Kids and Money – the Allowance Debate - By Merrilee Boyack

POSTED BY on March 17, 2015


Allowance or no allowance, that is the question!  Parents have been debating how to teach their children about handling money for centuries.  

One thing is clear.  Kids who are not taught about money are doomed to many years of learning by making mistakes – and they can be quite costly.  But how should we teach them?  And should we give them an allowance or have them earn all of their money?  And who should teach them about all of this money stuff?


            As we raised our children, we felt that it was critically important to teach them to handle their money so they could be independent.  We saw scores of young adults who were clueless and still leeching off of their parents and we certainly didn’t want that to happen!


            We began when the kids were little.  We had to decide whether or not to give an allowance.  As we thought about it, one thing became abundantly clear.  If we made our kids earn all their money by doing chores, there would come a day when they told us to just keep our chores and they could earn more money elsewhere.  That was not an outcome we wanted.  So we decided that giving an allowance together with offering money chores was a good blend.


            Allowance began at age 5.  Our goal was to give our kids some money so they would learn how to manage it but not enough that they didn’t feel the need to work a bit to supplement that income.  We gave $1 per year of age per month – so a five-year old got $5 per month.  Today, I would recommend about $1.50 per year – which means a five year old would get $7.50 per MONTH.  We paid it on the first Saturday of the month.


            It’s great to teach your child to save – 15% of the income per month should be saved—for the rest of their life!  Tell them doing that will make them rich!  It’s also great to teach your children to donate – 10% of income per month should be donated—tithing to your church or donations to a community cause. The rest is theirs – to do with as they please!  And please – let them control it!


            You want your child to make mistakes with money.  You want them to learn that buying junk is a waste of money.  You want them to learn that they need to make that money last the whole month.  You want them to buy junk food, eat it, and realize they have nothing to show for their money.  All kinds of wonderful learning opportunities can be had by letting them control their own money.


            It’s also great to encourage them to work and earn money.  From the age of 5, we had money chores available for the kids.  (All those nasty chores that we didn’t want to do!)  Any time they asked for money, we pointed to the list and said, “You bet!  Pick a chore and we’ll pay you!”


            Great resources for helping teach your kids about money can be found at  They have just launched a new series called “Smart Money Smart Kids”.  It will help you know what to do to educate your kids well.


            Teaching our children about finances will make a huge difference in their future, in their marriage, and in their lives.  It’s worth the effort!


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