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Teaching Children Money Skills with an Allowance

Giving your child an allowance can be a good way to teach basic money management skills. It can also promote good decisions about spending and saving.

It is up to you to decide whether or not to give your child an allowance. Make your decision based on what you think is best for your child and your situation.

If you decide to give your child an allowance

  • Decide on the amount. Only give an amount you are comfortable with and can afford. The amount itself is less important than the overall goal: teaching your child the basics of money management.
  • Choose an amount that is appropriate for your child’s age. Consider starting with a small amount as soon as your child is old enough to understand the connection between money and purchases. Talk with other parents and find out how much they are giving.
  • For example, a young child could receive $1.00 per week, which you can increase as he or she gets older.
  • Decide whether it should be earned or given. Some families believe that children learn the value of work and how to earn money by doing something and getting paid for it.
  • Others prefer not to link allowance to chores and prefer to use it mainly as a tool for teaching financial habits and values.
  • Both options have pros and cons, so you will need to decide what is best for your family.
  • Be clear. If the allowance is linked to chores, make sure your children know what chores they are doing for pay and what is expected for simply being part of a family.
  • Be consistent. Try to give the money to your child on the same day every week. This allows your child to plan so that he or she can learn to budget and save for future expenses.


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Date Modified:
2013-01-22