The French have been tightening their belts for several years, due to galloping inflation and wages that are struggling to keep pace. However, they are increasingly generous with their children, increasing their pocket money year after year. For what ?
A steady increase for two years
According to a barometer from the online bank Pixpay, In 2023, teenagers’ pocket money increased by an average of 3 euros per year, while it had already increased by 2 euros the previous year. This is demonstrated by a survey of the Kard application, which serves as a payment account for young people pocket money donated by users’ parents increased by 50% in two yearsgoing from 40 euros per month on average in 2021 to 60 euros in 2023.
Scott Gordon, co-founder of Kard, explains this with their customer base growing and aging over time, but especially with the inflationary environment. “ Parents are giving their children more money to counter the rising cost of living for everyone. »
Anne-Sophie Alsif has a PhD in economics from EHESS and professor of economics at the Sorbonne. “ With inflation, adults are asking for a pay rise, and so are teenagers! More seriously, from the age of 15 a teenager’s pocket money often covers leisure activities and the telephone, prices increase and so does pocket money. ” points out.
An economic effort that parents willingly accept to make
But why do parents increase their children’s pocket money if their standard of living is often directly influenced by inflation and this increase requires financial effort?
For Anne-Sophie Alsif it’s the “Christmas presents” effect.
“ Even if living standards decline and financial difficulties are encountered, parents tend to deprive themselves and not their children.. We see that the Christmas budget continues to increase by around 10% every year since the 2020 crisis, while the French are experiencing sharp drops in their purchasing power.. »
There is also a desire to protect one’s children. “ Increasing pocket money also allows young people not to feel like they are losing purchasing power compared to others. » he adds.
Scott Gordon also sees it as an opportunity to help teens understand economic and financial mechanisms. “ For the almost majority of families Pocket money remains a financial education tool. It is good to make your children understand inflation, the increase in the cost of living, and reflect it in their pocket money. »
Will pocket money continue to increase?
After two consecutive years of increases, attributed to inflation, will teenagers’ pocket money continue to increase in 2024 and 2025? “ Inflation will slow down soon » informs Anne-Sophie Alsif, « expected to be 2.7% in 2024 and 2% in 2025. Prices will continue to increase but at a slower pace. »
So will this have an impact on the amount of pocket money? “ It will be interesting to see whether the increase in young people’s pocket money will also slow down. Logically, pocket money increases should be less significant, as inflation will slow. »
However, it places emphasis on the issue of young people who have left their parents’ tax domicile, but who are still students and not yet earning a living. “ This is the category of people that has become the most impoverished after the Covid crisis. Even if inflation slows down, in this specific context parents can continue to give them more money. »
Pocket money: instructions for use
To do things right, at what age should you start giving pocket money, and how much? Anne-Sophie Alsif does not want to advance a sum so as not to stigmatize families who cannot donate as much, but she recommends donating weekly rather than monthly, even if the overall amount is lower. “ You need to act based on your income, keeping in mind that teenagers have no real needs. “. Their spending mainly concerns leisure purchases.
Regarding age “ according to a study conducted in the 1980s, teenagers begin to be able to use their money rationally from the age of 15. But today the needs are different, especially digital ones; on average, people start donating at 13 years old. »
Scott Gordon recommends starting to introduce your child to budgeting at age 6-7. “ They begin to understand the value of money, they get used to touching coins and banknotes. »
But as children grow up, they don’t necessarily have the ability to use tickets, because “Many transactions are made digitally with a payment card. Cash does not meet the needs of teenagers, gone are the days of piggy banks where we didn’t know how many there were and which we had to break. Today you need to better understand your budget and instantaneity. »
The co-founder of Kard recommends starting by donating 10 or 15 euros a month starting from 8-9 years old“ to familiarize with saving and money management, at that age it’s more about saving, because at 8 years old the child doesn’t go out alone to buy something “. The amount allocated may therefore increase depending on age. “ The average age of Kard customers is 13.5 years old, at 12 years old their monthly pocket money is on average 27 euros, plus around 31 euros for 14 year olds, and around fifty euros for 17-18 year olds. »
Scott Gordon also notes that pocket money does not constitute the entire income of teenagers. “ Among Kard users, about 60% of income comes from parents, the rest comes from babysitting, other odd jobs or from reselling on platforms like Vinted “.
With better tools at their disposal and familiarity with budget management since elementary school, will our children become better managers than us?
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Source: Madmoizelle
Mary Crossley is an author at “The Fashion Vibes”. She is a seasoned journalist who is dedicated to delivering the latest news to her readers. With a keen sense of what’s important, Mary covers a wide range of topics, from politics to lifestyle and everything in between.
