I think pocket money is a great method of educating your children in financing, but at what age should you start and under which condition?

10 Answers 10


I always tell my kids that I will do my best to take care of them, including using my money to that purpose. They don't need to worry about that.

We started giving an allowance to my oldest at age 7, and we increase it every year on his birthday. This money is really for him to learn with, not because he needs to buy things.

At first, he didn't know how to spend it. It piled up in his room for a while.

Then he started buying gourmet cake at $5 / slice. His money disappeared in a hurry. Now he is having a valuable lesson about the built-in scarcity of money.

I also tell him he has to share whatever he buys with the family that's with him. If I buy a sandwich for myself and my kids are hungry, of course I will share it, so I require the same of him.

I still place some restrictions on what he can buy, even though it's his own money. He may not buy a 6-pack of soda and drink the whole thing in a day, for example.

I am very careful to pay allowance without linking it to behavior. Regardless of whether he does his chores, or whether he behaves himself, he always gets his allowance. That's because I believe that paying for behavior is a really bad idea.

I've heard of an idea where a kid must put a portion of their allowance in savings, a portion goes to charity, and a portion they can spend. I haven't explored this; I'm just throwing it out there.

  • 6
    I too think that paying for behaviour is a bad idea, but dislike the idea that allowance is a right. If you don't show up for work, you don't get paid either?
    – Konerak
    Commented Jun 7, 2011 at 17:34
  • Your save/charity/spend comment reminded me of msgen.com/assembled/money_savvy_pig.html (I've had that link longer than I've had my daughter!) Commented May 3, 2013 at 15:37
  • I like this answer, and I also think that paying/bribing to get the wanted behaviour is bad. But I think, losing the ´privilege´ of allowance for the week as a punishment is ok, reminds me of time-outs en.wikipedia.org/wiki/Time-out_(parenting)
    – jsedano
    Commented Sep 18, 2013 at 17:35
  • Its been 9 years - how has this approach worked out for you. In hindsight what changes would you have made if any? I find myself in the same situation as the OP and am very interested to know how your approach (which is very close to what I want to do with my 5 year old)went. Commented Oct 1, 2020 at 10:18

We are starting by using poker chips with our 4 year old. We reward him for doing well at preschool or finishing some homework. To watch TV, he has to pay 1 chip/half hour. He can also cash them on on a toy at the rate of $2/chip. 5 white chips get traded in for a red chip so this helps with learning addition.

He is learning about currency, how it accumulates, and how it depletes quickly. At the same time, we can encourage things we want him to do and discouraging things we don't, all the while leaving it up to him.

Update: as a slight improvement on this, we use bedtime as a time to go over the day, talk about how he did, and decide how many chips he gets for that day. It also helps my wife and I to not forget about it!

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    This seems like a good idea. We gave our kid some pocket change to put and take out of a little plastic money container. That really helped him get fine motor controls (1,5 years old)
    – Barfieldmv
    Commented Mar 30, 2011 at 7:06
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    $2 a chip? Can he spend 5 chips to buy a basic pokergame that gets him 200 chips?
    – Konerak
    Commented Jun 7, 2011 at 17:32
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    We've thought of that loophole. Luckily he hasn't yet! Commented Jun 8, 2011 at 15:08
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    if he does, be proud of him - that's being industrious !
    – JasonGenX
    Commented Jun 8, 2011 at 15:33

Dave Ramsey suggests paying children for chores as young as preschool (3-4), but no later than 7 or 8 years.

It is also important to find age appropriate work for your children, as you will quickly run out of "room cleaning".

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    Dave Ramsey is awesome! We followed his advice a few years back, got out of debt and have an emergency fund. I lost my job a couple of years ago and was unemployed for over a year. But my daughter stayed in private school, we kept our house, and we stayed out of debt. The unemployment became a bump in the road, not a catastrophe.
    – tomjedrz
    Commented Oct 27, 2011 at 6:35
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    Other sources recommend against paying for chores because it gives a false sense of entitlement. I don't get paid to clean the house either! Chores are mandatory. Payment should be the reward for doing extra work. What's your take on this? Commented Apr 15, 2014 at 8:11
  • We never gave pocket money, we paid commissions.
    – pojo-guy
    Commented Jul 25, 2017 at 2:57

As soon as they can count, and understand the idea of trading one thing for another.

With my son, we started when he was about three and he got the idea very quickly.

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    Does he know trade you the location of your car keys for some more money? :-) Commented Mar 29, 2011 at 22:29
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    Nah, he's a good kid. That and he knows that move wouldn't end well for him. ;)
    – HedgeMage
    Commented Mar 29, 2011 at 22:49

Proper money handling is a very important lesson in life, and the earlier you teach your child about that the better. As long as the child is old enough to understand the concept of money and the importance of saving then go for it. I bought my 4 year old son a money jar that counts the money as you put it in and he enjoys putting the money in, even though he doesn't understand what money is for yet.


Give? Never. However, they can earn it as soon as they are able to do even the smallest of chores. My four year old earns money folding washrags and unloading the silverware.


a) As soon as he can count, add and subtract;
b) When he spends significant time outside home without parents.

In our case we started giving pocket money when our son went to the first grade.


I would agree with "as soon as they can count, add, subtract".

The one thing I would add: Include this money in savings, checking and credit lessons at an early age.

This is a checking account (less common these days, but still important).

Teach them young and early that a portion of money should be saved. Maybe put it towards car, college, etc. Learn early that a chunk of your money goes poof. Bye bye. Learn early how utterly important savings is.

Maybe even teach them credit shortly after they start getting money.

You want that truck? You have $5 and need 10... You can use this credit card (me) to "loan" you the $5 but you owe the bank $1 a week for the next 7 weeks. If you forget to pay me, there is a $1 late fee (You owe $2 next week) and another week owed $1 (more interest accrued).

Let them forget to pay and get late fee's (Deposited into savings, for future use). Let them learn not just to save... but how evil credit is and how important it is to stay on top of it.

This is how you make money, save money and lose money. I wish someone had done those things when I was younger. Would have saved me thousands in dumb choices.

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    You drive a tough bargain. I wouldn't want to bank with you at those rates ;-) but it's a useful idea once they're old enough to understand the principle and remember weeks back and think weeks ahead. Commented Apr 9, 2011 at 17:43

As an educational tool, Monopoly is an excellent way to teach basic math and money-management skills.

Personally, I started receiving an allowance when I was 7, though I had been given money before that as gifts for various things.

My parents also made sure 10% was set aside for church, 10% for the piggy bank, and then the rest was mine to spend.

  • and the downvote is for...?
    – warren
    Commented Apr 25, 2011 at 15:41

I believe as early as 5. But i feel you’ll know that they’re old enough the first time that they ask you for money to buy something. This is a certain indicator that they’re beginning to understand this concept. You’ll give them money, and they’ll spend it all on something that they want... This shows they need money to buy things.

It is important to give children a simple allowance to help them become comfortable with the notion of money...they will get money from relatives for their birthdays and other occasions and I think it is important to let them know what that means to have their own money...our children learn to swim and read at this age so why shouldn’t we be teaching them about understanding money as well...

As for conditions... The key in our family is tracking the money we give our kids. Without tracking, i’m just the bank of mom and dad throwing money to the wind. We tried using dry erase boards but that was too hard to manage. A free tool we’ve been using that works well for our family is called www.allowancemanager.com . It really helps us remember how much we’ve given to the kids - something I always seem to forget! Hope this helps! If anyone else has suggestions, I’d love to hear them.

  • The question is about when to give it. The OP already said it's a good idea.
    – smillig
    Commented Apr 4, 2013 at 8:12
  • Hello and welcome! This site is different than the forums you might be used to: responses to the top post are supposed to be answers and we try to avoid what we call "non-answers". Your post is good, it just misses the point. You can click the edit link and revise it. Read more here: How to answer. If you have a question of your own, see here: How to ask. Welcome! Commented Apr 4, 2013 at 14:47
  • Hey guys - thanks for the feedback and the welcome! I updated my response so you can see where I'm coming from.
    – Meg
    Commented Apr 4, 2013 at 21:52
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    @Meg Hi, and welcome to the site! I think your edits really helped... thanks for taking the time to update your answer!
    – user420
    Commented Apr 5, 2013 at 1:29

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