How Much Allowance by Age
Set your kids up for financial success. Learn age-appropriate allowance amounts and how to teach money skills that last a lifetime.
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Why Allowance Matters
Allowance isn't just about giving kids money - it's about giving them a safe space to practice money skills. Making mistakes with $5 now is much better than making them with $5,000 later.
Goal Setting
Learn to save for something they want
Decision Making
Practice spending choices safely
Delayed Gratification
Waiting builds financial discipline
The Goal of Allowance
The purpose isn't to provide spending money - it's to provide learning opportunities. Letting kids make small mistakes now prevents bigger ones later. Resist the urge to control every purchase.
Allowance Guide by Age
These are general guidelines. Adjust based on your family's financial situation, cost of living, and what expenses kids are expected to cover.
4-5 years
$1-2
per week
Focus: Understanding money basics
Skills to teach:
Tip: Use a clear jar so they can see money grow. Start with coins - they're more tangible than dollars.
6-8 years
$3-5
per week
Focus: Saving for goals
Skills to teach:
Tip: Introduce three jars: Save, Spend, Give. Help them set a savings goal (a toy, book, etc.).
9-11 years
$5-10
per week
Focus: Budgeting basics
Skills to teach:
Tip: Let them make mistakes with small amounts. A bad purchase is a valuable lesson. Discuss opportunity cost.
12-14 years
$10-20
per week
Focus: Managing larger amounts
Skills to teach:
Tip: Consider a bank account with debit card. Give more responsibility for their own expenses (entertainment, treats).
15-17 years
$20-50
per week
Focus: Real-world money skills
Skills to teach:
Tip: Include expenses like clothing, entertainment, or gas. Encourage part-time work. Discuss college costs.
Common Rule: $1 per week per year of age (e.g., 10-year-old = $10/week)
Adjust up or down based on expenses kids are expected to cover
Allowance Methods: Which is Best?
There's no single right way to give allowance. Here are the main approaches and when each works best.
Set Weekly Amount
Same amount each week regardless of chores
Pros:
- Predictable for budgeting
- Separates money from family contributions
- Less accounting for parents
Cons:
- • Doesn't teach work-reward connection
- • May feel like entitlement
Best for: Teaching budgeting and saving skills
Chore-Based Pay
Money earned for completing specific tasks
Pros:
- Teaches work = reward
- Motivates chore completion
- Mirrors real-world employment
Cons:
- • May refuse unpaid chores
- • Requires tracking
- • Debates over what counts
Best for: Teaching work ethic and earning
Hybrid Approach
Base allowance plus bonus for extra chores
Pros:
- Combines benefits of both
- Provides stability + earning opportunity
- Distinguishes family duties from earning
Cons:
- • More complex to manage
- • Requires clear chore categories
Best for: Balanced money education
The Three-Jar System
Teaching kids to divide their money builds habits that last. Use clear jars so they can see their money grow!
Save
40%Long-term goals
Teach delayed gratification. Set specific goals (new bike, video game). Consider matching contributions for extra motivation.
Spend
40%Fun purchases
Their money to spend freely on small wants. Letting them make mistakes here is valuable learning with low stakes.
Give
20%Charity and gifts
Builds generosity and awareness of others. Let them choose the cause or person. Include gifts for family members.
Making the System Work
- Use clear jars so kids can watch money accumulate
- Help set specific savings goals with target amounts
- Let them choose their own charity or giving recipient
- Review jars together monthly to track progress
- Consider matching savings contributions for motivation
- Don't micromanage the "Spend" jar - it's for learning
Money Lessons by Age
Ages 4-6: Money Basics
- Name coins and their values
- Count coins to make different amounts
- Understand items cost money
- Play store with real coins
- Wait for something you want
Ages 7-10: Saving & Spending
- Compare prices when shopping
- Save for a specific goal
- Make change correctly
- Understand wants vs. needs
- Wait for sales on wanted items
Ages 11-13: Banking & Budgeting
- Open a savings account
- Track spending for a month
- Create a simple budget
- Understand interest (earned/paid)
- Research before big purchases
Ages 14-17: Real World Finance
- Get a part-time job
- Understand taxes on earnings
- Learn about credit and debt
- Save for major goals (car, college)
- Compare financial products
Frequently Asked Questions
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