Category: Finance

Self- Employment: Self-Assessment Tax Returns

I am so proud of myself right now; I have just been super organised and filed my 2017/18 tax returns online already! The deadline isn’t until the end of the year, but I couldn’t blog anyway because my site was being transferred to a new host, so I figured I might as well use that time effectively and submit mega early to get it out of the way! Especially after having a massive last second faff last year and finding myself needing to send a paper version in the end, only for Royal Mail to return it to me a week later as the envelope got damaged in transit! So I was then panicking about deadlines and potential late fees; it is a massive relief to know there will be none of that stress this time!

Are you self-employed? If so, you will need to keep records and fill out a tax return form each year too. In many cases that is obvious; people are generally aware that if you run a business and get a regular income from it, you must be self- employed and need to declare your income. However, some people don’t realise that even if you just earn a small irregular income, for example if you mainly blog as a hobby but occasionally get paid work, or if you sell things from home, or receive any other ad hoc income, that you still need to register as self- employed and complete an annual tax return. If that is the case, here’s what you need to do…

Self- Employment: Self-Assessment Tax Returns

Register as Self- Employed

Firstly, you need to register as self- employed. The easiest way to do this is by completing the form online. You must register by 5 October in your business’s second tax year at the latest, although personally I would recommend doing it asap.You will then be sent your Unique Taxpayers Code.

Register for Online Self- Assessment

Assuming you intend to file your tax returns online, you then need to register for this service on the government website. Technically you can use either the government gateway system or Gov.UK Verify to register and submit your returns, but this is the part where it got complicated for me the first time around.

Government Gateway

I tried to use the gateway system, whereby you complete a form online then they send you an activation code in the post. However, this did not work for me and I was told to use Verify to confirm my ID instead. The gateway system is gradually being phased out and will be replaced completely by March 2019, but I am not sure whether this issue had anything to do with it or not.

Verify Gov.UK

So I tried to use the Verify system. And this is where it got really frustrating! For the vast majority of people this would probably be a really quick and easy task. For me, however, not so straightforward; quite the opposite infact!

You see, my passport – which was in my maiden name anyway – had just expired and I don’t have a valid UK driving license either. On top of that my back account is with Nationwide. This combination apparently means you can not possibly verify your identity online with any of the seven different approved companies who offer this service on behalf of the government. Hmm. I wasted so many hours trying to sort it out, it was absolutely ridiculous.

Long story short: eventually I had to renew my passport and open a new bank account with a different bank – just so I could use the government’s online services! Needless to say I was less than impressed.

Tax written on a notebook. Hand holding pencil.

Submitting Your Tax Returns

That said, once you are verified online, it is really easy to submit your tax returns online. If you have all the information you need in front of you, it isn’t too much of an onerous task; actually, it didn’t take me very long whatsoever. If you are submitting online, the deadline is 31st January. For paper versions, it is 31st October.

Record Keeping

Obviously make sure your books are accurate and kept up-to-date, so you have the correct figures to submit. Also keep evidence; receipts, invoices, account records etc… incase you should ever need them. I use a simple Excel spreadsheet to record my monthly income and expenses. I operate on a cash-in, cash-out system, as I find that easiest personally. You will need to check if your situation allows this.

Remember to include all your allowable expenses. For example, if you work from home you can include a percentage of your utility bills. To make this easier, you can use simplified expenses. This is a flat rate, depending on how many hours you work from home per month. Note this does not include phone and internet so they can be listed separately. Once you have got to grips with your record keeping you shouldn’t find it too difficult, especially if you have a straightforward business. However, some people do like to hire a book-keeper to be sure it is all correct.

Calculator, pen, graphs, paperclip

It can be daunting having to complete your tax returns for the first time, but try not to worry! I hope this information is helpful. Let me know in comments if you found it useful!

*Disclosure: This is a collaborative post.

Self-Employment Issues: How To Deal With Variable Monthly Income

If you are self- employed you may well find your monthly income is variable. It might depend on how promptly invoices are paid, some of your work might be seasonal or you might simply have an unpredictable flow of work each month. This can make it difficult to manage finances and create unexpected shortfalls. Here are some practical tips to dealing with a variable monthly income…

Self-Employment Issues: How To Deal With Variable Monthly Income title. Image of desk with keyboard, wallet, plant and pencil

Plan Ahead

If you know your work is seasonal, or you happen to have a particularly good month, then you need to make sure you budget the extra income carefully so that you will be prepared for the slower months when they come around. It might be tempting to spend it while you have it, but don’t!

Once your business is established enough, take an average of your monthly earnings then use that to base your budget on. Ideally, budget for slightly under your average figure to be on the safe side. You can also try to forecast your predicted future earnings and use this information too, but don’t rely too heavily on it – at best it is most likely still just an educated guess! (Unless your business is fairly predictable in nature of course).

Tax Returns

When you calculate your budget, make sure you remember taxes; you don’t want to find yourself with a tax bill that you hadn’t accounted for! Work out roughly how much your tax is each month and set that aside. That way, when you complete your tax return at the end of the financial year, the lump sum will be there ready and waiting to pay the outstanding amount immediately.

Stack of coins and pens on finance sheet

Late Invoices

If you are self- employed it is essential to make sure you invoice corrently, and you must record income and expenditure accurately. So keep a careful track of all of your invoices and note when they have been paid. Chase up late payments after 30 days past the due date and have a clear policy for any late fees. If absolutely necessary, seek legal action to recoup the money. Late invoices sadly are a fairly common occurance and can really mess up your finances so it is important to have a clear process for dealing with this, as well as a financial back up plan.

Income Shortfalls

In reference to the previous point, what happens when an unpaid invoice, or an unexpected fluctuation in income, creates a shortfall? This can be one of the hazards of self- employment unfortunately. Ideally you will have budgeted for this and have some money saved aside. But we all know that of course sometimes this isn’t the case.

As already suggested, the first step is to chase any outstanding overdue invoices, which hopefully might prompt them to pay. There is also plenty of advice on how to make some extra pennies when needed.

However, if this isn’t enough to balance the shortfall, you could consider taking out a loan as a last resort. If you need cash fast you could research quick loans. Alternatively, if you are on Universal Credit, you could also enquire about a budgeting advance from them. Borrowing from family or friends maybe another option. Just remember, you will need to pay it back as soon as possible and you may need to modify your budget to enable you to pay off the interest, and to ensure it doesn’t happen again.

Are you self- employed? Do you have a variable income? I would love to hear your tips for managing this. Leave me a comment!

*This is a collaborative post.

Getting More Bang For Your Buck

Often, the amount of purchases people make where it is just wasting money is incredible. There are so many ways that we can get more bang for our buck that we just seem to be ignoring. Why this is, I guess we’ll never know! It is, of course, more helpful to make the most of the money you have. You most probably will have realised that life isn’t always easy, and money seems to come out of the bank quicker than it goes in. It’s a problem most of us are plagued with, certainly at some time or another anyway, but one that can be avoided by a large amount if we just try and get more bang for our buck. Here’s a few ways that you can do just that…

Getting More Bang For Your Buck title with image of 20 pound notes

Resellers

Resellers are the ones you need to be looking at. You can get something nearly brand new, for next to nothing compared to what you would pay if you went into the store and bought it. Resellers offer pretty much anything, and you can find them almost anywhere. For example, you’ve got resellers of clothes. You don’t even have to pick up your laptop to sort this one, a lot of resellers of clothes have apps that you can use. The clothes you’ll buy might have been worn once or twice, but it’ll be some excellent designer things with the price slashed completely. There’s also resellers of items that aren’t second hand, such as food. You’ll probably need to go online for something like this, or look out for stores such as Costco. You will be absolutely amazed at how much money you can spend here, and how much you’ll be able to get for it.

More In The Long Run

To get more in the long run, you need to be looking at the long term bargains. Let’s talk about cars for example. People usually take out finance to get a brand new car, meaning you’re tied in for years, or buy it outright. So, consider leasing instead. It allows you to switch from car to car every two years, and that way you always have a brand new car! Check out All Car Leasing for more information. If you know you’re a lover of cars, and the newest ones at that, this is going to work out really well for you. So many people go for financing, when that is often actually the more expensive option. At least this way you know you’re going to get a new treat every so often. And that will likely save on maintence costs too, which tend to increase as the car ages.

Cheaper Essentials

Cheaper essentials is something we should all be looking out for. We’re talking about the things you’ll buy on a daily basis, that you probably usually spend hundreds a year on. Again, you’re going to need to go bargain hunting. There are discount stores that will sell essentials such as shampoo and conditioner for next to nothing, whereas mainstream supermarkets will make you pay through the nose in comparison. You can also try your hand at couponing to see how much money you would be able to save!

A pile of £20 notes

What are your top tips for saving money? Tell me in comments!

*This is a collaborative post.

Overcoming The Slippery Slope of Debt

Economically, times have been tough for some time now, and this has resulted in many people falling down the slippery slope of debt because they are in dire need to make money. But even if you have the money in place, it can still be hard to keep your head above water, let alone enjoy the prosperity of financial freedom.

Getting out of debt can feel like an uphill struggle to the point people want to give up. When people are in serious amounts of debt, they often do end up on a downward spiral, falling down the slippery slope of interest and other fees accruing on overdue payments. Indeed, one of the vicious cycles in terms of debt is that people often end up paying more in interest and fees than they are from the actual balance. The challenge is that once you start missing a few payments, your financial position can quickly go downhill, and this is when people lose control of their financial situation.

It’s the same in business, yet there tend to be more options available to manoeuvre. As an example debtor factoring helps business to borrow money and you can always get venture capital to expand your business, or avoid a financially disastrous situation.

It’s understandable that people in debt wish to bury their head in the sand due to the emotional overwhelm they face. But the best starting point, if you’re feeling this way, is to contact the money advice service; an independent organisation that offers free and impartial advice on how to get out of debt.

An image of spreadsheet, calculator and coins in a vice

If you’re feeling the pinch and are trapped in debt, it can often feel completely hopeless – yet, there’s always hope. It’s important to remember that just like how the bodies cells replenish themselves, so does your financial history, as CCJ’s and the like are all wiped away after six years.

Even the social stigma that was once associated with bankruptcy is nowadays much less potent. In part this is due to the number of people having to file for bankruptcy, as well as the entrepreneurial culture we are now living in, which has seen many highly successful business people go bankrupt multiple times only to rise up like a phoenix.

The point is that just because you’re in debt, doesn’t mean it’s the end of the world. It can feel like it, when you are backed into a corner and have creditors banging on your door – nobody likes to receive intimidating letters, or be threatened with the prospects of bailiffs. Indeed this is a tremendously stressful experience for anyone to endure; yet there are a number of ways to relieve the pressure.

The best thing you can do, is to take the bull by the horns and seek some advice. There are a plethora of options from IVAs, debt reduction and debt consolidation programs, where you can get one loan that covers all existing debt and then just make one monthly manageable payment. If you own your home, you could even remortgage your property to consolidate the debt you have accrued, and pay it off, in a similar way.

In summary, you always have options, the trick is to take control of your money situation – rather than letting the situation control you!

*This is a collaborative post.

Are You Wasting Money In The Worst Areas?

Do you have trouble with money? It’s possible that you struggle to save because your money is actually draining away in wasteful areas. There are lots of areas in life where you might be spending a lot more than you actually need to. Cut the cost, and you will find you have a lot more money to play with at the end of each month. Let’s start by thinking about purchases that you should never have made in the first place…

Are You Wasting Money In The Worst Areas? title with image of piles of coins

Straight Out The Box

Financial experts will tell you that you should never purchase a car brand new on the market. The reason for this is simply the depreciation. When you buy a car, it will immediately start to drop in value. There is literally no way that you can make money off a car that is purchased brand new when it comes time to sell. Unless of course, you decide to purchase a classic. However, even then, you will need to be careful how much you drive the vehicle and what you use it for. You see? Even purchasing a classic vehicle, something that should always balloon in value, isn’t guaranteed to lead to an ROI. The obvious answer then is to purchase a car second hand. While this can be risky, it does mean that you won’t be losing as much money when it does inevitably start to drop in price Instead of losing half the value of the car, that value will already be gone when you make the purchase. There are other benefits too. You’ll be able to afford a nicer car, and that car will be cheaper to insure. Gocompare.com can show you how expensive it is to insure a Merc and one that is second hand will always be a lot cheaper.

An image of an expensive new car

The Package Deal

Are you booking a holiday this year? You might have heard that booking a package holiday is cheaper. Unfortunately, it isn’t. If you use a package holiday, you’ll be buying your holiday from an agent. They will search through the indexes and systems to find the right holiday for you including hotels, flights, add-ons and anything else that you might have asked them about. They’ll then bunch all these items together. But on top of that, you’ll need to pay for their services. Agents will typically add money to the cost of your flight to cover their service. As such, instead, it’s far better to use sites like Lastminute.com to find your own. Right now, it’s possible that your holidays are costing you a fortune, but they really don’t have to.

A group of people on the beach on holiday

Throwing It Away

How much do you spend on shopping every week? Fifty, a hundred or more? If you’re spending a lot on food, you at least want to make sure that you’re getting the greatest use out of it possible. But most people don’t because leftovers get binned. Instead, you should be saving these, freezing what you can. With the right planning, you can have whole meals frozen ready to feed your family another day of the week. You’ll be amazed how much money this will save you overall.

Spaghetti bolognaise. Dinners can be prepared from frozen leftovers

We hope you find this advice useful when you’re looking for ways to cut back the waste in your life. Do you have other suggestions? Leave a comment!

*This is a collaborative post.

Your Family And Finances: The Rules

When it comes to your family and finances, you need to make sure that you’re handling them the right way. Many people don’t realize that the way they handle their finances and talk about their finances teaches their kids everything they believe about money before they’ve even grown up and had a chance to experience it for themselves. Take a look at your family and finances: the rules…

Your Family And Finances: The Rules title on faded background image of pennies

Always Use Positive Language When Discussing Money

When talking about money, especially in front of your kids, always use positive language. If you talk about money in a negative way, they’ll have a bad relationship with money right from the start. You don’t want that!

Have Regular Meetings

Having regular family meetings where you discuss money, amongst other things, can make it less of a taboo topic of discussion for your family.

Give Your Kids Pocket Money

There’s nothing wrong with buying kids things that they want, but giving your kids pocket money is usually a better way of going about it. This way, your kids get to decide how to use their money early on. Do they want to save it up for a bigger purchase, or spend it on something small? You can use this as an opportunity to get them into their own saving habits, too.

Get Into Good Saving Habits

Make sure you’re in good saving habits. This will be evident to your kids and they will learn from watching you – it’ll also make your family less stressed out when an emergency payment or something of importance pops up! Take a look at the superhero saving habits below for help:

credit to Sunny

*Disclosure: This is a collaborative post.

Easy Ways To Save For Your Family Adventures

Family adventures are great, but unlike the ones you read about in books, they cost money. Whether you like to plan for big trips or days out, it’s nice to have a little rainy day fund to help you pay for your adventures. A family has a lot of expenses, making it hard to put money away, but thanks to these clever savings ideas you can help your family save easily for your next adventure…

Easy Ways To Save For Your Family Adventures title. Sunset beach image with family on pier.

Don’t Buy Anything Without Checking For A Voucher First

In the age of internet shopping, it is possible to find discount codes for almost anything – including days out. It only takes a few minutes to do a quick search, but you could save a lot of money on things you were planning to buy anyway.

Vouchers from supermarkets, clothes shops and other places could help you save a few extra pennies to put towards your family adventures. Sites like Groupon are great for family dinners, and it’s worth signing up to VoucherCloud and other discount code websites too. Always do a price search and see if you could save yourself some money.

Sell Your Unwanted Items

Each Christmas or birthday helps you realise just how little space there is in your home, and how much stuff doesn’t get used. Instead of just letting unwanted items clutter up your home, sell them. If you’ve got streaming subscriptions, you can easily save yourself some money by selling off your old DVDs and Blu-Rays, while unwanted clothes and toys are perfect for eBay. If you want an easy way of posting your items, https://www.shiply.com/ is a great service to make shipping your items a breeze. Having a regular clear out not only helps you to make a bit of money but will keep your house in order too.

Keep A Forfeit Jar

Many families have swear jars, but if your family tends to be good on the bad language front, you might want to consider a different kind of forfeit jar instead. You could have one for anytime someone forgets a household rule, or whenever someone leaves a light on in the house. Keep it up and at the very least, you’ll stop some bad habits, while the best you can expect is a nice healthy sum for your savings pot.

Cut Your Bills

It’s becoming more common for people to switch providers for everything, including your utilities and banking. It’s worth ringing other providers for a quote and seeing if your current provider can match it. There are some great ways to haggle with service providers that can at least get you a temporary saving. Put the difference into savings and watch them grow month after month.

Saving money can be a fun and rewarding challenge for all the family, helping you to afford those little extras. Looking for some more great money saving tips? Check out this useful article on how to what to do when you need money fast. Enjoy finding ways of saving money with your family so that you can look forward to creating many more happy memories together.

*Disclosure: This is a collaborative post.

What To Do When You Need Money Fast

If you’re in a bind and need some quick cash it can be a very frustrating and emotionally distressing position to be in. Nobody likes to be backed into a corner, but if unfortunate circumstances prevail then what you really need are some options – and you need them fast. So here is some inspiration as to how to get a prompt cash injection to help you through difficult times…

Title 'What To Do When You Need Money Fast' with background image of clock and piles on coins

Declutter

You might be surprised by just how much some of your stuff is worth, particularly if you happen to have any collectibles lying around. Even if you don’t have single items of value, decluttering and selling what you no longer need can quickly add up. You can list them on ebay or local selling sites on social media. Or even have a carboot sale!

Sell Your Old Phone

How many of us still have our old phone laying around? It is easy to shove it in a drawer and then promptly forget all about it! But, as I already mentioned above, selling on unwanted or discarded items that are just laying around unused can really help when you are at a pinch. And old phones often have a decent value, especially if it is still in good condition and working order, which is often the case if you upgrade regularly. You can expect even more if you had one of the latest models at the time and it hasn’t been sat around too long! So this item in particular is one to note when looking for items to sell. Of course, the same goes for tablets too.

Find Your Creative Flair

Another thing you can do is to look in the free adverts section, or check out freecycle, then upcycle the items to create something worth selling. Again, you can promote these items on eBay or, with a little creative flair, you could even create an Etsy store.  Try to think outside the box in terms of what are the growing trends and you can make a fortune.

If you are a good photographer, or even artist, why not try selling some of your own work? Either as digital downloads on one of the many stock image sites, on a canvas or as small prints.

If you have a craft skill you could also make handmade items to sell.

Sell Gift Cards

Exchange gift cards for cash. Do you have any gift cards that you haven’t yet spent? Assuming you can’t spend them on essentials, try selling them on local selling groups, or sites such as Zeek.

Market Research Participation

There are tons of market research companies, both online and offline, that require you to simply provide your opinion on a variety of products and services.  The work itself doesn’t pay much, but it can be practically instant and requires no track record, skills, experience, or protracted interview and onboarding process.  The work itself is limited mostly to filling in a few questionnaires and offering verbal feedback.

Odd Jobs

Take a step out of the thirsty teenager’s book; where they’ll knock on doors or leaflet drop offering their services – mowing laws, cleaning windows, walking dogs, chopping down trees, doing ironing; whatever it is, they’ll be open to doing it.

There are plenty of things people will pay money for, particularly the time starved, that you can offer to help them with. It might sound a little embarrassing but you will be amazed by how open some people can be to paying cash for odd jobs they need doing but can’t find the time.

Temporary Work

You could also ask to take on extra shifts at work, or enquire about any potential overtime opportunities. If this is not an option, you could try temp agencies. There are often temporary assignments available, particularly if you don’t mind unskilled manual work and are happy to work shifts. Remember it is only temporary!

Casual Work

If you are more of an office based computer type person, there are online sites like fiverr. Or you could also look into casual work at local bars and restaurants too. Mystery shopper is another popular choice.

Get a Loan

In today’s global economic crisis and this prolonged credit crunch we have been experiencing, getting a standard loan from a bank is proving to be more and more challenging. Banks have an increased sensitivity to risk and are reluctance to lend to people. Not only that, but the interest on the loan is often a lot higher than it would have been ten years ago. Therefore, for many people, the option to get a standard loan from a high street bank isn’t all that viable,

If it is a real emergency, then there are a number of same day loan providers such as New Horizon that subject to approval can pay up to £2,500 within less than 15 months. Whilst this is convenient in an emergency, it is a very expensive way to borrow money so is best used as a short-term stop-gap solution rather than as a long-term financial strategy.

Renting Out Space

If you have a spare room in your home you may wish to consider taking in a lodger. Another popular idea, particularly if you live close to a commuter line station, is to rent out your parking space. Lastly you could even rent out your garage, if you have one. (Although beware of any insurance implications when doing so!)

Switch Your Bank

Sometimes when you switch to a new back they give you an incentive, such as £250 cashback. If you shop around for such a deal you might find you are able to take advantage of one of these offers when you truly need it the most.

Ask! (Or at least talk to someone)

Consider if you have any family or friends you can open up to, and explain the situation. Even if they can’t help in a practical sense, you will probably feel much better having talked it through with someone. And they might well help you out if they possibly can in one way or another. Just like you would hopefully do for them!

*This is a collaborative post.

Home Education on a Shoestring 

This post discusses how you can save money on home educating and still provide plenty of home ed opportunities. It is a common misconception that home educating is expensive and unaffordable to most. However, many home educators successfully home educate on a tight budget and there are lots of ways to make home educating affordable. The truth is, home education can be as cheap or expensive as you want it to be. Plus with the money you would spend on uniform, trips and lunch money, school is not necessarily a cheaper option either!

It is a common misconception that home educating is expensive and unaffordable to many. However, there are actually various ways to cut the costs, and many home educators successfully home educate on a tight budget. Here are my top tips…

Trips and Activities

Join your local home ed facebook group

In many areas, home educators organise trips and activities together as a community, in order to access cheaper group entry charges or school rates. This often also includes educational workshops that wouldn’t otherwise be available to individuals.

Look out for discounts/ offers to local attractions

Find your local community magazine, join an online group that shares local information or sign up to attraction newsletters direct; whichever way suits you personally to stay up-to-date with the latest offers and discounts for local attractions. Some places also do free open days etc… that it is worth taking advantage of too. If you make a point of seeking them out, you’ll be amazed at how much you can actually save!

Research free places to visit

Following on from the previous point, there are lots of free places to visit, and events throughout the year, that offer great educational opportunities. From museums to sporting events, there is plenty to choose from without getting your wallet out.

home education, homeschooling, home ed, freedom to learn, budget, finance, money saving, educational resources

Form a co-op, or arrange your own groups/ activities

If you can find a free (or cheap) venue, many home educators lead groups and activities themselves, or with other members of the local community. You can play on each others’ strengths and expertise, plus pool together resources, which can be far more cost effective than paying for classes etc…

Resources at Home

Find freebies

There are lots of free good quality resources on the internet. Also check out freecycle for useful items that someone else no longer needs. Occasionally there is even old equipment from local schools up for grabs, if you know the right people!

Borrow

You can also borrow and swap with other home educators, which makes far more sense than investing in something that is only needed for a short term topic or limited age- range for example. And of course, there are libraries too!

Buy secondhand

There are dedicated home ed selling groups on facebook to find cheap secondhand resources. Charity shops are another place to hunt for bargains; there are some great finds to be had.

Sell the resources you no longer use

Obviously, as well as buying secondhand, it is also useful to sell your resources on if you no longer use them! Or hand them down to someone else who needs them, in a pay it forward type philosophy.

Make the most of subscription discounts

Some educational apps and websites charge an annual subscription fee. However, many offer a discount for home educators so be sure to find out before you sign up.

home education, homeschooling, home ed, freedom to learn, budget, finance, money saving, educational resources
Twinkl is great for educational resources

What About Income Though?

It is true that the loss of earnings can be a challenge. It is all very well finding ways to save money on the cost of home educating, but it doesn’t help if you don’t have any money coming in to begin with! (Note: Home educators are not entitled to any additional extra benefits simply because they home educate, and there is no funding specifically for home educators).

However, many home educators do also work. Firstly, it is important to remember that home education does not need to observe school hours and term times so there is flexibility as to how and when a full time education is provided. Secondly, there are various jobs that you can do flexibly working from home, or ways you can juggle home educating with working outside of the home. Here are some ideas…

Home Working

Just a few examples of jobs people do at home while home educating are; tutoring, childminding, workshops/ classes, blogging, making and selling crafts (e.g. etsy store) or other small businesses.

Working While Home Educating

Parents often share responsibility for home educating with each other, other family members or friends. Some use a childminder for part of the week, then focus on home education outside of those hours. Others take advantage of educational groups or childcare schemes that they can send their child to whilst they work. It is also possible to find evening or weekend work too. Bottom line is, there are various options available, much like you would choose at pre-school age.

Do you have any tips on how to finance home education? Or how to home educate on a budget? I would love to hear them!

The Pocket Money Debate: How Much, How Often and What For? 

We have recently been discussing pocket money and debating whether it should be earned or given? If it is to be earned, what should it be for? And how much is reasonable?

Personally, I feel that the concept of earning money is important. It helps to promote independence and a good work ethic. But I struggle on what it should be given for because I feel it has the potential to also encourage an expectation to be paid for things that I feel should be done for other reasons. 

After all, we should all help to keep our home clean and tidy because it is a shared space; we all live here, so we each have a responsibility toward it. And we should behave with kindness, respect and consideration toward others simply because it’s the right thing to do. It is intrinsic – at least I certainly feel it should be – is it not? What about for educational activities then? But does that then make them a chore, rather than doing it out of interest and curiosity and for the simple love of learning? I feel this way about sticker charts and the like, so surely money is no different. 

But, at the same time, I do also firmly believe that our main goal in life should be to find our passion. In an ideal world, people can do what they truly love and make money from it, but it doesn’t really feel like work or a ‘job’ because they would choose to do it anyway. In my eyes, that is the dream to aim for! So does paying pocket money for things the child would do anyway actually reinforce this mindset and therefore is a good thing?

pocket money, goHenry, parenting, finance, money, savings, life skills, independence, responsibility, general life, earning money, chores, Living Life Our Way

The fact is, I don’t actually have any answers! I think the best approach is probably different for each child, and family, depending on their priorities and personal set of values. And I also suspect the answer chances at different points throughout childhood too.

We have played around with a few different ideas over time, with varying levels of success, and certain pitfalls after a while too! One choice we are happy about though is setting up a goHenry account so she could have her own card and also be able to shop online with her own money. I think this is really good for independence and teaching essential life skills. You can set up a goHenry account online quickly and easily, and it gives options to write tasks and/ or transfer a set weekly amount so is quite versatile. We have found this works well for us! If you sign up through the referral links in this post, you get free custom goHenry card worth £4.99 plus 1-month free

I also asked some fellow bloggers on their opinions of pocket money and here are some of the responses I received:

Two Hearts One Roof ~ OK my little one is too young for pocket money, but I will be doing the same as my parents did for me. I had £5 a week in my money box and £5 in my savings towards holiday spending money, or if I really wanted to save for something big. Then I could earn extra doing chores or helping out my parents, neighbours or grandparents. I spent a lot of sunday mornings ironing as I could do that in front of the TV and I didn’t mind. Mum would price a whole basket depending on how difficult it would be and how many items. Our dude will have the same system when he is old enough. Plus any money from grandparents or for birthdays/ xmas – half goes in savings and half to keep on hand. We already do that and he is 1; half is in savings and half for something now.

Whimsical Mumblings ~ My little ones (2&3) have a ‘kindness’ reward chart and get a star everytime they do something kind. When the chart fills up I give them a pound or two to put in their piggy banks.

My Boys Club ~ We started our boys off in 50p for washing the car or making their beds each week etc. We pay for all their activities, clothes etc but trying to teach them the value of money from a young age.

Dark Tea ~ We started giving our daughter pocket money when she was 7 (she’s almost 9). She gets £2 and has to save half of it. She occasionally earns more by doing chores above the normal such as mopping floors and helping in the garden.

Champagne and Petals ~ We don’t really do a weekly pocket money. My 8 year old gets money for doing little jobs around the house. Feeding the cat, making his bed, opening his curtains. Or helping in the garden and washing the cars. No more than £5 a week. However as he gets older and is wanting to spend money on things then I’m sure it will increase, as will the jobs he has to do to earn the money.

Pack The PJs ~ My two get £5 each, weekly, paid direct to their GoHenry cards. All we ask in return is for them to take some responsibility of their stuff and their rooms. We have stopped it in the past when they’ve been a bit disrespectful of their belongings (or each other). It works well – it also means they have on average £50 to spend if we go out. When they spend their own money you notice that they stop and ask themselves if they really need it before committing!

Family Travel With Ellie ~ I have recently started a Go Henry account for my 10 year old son. He gets £2.50 per week and the gets an extra £2 if he cleans out the rabbits and and extra £2 if he mows the lawn/ cleans the car or similar. It’s a great adaptable account , he gets a debit card with it which gives him a sense of responsibility and independence.

Neon Rainbow Blog ~ We also use Go Henry for our 11 year old, he gets a card which is contactless and an app to track his chores. I get an app too which I can load ‘tasks’ onto so each time he ticks off a task, the money goes from my parent account to his Go Henry account. He does things like tidying his bedroom, hoovering, dishwasher, plus we give him perks for things like homework, SATs results, good manners, selfless deeds.

Hello Cuppies ~ My son is 12 and he gets £35 a month and it transfers straight to his bank account which he then has to manage himself. It does come with conditions though; no discredits from school, no missed homework and all chores done. I think we’re quite generous but this does have to pay for quite a lot of little luxuries which do add up.

Frugal Family ~ My teenager gets £50 a month which she uses to buy anything that I consider non-essential. My son gets £5 a week as he’s younger and doesn’t go out as much with his friends yet. I don’t pay them for doing jobs around the house as I think that should be an automatic thing, seeing as they make more than their fair share of mess. But I do link pocket money to behaviour, so if they suddenly refused to do their jobs or had a bad attitude then they wouldn’t be paid.

* goHenry is an affilliate link which means I generate a small revenue from referrals. All thoughts and opinions about goHenry are my own. Thank you for the support.