Microsoft 365 Life Hacks > Budgeting > How Much Allowance Should You Give Your Kid Based on Their Age?
August 02, 2022
Kids like having their own money just like adults do. Giving your kid a weekly allowance can make them feel empowered while also helping them build responsible spending and budgeting habits.
What Is an Allowance?
An allowance is set amount of money you can give your kid for a recurring period of time, like on a weekly, biweekly, or monthly basis. There’s no age requirement for an allowance because it’s something you can do within your own household. Introduce the concept of an allowance to your kid when you feel they have a basic concept of money and counting. If you don’t feel your child is ready to manage an allowance, you can put money in a savings account for them until you start the allowance process.
You can start your kid off with a small allowance, even if they’re 5 or 6 years old, and increase their earnings as they get older and understand finances more. Giving your kid an allowance helps them build their financial capability while increasing their skillsets in and out the home.
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What Are the Benefits of Giving Your Child an Allowance?
An allowance can serve as an incentive for your kid. Giving them the same amount of cash weekly, or biweekly, can teach them how to budget and spread their dollars for what they want. This financial tool can help them prioritize how they spend their money or if they want to save their money for something more costly down the line. An allowance may also teach your kid the value of a dollar because they’ll see how much it actually costs when you buy them the things they need and want.
What Are the Downfalls to Giving Your Child an Allowance?
Giving your kid an allowance can be a positive, educational experience if you do it properly. However, one of the downfalls in giving your kid an allowance is that you’ll need to be consistent in order to support their budgeting techniques. If your money is tight or if you experience a change in income, it might be difficult to give your kid an allowance as often as agreed upon. Once you’ve decided a good allowance amount to give your kid, it’s also important to instill the values and lessons that you want them to learn throughout the allowance process.
If your child receives an allowance after completing their chores, you don’t want them to think that the only times they should contribute to household work is when they’re getting paid to do so. You also want them to continue doing their chores even after they’ve saved enough money to buy that great toy or video game. Have discussions with your kid about why you’re giving them an allowance while also showing them appreciation for how they contribute to the family.
Have Conversations with Your Kid About Their Allowance
Keep the lines of communication open with your kid throughout the allowance process. Allow them to build their negotiation tactics as they get older if they feel that they should get a higher allowance. Talk to them about the importance of working hard toward their financial goals but also emphasize the importance of saving money for a rainy-day fund where they want to buy something or do something at the last minute.
Also talk to your kid about the value in being humble and grateful. Their friends might receive allowances too, and some might receive more than your kid while others might receive less. Remind your child that while it’s okay to be proud of themselves for the allowance they receive, an allowance isn’t a competition amongst them and their friends. Encourage them to be just as proud of their friends who are receiving allowances as well.
“Age might be one factor you consider along with what you expect them to do with the money you give them.”
How Do You Decide How Much to Give Your Child as a Weekly Allowance?
There are plenty of factors you can consider when deciding how much and how often to give your child their allowance. Age might be one factor you consider along with what you expect them to do with the money you give them.
A 5-year-old might not have as many costly expenses as a 13-year-old. If you pay for all their necessities, your kid might save their allowance or spend it on smaller interests, like books and toys. An older kid might have a better understanding of financial concepts, so you may let your 13-year-old manage a higher weekly allowance than your 5-year-old. You might also consider things like costs of activities based on the area you live in and transportation costs if your kid is enough to take public transportation to different places.
After you determine what type of things your kid might use their allowance for, decide why and how you want to distribute their allowance. Will you be paying your kid per chore that they complete? Or are you giving them an allowance, so they have their own spending money? You can have more than one purpose for their allowance and give them more than one way to earn their allowance. When you decide the logistics of how, when, and why your kid earns their allowance, communicate those details with them so that you both are on the same page.
What Is the Recommended Average Allowance by Age?
When deciding how much allowance you should give your kid based on their age, interests, and local activities, you should also consider your own budget. Only give within the limits of what you can afford to give on a consistent basis. While there’s no set amount for an average weekly allowance by age, some parents pay their kids $1 to $2 per week for each year of their age. Under this model, kids at different ages would receive approximately:
- 5 years old: $5 to $10 weekly
- 8 years old: $8 to $16 weekly
- 10 years old: $10 to $20 weekly
- 13 years old: $13 to $26 weekly
- 15 years old: $15 to $30 weekly
You can also base your kid’s allowance on what type of chores they complete around the house and how much you think each chore is worth once completed. For example, cleaning their room might be worth $5 whereas your kid washing the dishes may be worth $10 or them helping rake leaves might be $15. If you use a chore-based method, put a visual list on the fridge or another easy-accessible place that names the task and about how much your kid can earn by completing it.
Set an allowance for your kids based on how you evaluate their understanding of what an allowance is and what they’re financial desires are. Come up with an amount and recurring time that best fits your budget. Discuss good financial habits like budgeting and saving so that your kid can learn how to be fiscally responsible while also improving their work ethic.
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