Tips for Getting Kids Started with an Allowance

GoGirl Finance
Tips For Getting Kids Started With An Allowance (image)
Tips For Getting Kids Started With An Allowance (image)

This article was written by Melissa Batai of GoGirl Finance.

Mom, can I have 20 bucks?  I’m going to the movies.

Dad, I’m going out with Joe.  Do you have 30 dollars for me?

Ah, the teenage years. Filled with homework, angst, and those endless requests for money.

What if you could do things differently? What if you could teach your kids how to budget and manage their own money so that you didn’t have to feel like a human ATM?

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Many parents are doing just that by giving their kids an allowance from a young age. By giving your kids money to manage themselves, you’re educating them about finances AND teaching them responsibility.

But when’s the appropriate time to start? And, more importantly, how?

When Should You Start Giving Your Child an Allowance?

There’s no perfect age, but Liz Weston, author of Deal with Your Debt and There Are No Dumb Questions about Money says “most experts say allowances can start around age 5 or 6. Money attitudes are pretty well set by age 7, so you want to get a head start if you can. We started our daughter earlier, at 3-1/2, because that’s when she understood that money could be used to buy things. We wanted to teach the importance of saving and sharing as well.”  As Weston suggests, when your child begins to understand the buying power of money, it’s a good time to start giving her an allowance.

Should An Allowance Be Tied to Chores?

Again, you need to consider what will work in your family, given your dynamic. In our household, kids are responsible for some tasks simply by virtue of being a family member. They need to put their dirty clothes in the hamper and take their dishes to the sink when they’re done eating. They also get paid for some tasks like putting away clean clothes, making their beds, and vacuuming their bedroom. If they choose not to do their chores, I don’t sweat it.  That’s simply money they choose not to earn. It also means they have less to spend.

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Weston carries this one step further with her own child. “We require certain chores as part of our daughter’s family responsibilities, and pay extra for additional chores when she wants to earn extra money,” she says. “She also pays a penalty if she doesn’t complete her chores each week.”

Should You Set Any Guidelines on What Your Children Can Do with Their Allowance?

As a child, my mother put no restrictions on my allowance, which meant I spent endless amounts of money on trinkets, food, and teen magazines.  While I was happy at the time, I struggle with saving to this day.

I’m a big Dave Ramsey fan, so I’ve taught my children, especially my oldest, that some money must be set aside to save, some to give, and some to spend.  We use the 20 percent (save)/10 percent (give)/70 percent (spend) ratio.

Because he’s known the concept of giving from a young age, he has a generous heart.  Whenever there is a weather-related tragedy, like the recent typhoon in the Philippines, he takes out his money to donate without prompting from us.

Weston says that kids should be required to put money aside in savings at the bare minimum. “Savings is something that’s best inculcated at an early age—you want to ingrain that habit. So my daughter is required to save a portion of her allowance and any money she gets from outside sources. If she wants something special, she can save more to buy that.”

Melissa Batai is a freelance writer who writes about money and food, two necessities in life.  She lives in the Midwest with her husband and three kids.  She regularly contributes to personal finance blogs such as Bargaineering and Free from Broke.  Catch up with Melissa at her blog,, where she writes about food, frugality and getting out of debt one payment at a time.

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