Do you buy your child everything he asks for, give him a fixed amount every month, or let him earn every penny in exchange for tasks? The decision seems trivial, but specialists say that the way a child comes into contact with money can profoundly influence the way he will manage financial resources in adulthood, but also his self-esteem, self-control and relationship with work. I spoke with Adrian Asoltanie, one of the best-known financial education trainers in Romania, and psychologist Jeni Chiriac, to understand what is behind such a decision.
How pocket money influences the future adult
We are often told that financial habits are built from a young age. But it can be a challenge for parents to manage their children’s relationship with money. Psychologist Jeni Chiriac points out that children’s perception of money is not only mathematical.
“The relationship between children and money is one of the earliest forms of social learning. From the perspective of economic and developmental psychology, how parents manage pocket money acts as a hidden curriculum that shapes the values, self-control and self-esteem of the future adult. The child’s perception of money is not mathematical, but eminently emotional and symbolic. The way this money is provided directly influences self-control and behavioral self-regulation skills, including long-term self-esteem short, medium and long”.
In other words, it doesn’t just matter how much pocket money you give your child, but also in what context and with what implicit message. A child who is given money without any structure or explanation is actually getting a confusing message about the world: that resources appear out of nowhere, that there is no connection between effort and reward, that desire is enough to get something.
What happens in the brain of a child who is given too much or too little
Psychology offers answers about the two extremes of the spectrum: the child who gets everything and always versus the child who gets very little.
Jeni Chiriac explains in detail the mechanisms behind these patterns:
“When a child is given large sums of money or unlimited access to resources without making an effort or following a structure, the maturation process of executive functions is inhibited. If any desire is instantly gratified, the child does not practice the ability to wait. In adulthood, this translates into major difficulty managing failure or delaying rewards.”
The consequences are even deeper, the psychologist continues:
“Because resources simply ‘appear’, the child does not perceive a causal link between his actions and outcomes. This can lead to a form of learned helplessness or a state of amotivation—why would he put forth cognitive or social effort if the environment delivers everything to him unconditionally? Money ceases to be a tool and becomes background noise, which can lead to an inability to properly evaluate the work of others or the intrinsic value of objects.”
The other extreme also has negative long-term consequences.
“Constant deprivation or giving sums that do not even cover the minimum social integration needs of the group of belonging has profound effects on self-image. In social psychology, children tend to compare their resources with those of the group. A severe deprivation may be interpreted by the child not as a financial limitation of the parents, but as a lack of personal worth. He can conclude: “I don’t get it because I don’t deserve it” or “I’m less valuable than others”. These children can develop in adulthood a compulsive accumulation behavior or, on the contrary, an extreme aversion to risk, being haunted by the constant fear of scarcity or poverty,” explains Jeni Chiriac.
A less discussed but equally important aspect is the social dimension of pocket money:
“Pocket money can also be a ‘facilitator’ of socialization — going out for a drink, a magazine. Its constant lack leads to self-isolation or group rejection, affecting the development of social skills and a sense of belonging.”
A study conducted by BCR and Cult Market Research in 2024 on a sample of 400 parents with children between 12 and 17 years old shows that 66% of teenagers receive pocket money from their parents, most often under 300 lei per month for the 12-14 year old group. The main expenses of teenagers are going out (51%), clothing and shoes (47%) and school supplies (22%).
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The mistake parents tend to make
On the other hand, financial education trainer Adrian Asoltanie talks about a frequent mistake that, driven by good intentions, parents can make when it comes to their children’s relationship with money.
“I think one of the most important mistakes is trying to solve very quickly or sometimes too quickly every desire that your child puts in your arms. Of course, he is sometimes attacked and sees all kinds of interesting things in colleagues, friends, on social media. And obviously the temptations are very great.”
The solution proposed by the trainer is not brutal refusal, but a technique he calls the “pass back of desire”:
“My opinion is that the parent should give the desire back to the child, that is, say: ‘I understand that you want a more expensive pair of sneakers, I am willing to pay X amount, if you really want a certain brand, I invite you to put the difference and you can buy them.’ of improvement—not to execute instantly once the child has placed the desire in our arms.”
The mechanism is simple, but the effects are long-lasting: the child who has to contribute financially to an object he wants is practically doing a serious prioritization exercise. By buying with part of his money, he will value that object differently, he will be more attentive to how he uses it, and he will understand the value of money differently.
“The optimal balance in the psychology of financial education does not refer to generosity, but to predictability. A fixed amount, adapted to the age and social context, works as a “skeleton” on which the child builds his autonomy. It must be large enough to allow a choice, but small enough to impose a waiver. This “tension” between desire and resource is exactly the space where strategic thinking and self-confidence are born,” says the psychologist Jeni Chiriac
Fixed Allowance, Earned Money or a combination? Their patterns and pitfalls
There are essentially two grand strategies of parents when it comes to pocket money: the unconditional allowance model – money as a child’s right and parental responsibility – and the conditional model, where money is earned in exchange for tasks or good school results.
Financial education trainer Adrian Asoltanie says:
“When it comes to pocket money, I recommend parents to give their children the opportunity to earn at least part of this money, through various activities or projects. I didn’t use any system of monthly allowances or pocket money for my children, but most of the money came either from various activities – I asked them to help around the house, they sang carols, they sold various things, they translated my book into English -, they also received from grandparents and aunts.”
However, the conditional model has a limit that few parents take into account, psychologist Jeni Chiriac points out:
“When we financially reward an activity that should have an intrinsic motivation, such as intellectual curiosity/learning or altruism/help in the family, there is a risk that the internal motivation will decrease. The child will no longer learn to know, but to earn, becoming dependent on the external stimulus,” warns the psychologist.
In other words, if you pay your child 10’s, you may get performance in the short term and indifference to knowledge in the long term.
The unconditional allowance, while it offers a foundation of psychological security and alleviates money anxiety, also comes with other negative effects.
“It can risk cultivating a sense of entitlement – “I deserve it”. Without a clear correlation between effort and reward, the child may develop an unrealistic view of the real economy, where resources are limited and conditioned by the value added,” says the psychologist.
The most efficient model
The solution proposed by Jeni Chiriac is a hybrid one, built on three clear levels:
“A fixed, unconditional allowance, which can be small, given weekly or monthly, regardless of behavior—this serves solely as teaching material for management. The parent should allow the child to make ‘cheap mistakes’ (wasteful spending), followed by debriefing, not penalties. Exceptional tasks—cleaning the garage, helping with a parent’s professional project—can be remunerated, to teach the concept of active income. routine—clearing the table, cleaning one’s own room—are part of the family’s social contract and do not need to be paid for.”
