How to Introduce an Allowance (And What Rules to Set)
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When my oldest asked, “Can I get paid for cleaning my room?” I knew it was time.
Allowance—it’s one of the easiest ways to teach kids about money, but it also raises a ton of questions. How much? How often? Should they earn it or just receive it?
If you’ve been wondering how to start an allowance for your kids (without it turning into a weekly power struggle), here’s everything you need to know—plus 5 rules that’ll save your sanity.
Why Even Bother With an Allowance?
Giving kids a regular allowance teaches them how to:
- Handle money without immediately spending it
- Make mistakes while the stakes are low
- Set goals and practice saving
- Understand value and delayed gratification
And let’s be honest—it’s way better than arguing about “Can I buy this?” every time you go to Target.
When to Start
Most kids can start learning with money around age 5 or 6, when they understand counting and basic wants vs. needs.
Start small. Even $1 to $3 per week can teach a ton at that age. The key isn’t the amount—it’s the habit.
How Much Should You Give?
There’s no one-size-fits-all, but here are a few ideas:
- $1 per year of age is a common rule (so a 7-year-old gets $7/week)
- Use weekly or biweekly payouts—whatever you can stick with
- For younger kids, stick with cash or jars (Save, Spend, Share)
- For older kids or teens, consider using a kid-friendly debit card like Greenlight or GoHenry
Should Kids Earn Their Allowance?
This one’s personal! Some families tie allowance to chores. Others don’t.
Here’s a quick breakdown:
Option 1: Fixed Allowance
Kids get the same amount every week—no strings attached. Chores are expected as part of being in the family.
👍 Pros: Teaches budgeting, removes nagging over chores
👎 Cons: No incentive to do extra work
Option 2: Earned Allowance
Kids earn money by doing set tasks (like making beds or taking out trash).
👍 Pros: Mimics real-life earning
👎 Cons: Might lead to “What’s in it for me?” every time you ask for help
What I do: A mix
We have “must-do chores” (like dishes) and “bonus jobs” they can earn extra money for. That way, they learn both responsibility and reward.
5 Allowance Rules That Actually Work
1. Set a schedule and stick to it
Whether it’s Friday or Sunday, consistency is key. Kids need to know when to expect it.
2. Use the 3-jar method: Save, Spend, Share
It’s visual, simple, and effective. You can use jars, envelopes, or apps for older kids.
3. Don’t rescue them
If they blow it all on candy—let them. Mistakes now are the best learning tools.
4. Make sure the chores match their age
A 5-year-old can sort socks. A 12-year-old can mow the lawn.
5. Talk about money often
Use real-life examples. Grocery trips, bills, savings goals—they’re all teachable moments.
Final Thoughts
Allowance is more than handing out cash. It’s a chance to build smart money habits early and raise kids who understand the value of a dollar.
Start simple, keep it consistent, and let your kids take the lead. You’ll be amazed how quickly they learn.
More Posts You’ll Love:
- 21 Ways For Kids To Make Money
- How to Raise a Financially Responsible Child
- Saving for University – Expert Tips for Canadian Parents
