generally rake in $5.40, and 12-13-year-olds get $7.50.

When it comes to spending ... the survey revealed both boys and girls are most likely

to spend their pocket money on food - lollies and chocolates for the girls and chips for the boys.

The boys also tend to spend their money on toys and computer games, while girls collect clothing, according to the survey.

Experts say the real value of pocket money is in giving children the opportunity

to learn to manage money from an early age.

And while kids will draw a great deal from the spending and saving habits they observe in their parents, there are also resources that can help:

• Pocketpal

A pocket money management and financial education system for children, Pocketpal supplies children and their parents with an array of six tools designed to teach them to work within a budget, including:

Pocketpal Rate Card

Parents take on the role of employer and, having worked out how much they want to pay in pocket money, they decide on a list of the jobs the child must do and allocate an amount to each job. They then fill in the rate card with a list of all the jobs than can be done for a set amount of pocket money.

Pocket Pal Job Card

As the child completes these jobs daily, they enter them onto the job card. The card also allows them to pay 10 per cent income tax. The taxman - the parent - deducts 10 per cent tax from the total amount at the end of the week.

Pocket Pal Insurance Policy

Children can complete a policy and pay 5 per cent of their income to their parents, which will guarantee their wage if they are unable to do their jobs due to sickness or accident.

Other tools supplied include the Pocket Pal Credit Card, Cheque Book, Savings Book and a Parents' Guide. The system costs $69.95 and further details are available on the website www.pocketpal.com.au

• Dollars and Sense

For older kids, particularly those interested in entering the part-time workforce, the Commonwealth Bank's financial education website www.dollarsandsense.com.au provides information, tools, forums and competitions on all aspects of budgeting.

Children will also find a number of quizzes testing their knowledge of 'earning, spending, stashing, growing, protecting and losing money' with multiple-choice questions such as:

Your first pay packet lists a compulsory superannuation contribution amount. Who is responsible for paying this?

When using a credit card, if you take out money as a cash advance, when do you start paying interest?

You've saved $3000 and are keeping it under your mattress. How will your money be affected by inflation over time if it stays under the mattress?

Top three-year fixed home loans**
Banks
Lender                  True rate AAPR*         Lender rate     Total upfront
fees    Ongoing fees
AXA Home Loans          6.20%           6.09%           Nil             Nil
HSBC                    6.34%           5.95%           $600            Nil
ING Bank                        6.36%           5.99%           Nil
Nil
Macquarie Bank          6.38%           6.25%           $350            Nil
ANZ Bank                6.47%           6.10%           $600            Nil
Non-banks
Lender                  True rate AAPR*         Lender rate     Total upfront
fees    Ongoing fees
RAMS                    6.13%           6.05%           $1065           $8/month
FCCS Credit Union               6.19%           6.35%           $1055
$5/month
Pacific Mortgage Corporation    6.24%           6.19%           $300
Nil
Heritage B Society              6.26%           5.89%           $600
$5/month
Collins Securities Residential  6.32%           6.00%           $600
Nil
*AAPR is the annualised percentage - the rate after extra fees and charges are
taken into account.
** Rates are for loans $200,000 over 25 years in Victoria for owner-occupied
homes.
Compiled by www.interestrate.com.au using Cannex data (August 13).

© 2003 The Age

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