Why Giving Your Teenagers Pocket Money Can Do More Harm Than Good

It’s common practice for parents to give their teenagers pocket money as a means to teach them financial responsibility. However, what they may not realize is that giving their children an allowance can actually do more harm than good. In today’s society, it’s important to teach teenagers about managing finances, but giving them free reign with their own money isn’t necessarily the best approach. As a psychologist, I’ve seen time and again how some teens are negatively impacted by having pocket money, which is what inspired me to write this article.

Pocket Money Can Lead To Irresponsible Spending Habits

Giving teenagers pocket money is often viewed as a way to teach them how to budget and manage their finances. However, it can also lead to a lack of responsibility when it comes to spending. When teenagers receive a set amount of money each week or month, they may feel like they have to spend it all or risk losing it. This can lead to impulsive purchases, overspending, and even financial troubles down the road. Instead of giving teens pocket money, parents should consider teaching them how to budget and save through other means, such as by setting up a savings account or helping them create a budget plan.

Giving Your Teenagers Pocket Money
Giving Your Teenagers Pocket Money

Pocket Money is Unearned Income

When teenagers are given pocket money, they do not have to work for it. They receive it regardless of their behavior, accomplishments, or responsibilities. This can send the message that money is an entitlement, not something that requires hard work, responsibility, and accountability. By giving your teenager pocket money, you are robbing them of the opportunity to develop a strong work ethic and learn the value of money.

Money Mismanagement

Teenagers are still learning about the value of money and how to manage it properly. Giving them pocket money might provide them with the opportunity to learn about money management, but it could also teach them poor habits. For instance, some teenagers may spend all of their money in one day, leaving them with no money for the rest of the week. Others may save their money for something they don’t really need, while ignoring more important expenses.

Pocket Money Can Foster A Sense Of Entitlement

When teenagers are given pocket money without having to earn it, it can lead to a sense of entitlement. They may start to feel like they are owed this money simply for existing, rather than recognizing that it’s a privilege that should be earned through hard work or good behavior. This sense of entitlement can carry over into other areas of their lives, such as school or relationships, and lead to unhealthy patterns of entitlement. Instead of giving teens pocket money without expectations, parents should consider setting up a system where they have to earn their allowance through chores or other tasks.

Pocket Money Can Create Tension Within The Family

When teenagers are given pocket money, it can create tension within the family if there are differences in opinion about how that money should be spent. Parents may feel like they have a say in how their child spends their allowance, while teenagers may feel like they should be able to spend it however they want. This can lead to arguments, resentment, and other negative outcomes that can damage the parent-child relationship. Instead, parents should consider setting up clear guidelines for how pocket money can be spent, and work on having open and honest conversations with their teenagers about how they’re managing their finances.

Pocket Money Can Lead To Bad Financial Habits

Another potential downside of giving teenagers pocket money is that it can lead to bad financial habits down the road. If they’re not taught how to manage their money wisely from an early age, they may struggle with debt, overspending, and other financial troubles later in life. Additionally, if teenagers are given too much pocket money, they may not understand the value of money or how hard it can be to earn. This can lead to a lack of appreciation for the value of money and a lack of motivation to work towards financial goals. Instead of giving teenagers pocket money, parents should consider using it as a teaching opportunity to help them learn about personal finance and the importance of making wise financial decisions.

Alternatives To Pocket Money

That Can Foster Financial Responsibility While giving teenagers pocket money may not be the best approach to teaching financial responsibility, there are plenty of alternatives that can be just as effective. Here are some ideas to consider:

– Setting up a savings account or investment fund for your teen

– Encouraging them to earn money through part-time jobs or freelancing

– Teaching them about credit, loans, and budgeting

– Consistently modeling good financial habits for them to follow

The Bottom Line:

Why Giving Your Teenagers Pocket Money May Do More Harm Than Good As parents, it’s natural to want to give your teenagers pocket money as a way to teach them about financial responsibility. However, as we’ve seen, this approach can actually do more harm than good in some cases. By fostering a sense of entitlement, creating tension within the family, and leading to bad financial habits, pocket money can actually work against the goal of helping teenagers learn about money management. Instead, parents should consider using other approaches such as setting up a savings account, encouraging teens to earn money through work or freelancing, and consistently modeling good financial habits.

Loss of Motivation

As teenagers, young adults should be looking for ways to make their own money and become self-sufficient. But if they are already receiving pocket money, they may be less inclined to find work or pursue a part-time job. This loss of motivation can be detrimental in the long run, teaching them that they don’t need to work hard to earn money or buy what they want.

Lack of Appreciation

Another problem with giving teenagers pocket money is that it may lead to a lack of appreciation for the value of money. When teenagers grow up without having to work or earn their own money, they may not realize the cost of living and the value of a dollar. This could lead to a lack of respect for their parents’ hard work and income.

– Teens receiving pocket money could come to expect it as an entitlement.

– Adolescents may not appreciate the cost of living if they’re being financially supported.

– The act of earning money itself can instill a sense of pride and accomplishment in young adults.

Peer Pressure

While it may seem that peer pressure only leads to teens spending their money on superficial things, there’s another undercurrent at play. Peer pressure can also lead adolescents to engage in riskier behaviors, such as trying drugs or drinking alcohol. If teenagers receive pocket money, they may be more likely to take part in these activities, whether they can afford it or not.

– Teens may use their pocket money to purchase things that can lead to risky behavior.

– Adolescents taking part in these behaviors often don’t take cost into consideration.

– Even teens of well-off families could fall victim to these situations due to peer pressure.


Teaching teenagers about financial responsibility is important, but how you go about it can make all the difference. By recognizing the potential downsides of giving pocket money and considering alternative approaches, parents can help their teenagers learn valuable financial lessons without putting them at risk for negative consequences. Remember, as a parent, your goal is to set your child up for long-term success, and sometimes that means reconsidering traditional approaches like giving pocket money.

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