Should kids get an allowance? Here's what parents are doing:

April 15, 2024

By Alisha Lourens • Branch Supervisor

The financial world is constantly changing. As parents, it's more important than ever for us to make sure our kids are prepared. A recent survey by T. Rowe Price looked at how parents are teaching their kids about money, including how much allowance the average parent is giving out.

How much allowance are parents really giving?

The survey revealed that nearly 8 out of 10 parents give their kids an allowance in the U.S. Not only that, more than three quarters of those "allowance givers" make their kids do chores to earn it.

In addition to showing parents' preference to use allowance as a teaching tool to reward work, the survey also showed that talking about money is important to parents. More than 70 percent said they chat with their kids about money topics like saving, spending wisely, investing (like growing your money), and even credit cards.

The big question: how much allowance is right? The survey showed that the average allowance for kids in the U.S. is $19.39 per week. We put the total results in the chart below, to illustrate how much parents in the United States typically give their kids on a weekly basis.

Average Weekly Allowance for U.S. Kids

We hope that understanding the current allowance trend can help you make informed decisions about how to approach financial education in your own household.

Tips for how (and when) to start allowance:

Figuring out allowance can be tricky, and unique to each family! Of course, only you can decide when to start an allowance, what the right amount is for your child's age, and what they can buy with it. That being said, here are some helpful ways you can use allowance to raise money savvy kids!

1. Start early: Children can grasp basic money concepts as early as age 6-7. That doesn't necessarily mean you have to start allowance that early, either. It could be as simple as exposing your child to the value of money through simple activities like grocery shopping and explaining costs. You can also teach them about money with our recommended list of children's books that teach financial literacy.

2. Make allowance age appropriate: Try tying the amount you give to your child's age initially, and gradually increase that amount as they get older and take on more responsibilities.

3. Teach budgeting: An allowancegreat tool for teaching how to budget. Clearly define what the allowance covers (e.g., small purchases or snacks), and encourage them to save a portion (10 percent is a good starting point).

4. Incentivize saving: You can help your kids reach larger goals by matching the amount they choose to save, rather than spend - a homemade "401(k)" for kids, of sorts! This reinforces the value of saving and delayed gratification. (Pro tip: If you want to open a savings account to facilitate your "match," remember that SNB offers a $10 voucherwhen you open a new Kids Saving Account.)

5. Remember the power of earning: Like the majority of parents already do (see above), you could base your child's allowance on the chores they do. This way, the money earned feels more valuable and teaches them the connection between effort and reward.

6. Tough love builds resilience: Letting kids experience the consequences of poor spending is a powerful lesson in accountability and the importance of budgeting. If your child overspends their allowance, we suggest resisting the urge to bail them out, at least at first.

By introducing financial concepts early, and emphasizing saving and goal setting, you can lay the groundwork for your child's future financial success.

Was this article helpful?

Sign up for our monthly newsletter and get great savings tips like this each month, handcrafted and delivered to your inbox.

Public link

Please use the above public link if you want to share this noodl on another website.