Should Pocket Money Go Cashless?

When I was younger, I remember getting my few pounds of pocket money, and I’d stash it away in a money box. Everyone used physical cash so it was common to get cash in birthday cards or a cheeky extra pound from my nan when I saw her. But times have changed, and most of us don’t carry around physical cash anymore. The question of should pocket money go cashless is one I’m sure plenty of parents have already had to tackle and answer.

93% of UK adults use some form of online banking according to Statistica. And those figures are only likely to go up with technology becoming more and more part of our everyday lives. Millions of people are opening digital-only bank accounts every month, stating that they’re more convenient and easier to use.

Should pocket money go cashless?

35% of parents claimed that they felt worried about helping their children understand the value of money as we move toward a cashless society, according to M&S bank. And that’s understandable because when you have physical cash, you can count it out and feel it. Numbers on a screen in a digital bank account don’t always feel as real. I know I value physical cash more when I spend it than when I just tap my card.

As technology is evolving so are the options available for kids. Digital bank accounts for kids help to teach children about budgeting, saving and spending.

Pocket money in a cashless society

Parents no longer have to ensure they have the right coins or notes for pocket money day. Parents can now transfer money into a kid’s online bank account.

It’s becoming normal for kids to have their own money app or digital bank account. According to Finder, over 60% of 10-15-year-old kids in the UK now use an app to manage their pocket money. Children generally have to be 11 years old before they can have a regular children’s current account. But many digital-first options are available for kids as young as six.

With digital accounts, it’s not just pocket money you can add to the digital accounts. Other people can transfer money so birthday and Christmas money can also go into their account.

HyperJar

As someone who doesn’t have kids themselves, I had to do some research into the accounts available for kids. HyperJar is a budgeting app I already have, and if you have an account, you can order a pre-paid card for your kid. And the great thing about it is it’s free to do.

You can put all of their money into a pot, and the pre-paid card gives them control of their set money. But you can also set limits on how much they spend on online games.

The app is easy to use and has tools to help them learn about smart spending and saving for bigger ticket items.

GoHenry

GoHenry was the first thing that came up when I started researching kids’ accounts. You can personalise it with your kid’s name so it could be GoRhian or GoLuke, which is cool.

It works as a pre-paid card that kids can use like a debit card, and kids can only spend the pre-loaded amount. But the cool thing is that once you’ve linked your bank card, you can set up regular pocket money and one-off payments.

You can also set tasks, and when they’re complete, you can reward them via the app. So if they do extra chores at home or something similar, you can reward them.

The app is great for kids to learn about budgeting and savings towards goals. You can get the first month free and then it’s £2.99 a month for the service.

Rooster Money

If you don’t want your kid to have a card, then Rooster Money is a good alternative as it’s just a pocket money tracker app.

You don’t need real money, but you can ‘pay’ kids virtually on the app. Then the app can help teach them how to track their savings and spending, and a great introduction to finances.

If you want a pre-paid card, it is available for £1.99 a month (the first month is free).

Other apps to use if you’re thinking, should pocket money go cashless?

• If you’re a Starling Bank account holder, you can link your child to a Starling Kite account. It’s controlled via your account but gives kids their own debit card where you can set daily spending limits and where it can be used (cash machines/ online/in-store).
• Nimbl is another pre-paid card and app. You can top up your kid’s accounts regularly or with one-off payments and use the app to learn about budgeting and spending.
• Osper works alongside cashback. If you shop via Kidstart, any cash back you earn can go onto your child’s Osper card.

Should pocket money go cashless? What do you think?

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