5 Reasons to Give Kids an Allowance

At the foundation of your children’s financial intelligence should be this undeniable truth: It is not the amount of money you have, but what you do with it that matters.

This is true for a child managing a $5-dollar-a-week allowance or a corporate executive with a $5,000-dollar-a-week salary.

Money and Saving


For the better part of my life, I didn’t know this truth. On the contrary, I believed that more money was the answer. I was convinced that if we just made more money, won the lottery, or received some unexpected inheritance, all of our money problems would vanish. But the more we made the worse our problems became. Because I didn’t know how to manage what we had, more would have never been enough. We didn’t save, we didn’t give, we didn’t plan, and we had no idea where all the money went.

Unless your children learn simple, wise money management techniques, more money will never be enough.

The simplest way to get started building financial intelligence into your kids’ minds and hearts is by putting them on an allowance and then requiring them to suffer or enjoy the consequences of their financial decisions.

5 good reasons to put kids on an allowance program

1. Teach kids about real life

Nothing beats an allowance for a hands-on course in values. Having their own money teaches them about responsibility, consequences, saving and charity.

2. Help distinguish needs from wants

Do they really need that new video game or those peace sign earrings? Having their own money forces kids to think about what to spend it on. It doesn’t take long for them to realize that when it’s gone—it’s gone!

3. Put an end to the nickel-and-diming

You create a set budget item called “Kids’ Allowances” and that stops that constant drip, drip, drip of money flowing from your pocket to random stuff for them.

4. Build trustworthiness in a child

By giving kids money to manage, you demonstrate that you trust them. And they soon learn that to keep the money coming, they need to become trustworthy.

5. Promote self-confidence

Managing money has a magical effect on a child’s self-esteem. Teaching kids how to give some of their allowance to charity, save some for a long term goal, and spend some now gives them the tools of self-reliance.

Start young

There are no set rules for when to start an allowance program. However, I suggest waiting until kids are old enough to understand the concept of taking care of things and making choices, which is usually around age 6.

How much?

Though many families use age to determine the amount (by age, $10 for a 10-year-old is one example), think about how much money your child needs. Turning money over to them that you would be spending on them anyway is a good way to start thinking about this.

How often?

Whether it’s weekly or monthly, kids do better when you stick to a schedule.

Younger kids tend to manage their money more effectively when they get it weekly, since out of sight often means out of mind.

For older kids, consider a monthly schedule so they can learn about budgeting.

Work for pay?

Think about your goals when it comes to the allowance-for-chores quandary. If your main goal is to teach your kids to manage money, give them a basic allowance with financial “chores” attached, such as paying for their own collectibles. If you also want to teach kids the value of working for pay, pay them for extra chores on a job-by-job basis.

Back off

The purpose of an allowance is to teach kids to become self-governing with money. Encourage kids to save a given percentage, set aside a percentage for charity (they’ll learn the value of giving back), then give them the freedom to decide how to spend the rest.

Physical bank

Want to get your children’s allowance program off to a great start? Make sure they have some kind of physical bank, box or jars that will help them to divide and manage their money. Consider the Moonjar Classic Moneybox. This clever savings bank is actually three banks in one to teach children to save, spend and share their allowance.


A close up of a box


Over the years Moonjar has received multiple awards for innovation and it’s no wonder. Moonjar is well made and easy to use because kids even as young as age 4 years can understand and learn from the process. It makes for a timeless gift that will inspire and teach children to save, spend and share wisely for a lifetime.

My life

On my way to getting a financial life, our kids got one too. Our boys were ages 6 and 7 when I hit rock bottom and experienced a turning point that would go on to change my life forever. My husband and I came up with what we called the Hunt Kid Financial Plan that we instituted in our family, even while we were deeply in debt. I was so determined that our boys would not turn out like me. And so … we all learned together, although the kids were totally unaware of what was going on in our lives. They took to the plan and ducks to water!

Had our plan not been successful, I would have never written a book about our journey and our kid plan in detail. But it was successful and I’m proud to tell the world that our sons, now adults, are two uniquely awesome, financially confident men. No credit-card debt ever, no student debt ever. Both sons bought their first cars with their own money—all cash they’d saved—at age 16. Both sons went on to become homeowners in pricey Orange County, Calif., by age 25. Bottomline: We debt-proofed our kids and it all started with an allowance program.


A vase of flowers on a table


I would be honored for you to read my book, Raising Financial Confident Kids. It tells our story, details our plan and is as relevant and practical today as this plan was years ago when we first came up with it.

Interested in learning more great ideas for building your child’s financial literacy? Raising Financially Confident Kids by Mary Hunt, is available here and wherever fine books are sold.

First published: 11-28-16; Updated 4-24-19

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8 replies
  1. Joyce Spencer says:

    My parents did this for me way back in the 50s. My first allowance was when I was about 6 or 7. I kept 3 jars in my drawer for the giving, saving, spending categories. I think my first allowance was about a dime a week, increasing annually. I recall a couple times When my mom was short on cash and she asked to borrow from my jar. She gave me an IOU! Man did that feel good! I was 12 or 13 I got an annual clothing allowance before school started in the fall. I am ever so grateful to my parents for their their lessons and trust.
    That kind of training really works. I have never had financial problems.

  2. Carol Gesalman says:

    When my boys (I had no girls) were young, they received an allowance, 10% of which was donated to our church. They could spend the rest as they wished. If they wanted a toy they could not afford, I gave them two options: they could borrow the money from me and pay me back with interest ( a very small amount), or I would buy it and put it on “layaway” which allowed them to put so much on it every week until it was paid off (no interest) at which time they received the toy. When my boys turned 15, I quintupled their allowance and told them that they were now responsible for buying their own clothes and shoes and any food eaten outside our home. They also had to pay for dates and school activities, after giving the obligatory 10% to the church.
    Now I realize times have changed. My boys are now in their early 40s, so it’s been a while, but I still think there is value to allowing our children to budget and choose how and what to spend their money on. Thank you for your good advice, Mary.

  3. eBryce says:

    Mary, thank you so much for all you taught me about money, and for your book “Debt-proof your Kids.” I don’t think I would be where I am today, financially, without your wisdom and advice. I grew up getting a modest allowance, and so I gave my kids a modest allowance as well. And though I did encourage them to give and save, the biggest change occurred when I was out shopping for clothes one day with my oldest (then 7th-grade) daughter. It happened when I had a little “melt-down” in Target, trying unsuccessfully to turn her attention to various sale-priced clothes. In a moment of great frustration, I finally handed her the envelope containing her clothing money for the month. “Fine!” I said, “you pick out whatever you want. That’s what I have budgeted to spend.” She was literally transformed, before my eyes, into a frugal shopper! Now that the money was hers to spend, she immediately walked over to the clearance rack. What’s more, she now saw me as an ally, and began asking me to save the sale ads, and asking for my advice. Our battles were over! I decided to expand her monthly allowance to include everything I had already been paying for, including lunch money and money for birthday presents for her friends. Though it was not any more than I had already been spending, it seemed huge to her, and she became the envy of her younger brother and sister. Getting a “big” allowance became a rite-of-passage at our house. When her younger brother was old enough to get a monthly allowance, he quickly became frugal as well, figuring that if he worked in the cafeteria, he would get a free lunch AND get to keep his lunch money. He asked me to help him study, and to take him to get a food handler’s license so he could implement his plan. My kids are all grown now, and I could not be more proud of the superb, savvy money managers they have become. Thank you, Mary!

    • Mary Hunt says:

      eBryce … Your story is so heart-warming but I have to say that I’m not surprised. This is the same reaction we got from our boys when they went on the HKFP (Hunt Kid Financial Plan, as you now from the book). Right from the start (well, except for that first month with Jeremy), they taught themselves to be frugal. It was almost miraculous. Jeremy is now 42, Josh 41. As opposite as they are in so many ways, when it comes to money they are wise, conservative and very savvy. Financial wisdom comes so naturally for them. And I trace that right back to when they were in grade 6 respectively. With the money we trusted them to manage, they were required to save, give (share) and then spend wisely. Oh the stories I have! Thank you so much for your comment and letting all of us know how the book I wrote about our boys and the whole plan, How to Raise Financially Responsible Kids http://amzn.to/2gbZoqR (same book, just got a name change along the way … ) impacted your family. And please let your kids know that I think they are awesome! I am so proud … of all of you! m

  4. tinydogpries says:

    I must admit I never had the extra money to give my kids an allowance.(Single mom, low paying jobs), but I DID involve the kids in my budgeting plan (envelopes) and when he grew up my son told me that he used that method himself because he knew it worked. I like that bank, wish they would have had it when my granddaughter was growing up.


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