You can easily think of pocket money as being childish, something you call money and give to your children when they are young. Not only that but for us as adults too and I have wanted to blog about the importance of pocket money for a while now.
Rachel and I agreed from the start we would use a joint account for our salaries and household costs. From this we set up a standing order so we could pay ourselves some pocket money each month to our own accounts. It has always been a modest amount of money, say £20 a month, and this has worked really well for us.
This is our reasoning
- It is money which we can then do as we please with; we are not accountable to each other if it is wasted or squandered
- As it is private, we can use it for buying each other presents at Christmas and for birthdays, without the cost appearing on our joint bank statement
- It allows us to simply treat ourselves to something if we want to be a little indulgent or extravagant
- We have never squabbled about money and this is one of the things which has helped this
Over the years it has worked quite well and its been amusing to see our different characters coming through with the way in which we have managed our pocket money.
Rachel tends to save her pocket money and spend some in a worthwhile way. This is partly “helped” by her pocket money account being with the NatWest who, for the last 22 years have consistently managed to screw up the PIN code so Rachel has never been able to take any cash out! When Rachel does use her pocket money, it is generally a kind gesture on her part. Recent examples have included buying our daughters a Kindle each at Easter. Rachel also pays for our Amazon Prime membership from her pocket money, something we can all benefit from.
Myself, I tend to use my pocket money for Rachel’s Christmas and birthday, plus funding my hobbies – Apple magic mouse, running shorts etc. Most of the time nowadays I’m slowly saving the money.
One blight in the pocket money strategy is the lack of return on the money. We both have our money in straight forward current accounts which pay next-to-nothing in terms of interest. We might need to fix this sometime in the future but not to make the same mistake as I once did – I once used about £1,000 to buy some shares recommended in the Saturday Telegraph personal finance pages. I bought two lots of shares – one did really well and the other company went bust, so in the end they both cancelled each other out. Since then I’ve not had the courage to buy shares.
Our suggestion
For all engaged couples is to talk about money as they prepare for getting married and spending their lives together. We would highly recommend a pocket money arrangement, just a small affordable amount. It has worked really well for us over the years and would thoroughly commend it to you.
Relevant – other personal finance posts