General How To

A Guide to Age-Appropriate Allowance for Kids

Allowance for Kids

It’s the personal choice of each family if and when to institute a weekly or chore-based allowance for their children. Most opt in because it is a great method to welcome children into the wonderful world of finances! Ways to earn money, strategies on saving it, and deliberating between choices on how to spend it. One of the most common questions parents ask is how much do I give my child? The answer to that question is generally age-dependent, but as they get older, you may also want to create a chore-based system as well.

Starting at Age 5-6

Kindergarten is when children start really developing an eye for money and why it’s earned and spent. They will be learning to count it in school (which will reinforce the skills you’ve practiced with them) and will be given different scenarios in spending it, and what to spend it on. Some kids aren’t ready for all of this at this young age, so don’t force the issue. If they are ready, the rule of thumb in 2022 is to give them between 50 cents and $1 per each year of their age. So a 5 year old would receive between $2.50 and $5. Even at this young age, guide them toward a consistent saving/spending/charity ratio. Consider them for chores such as:

  • Clearing the dinner table
  • Setting the dinner table
  • Organizing toys
  • Carrying in light groceries
  • Weeding the garden
  • Giving pets food and water
  • Folding and hanging towels and washcloths

 Age 7-10

The experts advise against allowance being used as a disciplinary tool. If the child receives a bad grade or has broken a rule, consider using another form of discipline and not reducing or cutting allowance. Allowance should be used as a tool for teaching. They should still be expected to work hard for good grades and they are always considered a member of the family, regardless of broken rules. The 7-10 year old child should have a base allowance with expected chores. You can add to the base amount with additional chores if you are both receptive. Chores for this age group include:

Now that they are a little bit older, you can choose to pay them in cash or use a gift card to be used at their favorite store. Continue to help them with the idea of saving for what they want. If there is an item at their favorite store they can’t quite afford, consider funneling their allowance funds into more gift cards to help them save specifically for that item.

Age 10-11

Teaching how to save and spend becomes increasingly important the older the child gets. To help reinforce the value of money and have them take responsibility for their own spending habits, keep track of what you spend on them for a week. Talk to them about what you will stop paying for (such as comic books, iTune downloads, etc.) and let them choose if they want to continue buying it for themselves or not. 

If your child runs out of money, don’t rush to bail them out as it will only undermine your attempts to teach them financial responsibility. It also removes any incentive they might have to earn and manage their own money. Appropriate chores include:

  • Drying the dishes
  • Washing their own laundry
  • Folding and putting away clothes
  • Prepping food 
  • Unloading dishwasher
  • Making easy breakfast meals like scrambled eggs

Teenage Years

Hopefully, by this time, your child is able to save money and make conscientious and wise decisions as to what to purchase. It’s also now time to get them into a savings and/or checking account situation with a debit card if you believe they can handle it well. Oftentimes, older teens will take on a job outside the home. Help them increase their own level of financial responsibility by having them pay for half of their cell phone bill or half of their car insurance premium. While you don’t want to suck their funds dry, you want to prepare them for real life situations so they can be independent when they leave home. Even if they do have an outside job, it should not preclude them from doing regular chores as they are also a part of the family. These may include:

  • Mowing the lawn
  • Watching younger siblings
  • Cooking a complete meal
  • Trimming hedges
  • Cleaning bathrooms
  • Helping with simple repairs around the house

Allowance is a great way to get kids into the habit of saving and spending their money on only things they need and truly want. With these practices solidly in place, they will be ready to take on their future!

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