Allowance rules

Why is pocket money important for children?

Parents are not legally obliged to give children pocket money. That does not mean they should not receive any money. In fact, there are several advantages and positive effects when you give your child pocket money to spend as they wish.

Learning:Pocket money helps children develop an understanding of money and its value. In this context you can, for example, already explain to your child while shopping what is cheap or expensive and what price differences exist. Pocket money also helps them learn to handle money independently and responsibly. Someone who cannot afford something right away or has to plan with money also learns to appreciate the value of money and the things they buy. As with all learning processes, mistakes happen here too, and you should forgive your child for them.
Freedom to spend:Your child is allowed to decide entirely for themselves how to use their pocket money. For this reason you should not interfere, even if you are not convinced of the quality or usefulness of the new toy yourself, unless your child is harming themselves, e.g. by buying too many sweets. The child may, however, well have the experience of having spent all the money on something expensive so that not much pocket money is left. This way they can learn to divide their money more carefully in the future.
Appreciation:Through pocket money your child learns that you take them seriously and trust them to handle their own money. However, this appreciation should not be linked to the amount of pocket money.
Independence:By giving your child the trust to handle money themselves, you not only make them proud, but at the same time they also become more independent because they can make their own decisions and do not have to ask you for money for every purchase.
Note, however:You should not require your child to pay for necessary clothing, schoolbooks or food from their pocket money. However, if they deliberately destroy things or have a particularly large wish such as a fancy bicycle or an expensive item of clothing, you can agree that your child contributes some of their own money towards it.

Pocket money paragraph: A binding contract with minors

Taschengeld Regeln | Junge hält 5-Euro-Schein hoch

In Paragraph 110 of the Civil Code (BGB) it is stated that minors from the age of seven may freely dispose of their money. That means that sales contracts, such as the purchase of comic books, ice cream, books or similar items, are in any case legally valid. The payment of pocket money by the parents is sufficient as consent for these purchases. The law does not set a maximum amount. Nevertheless, more expensive purchases sometimes remain in limbo or require the parents' consent. They can then weigh whether their child's purchase is permissible or whether they want to revoke it.

Important pocket money rules that apply to adults and children

Taschengeld Regeln | Kinder stehen am Tisch und Sparschwein auf dem Tisch

Not a parenting method: Pocket money should not be used to reward or punish your child. For a failed math test or an exceptionally good performance, increasing or reducing the pocket money is inappropriate.
Regular and without prompting: Don't make your child have to beg for money. Your child can rely on a fixed amount on a specific day – for example at the start of the week or month – and plan accordingly.
Independent: Pocket money should not be set in relation to other money. A generous gift from grandma and grandpa or money earned by the child does not mean that you should pay your child less. That reduces children's motivation to earn some extra money by delivering newspapers or doing other small jobs.
Proportionate: To teach your child to handle money responsibly, the amount of pocket money should be set accordingly. Small wishes like a magazine or a book can be fulfilled with it, and they can also save a bit for larger wishes. If your child spends all their pocket money at once, you should not top it up. Otherwise it will be harder for them to estimate the value of their own money.
Be open: Naturally, the amount of pocket money also depends on your financial situation. Talk openly with your child, because only in this way can you teach them that money is not a taboo subject and explain why other children receive more or less pocket money.
Set a good example: Your child will learn how to handle their pocket money by watching you. For this reason it is important that you also handle your money responsibly. It is also important that you forgive your child's poor purchases or planning mistakes. Instead of blaming, you should think together about how your child can better manage their pocket money in the future.