Saving starts at the kiosk

Margrith von Holzen would never describe herself as an expert when it comes to pocket money. But that is what she is.

For some years now, the 62-year-old has worked at the kiosk in the center of a village on the outskirts of Lucerne, from where she observes the consumer behavior of kids and young adults – many of whom stop by each day.

The children have a lot of money to spend, says von Holzen. “More than we ever had anyway.” However, not much has changed over the years regarding the preferences of young consumers: “Even today, candies still top the list of things to buy.”

Marianne Heller confirms this observation. She works for Pro Juventute, where she is responsible for the debt prevention and consumerism program. She is acutely familiar with the spending patterns of children and young adults. From an educational point of view, Heller believes no-one should really object to schoolkids spending their weekly allowance at the kiosk.

“The main point of giving your kids an allowance is to teach them how to handle money. They learn that everything in life costs something and develop more realistic ideas about what they can buy for themselves.”

However, the decision to buy must be left up to the child, without interference from the parents, says Heller, who firmly believes it’s the only way kids learn to take responsibility for their actions.

According to the expert, it’s important to talk about money within the family. “From junior high onward, we recommend paying a monthly rather than a weekly allowance,” says Heller. By extending the time frame, you enable youngsters to look further ahead. “If you speak to your children about what they want, more complex topics like saving or the temptations of consumerism can be addressed.”

In dealing with prospective purchases, dividing pocket money into short-, medium- and long-term savings goals is recommended. This process can be subtly controlled, if need be. “Kids are more likely to set part of their allowance aside if they are given five individual francs instead of a single five frank coin,” explains the expert with a wink of the eye.

Parents should avoid using pocket money as a reward or punishment. Heller emphasizes that they should neither withhold or arbitrarily increase the allowance so as not to muddle learning concepts that should really be kept strictly separate.

At the same time, children are responsible for respecting the family’s rules in relation to allowances: “If candies are banned before dinner, then that also applies to any gummy bears the kids buy themselves.”

Pro Juventute recommends the pocket money table (see below) drawn up by Budgetberatung Schweiz, Switzerland’s budget advisory association, as a guideline for all age groups. The rule of thumb is one franc for each primary school grade. “At the end of the day, the pocket money has to be compatible with the household budget of the family in question,” says Heller. “Pocket money is one way of teaching children how to handle money, but it isn’t an absolute necessity.”

Heller wouldn’t dare to comment on the extent to which Swiss parents actually follow these recommendations. She naturally comes into contact with extreme cases in her day-to-day work, but she does not consider them to be representative. A study by market research institute GfK in 2006 estimated that 6- to 17-year-olds in Switzerland received almost 650 million francs a year in allowances and gifts of money.

Industry has been aware of the fact that pocket money is an economic factor and minors are a promising target group for some time. According to a German study, the wishes of kids and young adults influence up to one quarter of the purchasing decisions made by adults.

The young academic discipline of gender studies has recently turned its attention to pocket money. A survey by British bank Halifax revealed that boys get 12 percent more pocket money than girls on average. The German Federation of Building Societies found a discrepancy of almost 19 percent in its study. It makes you wonder anxiously whether the gender gap starts at primary school age. That possibility cannot be ruled out. But it should be easy to prevent.