savings

How Much Allowance Should My Kid Get?

A weekly allowance can be an important tool to help teach your son or daughter about how to manage money.

The average weekly allowance is now $30, according to a recent survey by the American Institute of Certified Public Accountants. If they saved it, kids would have enough cash to buy a used car within a few years. But kids aren’t banking most of their allowance. They’re spending most of it on outings with friends, digital devices and downloads, and toys, AICPA says.

Whether your child’s allowance is above or below the average, the lessons delivered with the money are more important than the amount. If you require your kids to perform chores to collect an allowance, they will understand that they must put forth an effort to earn a paycheck, says David Almonte, a member of the AICPA Financial Literacy Commission. If you increase your child’s allowance each year, you can use it as an opportunity to talk about inflation. Even if you can’t afford an allowance, take advantage of everyday activities, such as buying groceries, to impart financial lessons.

Rather than set hard parameters on the amounts that your kids should spend and save, let them come up with a budget with some guidance from you. If they blow their allowance and fail to save enough for bigger items that they want, they may figure out how to delay gratification while the stakes are low. “Let them make some mistakes while they’re young and can learn from them,” says Roger Young, senior financial planner for T. Rowe Price.

Most Popular

Dying Careers You May Want to Steer Clear Of
careers

Dying Careers You May Want to Steer Clear Of

It’s tough to change, but your job could depend on it. Be flexible in your career goals – and talk with your kids about their own aspirations, because…
September 13, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021
5 Top Dividend Aristocrats to Beef Up Your Portfolio
dividend stocks

5 Top Dividend Aristocrats to Beef Up Your Portfolio

The 65-member Dividend Aristocrats are among the market's best sources of reliable, predictable income. But these five stand out as truly elite.
September 14, 2021

Recommended

How to Calculate Your Net Worth
savings

How to Calculate Your Net Worth

Run an inventory of your assets and liabilities to find out how much you're worth.
September 20, 2021
Yes, Your 401(k) Has Its Perks, But It’s Not the Only Way to Save
how to save money

Yes, Your 401(k) Has Its Perks, But It’s Not the Only Way to Save

Tax diversification can play a vital role in stretching your retirement savings. Here’s how to achieve the flexibility you need with a three-bucket sy…
September 20, 2021
15 Things Retirees Should Buy at Costco
Making Your Money Last

15 Things Retirees Should Buy at Costco

From its house brand Kirkland Signature lineup to name brands and hidden gems, the warehouse club offers bargains aimed at mature shoppers.
September 8, 2021
17 Free or Cheap Things to Do With Your Kids During the COVID-19 Pandemic
Raising Money-Smart Kids

17 Free or Cheap Things to Do With Your Kids During the COVID-19 Pandemic

We’ve got lots of kid-friendly activities to do at home that will keep your family safe and your finances sound.
September 8, 2021