It is advised that while your kids are still younger you should put them through some practices that will help them grow good habits.
While there are so many reasons why you should give your kids allowances, it can be confusing as to what age to start. What age to stop giving allowances? How much allowance should you give your kids?
Giving kids allowances can be the best way to teach them financial skills, and you can start as earlier as when they are four years old. The best method for deciding how much to give your kids is based on the $1 for 1year, e.g., $12 for 12 years old weekly.
What is a Good Allowance by Age?
On average, parents start giving their children allowance at age of 5. Most parents start giving around $3 to $5 per week to 5-6 year olds, $6-$8 to 7-9 year olds, $10 to 10-11 year olds, and $15 to 13-17 year olds.
|Child’s Age||Average Allowance Per Week||Average Allowance Range Per Week|
|5 – 6 Years Old||$3 – $5||$3 – $6|
|7 – 9 Years Old||$6 – $8||$6 – $9|
|10 – 11 Years Old||$10||$10 – $11|
|13 – 17 Years Old||$15||$13 – $17|
Teaching your kids that allowances are earned through doing chores is not the best practice. The best time to stop giving allowances is when your kid gets and sustains a job.
Giving allowance to your kids teaches them a lot about responsibility and finances. It also teaches them the consequences of their actions and poor financial decisions.
According to research, the average of allowances across most families is around $10 weekly.
However, whether the allowance you give your kids is above or below the average, the lessons they learn from managing their own money are more important than the amount.
They include the responsibility and tasks you think or know that your kids will be engaging with, will they manage a side hustle?
The allowance amount you give to your kids is entirely up to you, but whatever amount of allowance, make sure that you take the opportunity to give your kids financial lessons along the way so they can benefit from good habits for the rest of their lives.
Average Allowance by Age Group
A key rule in setting kids’ allowance by their age is to understand that the different ages come with different responsibilities.
And those responsibilities affect the Allowances they need. For Allowances by ages, you should match the year the years with $1. A 4 year gets $4, 6 years old $6, etc., weekly.
However, go the different age groups, you could use the following to efficiently to their allowances and get the best out of the process.
Allowance for 5 and 6 year old
It is usually at this time that your kids start to get some sense of the money of money even though some kids might earlier. You can start by giving them $3 to $5 per week.
At this age period, it is highly recommended you start giving allowances. As the age tend to differ among kids, you don’t have to force giving allowance and money management upon your kid.
While this entirely depends on your income and your child’s responsibility to try out, the age group Allowances should be between $3 – $5 per week. You should not expect any savings from your kid at this age. They are yet to start to learn the basics of savings and money management.
Allowance for 7 to 9 year old
At this age, it is recommended that you start teaching your kids financial skills. You can also give them extra cash for extra tasks they do to educate them on the idea of getting a job such as a summer job.
While it is good to give them Allowances, experts suggest that you do not tie bad behavior, chores, and punishment with allowances, making it a disciplinary tool and not a means for financial education.
The recommended allowance for children between the ages of 7-9 is between $6- $8 per week. Your kids have gotten to have a sense of money and would like to purchase their things.
They should also be able to solve their immediate needs without your help.
Your child should have gotten good knowledge of some basic financial education, including having some savings. After about six months of allowance, your kid should at least save about $50 -$100 on savings.
Allowance for 10 and 11 year old
It is recommended that you start educating your kid with various aspects of financial education and make sure that they gain good financial skills.
The recommended allowance for them at this age should be between $9 -$11 per week. At this age, they should start to be good at managing and practice some of the financial skills you teach them along the way.
Your kid within this age group should at least have a saving of up to $200 or more.
Make sure to imbibe the concepts of budgeting, savings, among others. You can also let go of one or two non-essential needs and give the responsibility over to them.
This is to let your kid have some responsibility to deal with. Such things might include comic books, snacks, iTunes downloads, etc. You should know that child’s responsibility for any discretionary spending is growing just as he or she is.
While it is okay to allow your kid to make their own choices, you should know that giving your kid more money when she lavishes her allowances betrays the idea of her learning to manage money.
Allowance for 13 to 17 year old
By this time, your kid should be used to the basics of finances, and it is recommended that you give them an allowance between $13 and up based on the 1y ear, $1 formula.
This age group is well mature and is getting into adolescence.
Your kid is up for a little bit of real-world financing; it is recommended that you open a prepaid debit card that your kid can manage online. Multiple financial services allow you to open an account with your child’s name.
You can send the weekly allowance to your kid’s card. Your child can get up to date information on their savings, purchase online, and even withdraw cash from the ATM.
The savings amount of each kid at this age varies. Your kid could spend a summer and have $1000 in saving while another kid could fund a side hustle with their allowance and have $2000 in their savings.
When to Start Giving Allowances
While some people start giving their kids allowances at a predetermined age, it’s not ideal as some kids mature in reasoning faster than other kids. Therefore, the best time to start giving your kid allowance is as soon as they start having a sense of the value of money.
Hence, some 4 year olds will be ready to learn how to manage money while older 7 year olds will find it hard to grasp the concept of money and manage it.
Generally, most kids start to get the idea of the value of money at 4-5 years, and by elementary school, almost all kids should be ready to be given allowances.
To tell whether your kids are getting a sense of money, try to know when they begin to understand that money is necessary to buy things they want. Even though at this time, the child might not have a complete idea of the different values of paper currencies, it is good to start at this time.
When to Stop Giving Allowances
Even though many parents keep giving their kids allowances year upon year, it is not ideal. That said, there is no laid down rule, age, or time to stop giving allowances to your kid.
It is entirely up to you to decide, but there is some certain time when it is best to do so.
On average, most parents stop giving their children after they turn 18, and the best time is around when they graduate from high school. This will push them to join the workforce and find a job to explore their finances with the experience and lessons learned from managing allowance over the years.
Most 18+-year-old teenagers have experienced some type of part-time job. At this time, your kid is considered an adult, and it is ideal that they join the workforce and become financially independent and not rely on your income.
Another group of people thinks the best time to stop giving your kids allowances is when they graduate from college. It is believed that kids should take their time in college seriously and study effortlessly.
After college, they get a good job; earning and practicing the financial lessons learned during school and the allowance period.
The best time that a larger percentage of parents have chosen over the years, and the overall best time to stop giving their kids Allowances is when they get a job.
When your kids take on the job for some time; they know that it is time for you to stop the Allowances. If you are not comfortable with stopping the Allowances, know that you are doing it for the best of your kid.
Continuously giving allowance to your child who is 18+ is an act of “enabling” them. This is very damaging to your child and will hinder them from success and achievements in the future.
For them to grow to be able to manage themselves, their finances and build a greater financial responsibility, they need to be independent.
Benjamin is a certified financial advisor, with over 10 years of experience in the industry. He is knowledgeable about various business and financial topics, such as retirement planning and investment management. Ben has been recognized for his work in the financial planning industry. He has also been featured in various publications.