Pocket money
How much does a pack of gum cost? How much does a comic book cost? How long do I have to save up for a video game? Learning to handle money responsibly takes practice—the sooner, the better. Parents can help their children with this. Pocket money offers many opportunities to do so.
Talking About Money Early On
Parents would do well to talk to their children about financial matters—always in an age-appropriate way, of course. Starting school is the right time to introduce the first allowance. Giving your child small amounts of money to spend as they wish offers them the opportunity to learn early on what it means to spend money right away or to save up a little longer to fulfill a bigger wish. This can only succeed if your child is introduced to the topic step by step.
How much is appropriate at what age?
You decide how much allowance to give your child—depending on your financial situation and the number of children you have. It’s important to give allowance at regular intervals so your child can plan ahead. The amount of allowance should gradually increase with your child’s age and should never be tied to any conditions. For elementary school-aged children, you should still give allowance on a weekly basis. The longer the period your child has to make the money last, the more challenging it is for them to manage their finances.
The following allowance table provides a general guideline for what amount is roughly appropriate for each age group. The graduated amounts are based on a recommendation from the German Youth Institute. Of course, the amounts can be adjusted to fit your family’s budget.
| Childhood | Recommended Pocket Money |
|---|---|
| children under 6 | 1.00 to 2.00 euros per week |
| 6-year-old | 2.00 to 2.50 euros per week |
| 7-year-old | 2.50 to 3.00 euros per week |
| 8-year-old | 3.00 to 3.50 euros per week |
| 9-year-old | 3.50 to 4.00 euros per week |
| 10-year-old | 15.00 to 20.00 euros per month |
What can the allowance be spent on?
As a general rule, your child can spend their allowance as they please. They get to decide for themselves what to spend the money on. Whether it’s ice cream or chips, trading cards or comic books: let your child do as they please. Maybe they’ll use up their budget right away or spend it on a bad buy. Even if you don’t approve of the purchase: stay calm! Pocket money only serves its educational purpose once your child realizes they need to manage their money wisely. And when they learn that it’s worth saving a portion of their pocket money over a longer period of time for a bigger wish.
Legal Information: What Does the “Pocket Money Clause” Mean?
What kinds of purchases are children actually allowed to make with their pocket money? And can parents reverse unwanted purchases? These are valid questions that many parents ask themselves. German law states the following:
Children under the age of 7 are legally incapable of entering into contracts. They may not buy anything without their parents’ consent. Strictly speaking, this also applies to a piece of gum or an ice cream if the parents aren’t present.
Starting at age 7, your child has limited legal capacity. From this point on, the so-called “allowance clause,” Section 110 of the German Civil Code (BGB), applies. This provision stipulates that children aged 7 and older may purchase items appropriate for their age if they can pay for the purchase with their available allowance and have been given the money for this purpose to use as they see fit.
However, sales contracts are invalid if children purchase items
- that they are not permitted to possess (e.g., alcohol or cigarettes),
- whose price exceeds the usual amount of allowance,
- that are tied to a specific term (e.g., a magazine subscription).
Children have full legal capacity as of their 18th birthday. Once they reach the age of majority, there are no longer any restrictions.
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