When Should You Start Giving Your Child an Allowance?
Is your child ready for an allowance? Learn the signs of financial readiness and how to introduce money management at the right age.
There's no magic age for starting an allowance, but there are clear signs that your child is ready to begin learning about money management.
Why This Matters to Us as Parents
As parents, we want to start financial education early enough to build good habits, but not so early that it's confusing or meaningless. Finding that sweet spot where our kids can actually grasp money concepts and make real decisions—even small ones—sets the foundation for a lifetime of financial confidence.
Signs Your Child Is Ready
- They can count: Basic number recognition and counting to 20+
- They ask for things: They're expressing wants and making requests
- They understand waiting: They can delay gratification for short periods
- They're curious about money: Asking questions about prices and purchases
- They can follow simple rules: Understanding and following household expectations
Typical Age Ranges
Ages 4-5: Pre-Allowance
Introduce money concepts through play. Use toy money, play store, and simple counting games. No formal allowance yet, but occasional coins for completed tasks.
Ages 6-7: Allowance Beginners
This is when most experts recommend starting a regular allowance. Children this age can:
- Understand that money buys things
- Make simple choices between options
- Save for short-term goals (1-2 weeks)
- Count and handle coins and bills
Real-World Example
Jayden turned 6 in September, and his parents decided to start a weekly allowance of $5. The first week, he spent all $5 on candy at the corner store. By Wednesday, he saw a toy car he wanted for $8 and was devastated he'd already spent his money. His parents didn't rescue him—they helped him understand he'd need to wait until next week and save for two weeks to afford the car. The following Saturday, when he got his $5, he immediately put $4 in his "car fund" and only spent $1 on a small treat. Two weeks later, he proudly bought that car with his own saved money. That early mistake taught him more about money than any lecture ever could.
Ages 8-10: Building Skills
If you haven't started yet, this is still a great time. Kids this age can handle more complex concepts like:
- Percentage-based saving
- Longer-term goals (1-3 months)
- Comparing prices and value
- Understanding wants vs. needs
Starting Too Early: What to Watch For
You might want to wait if your child:
- Can't count reliably yet
- Loses or destroys everything they touch
- Has no concept of time or waiting
- Shows no interest in money or purchases
There's no harm in waiting another 6-12 months if they're not quite ready.
How to Introduce Allowance
Step 1: Have a Family Meeting
Explain what allowance is, how much they'll receive, and when they'll get it. Keep it simple and positive.
Step 2: Start Small
Begin with a modest amount—$1-2 per year of age per week is a common guideline. You can always increase it later.
Step 3: Establish Clear Rules
- When allowance is paid (same day/time each week)
- What it should cover (treats, small toys, etc.)
- Any saving requirements (optional but recommended)
- Whether it's tied to chores or not
Step 4: Provide Guidance, Not Control
Let them make small mistakes. If they blow their entire allowance on candy the first week, that's a valuable lesson learned cheaply.
The Chores Question
Should allowance be tied to chores? Families successfully use both approaches:
Allowance NOT tied to chores:
- Teaches that family members contribute without payment
- Allowance is for learning money management
- Chores are separate family responsibilities
Allowance tied to chores:
- Teaches that work earns money
- Provides natural consequences for not completing tasks
- Mirrors real-world work relationships
Many families use a hybrid: base allowance for being part of the family, plus opportunities to earn extra for additional tasks.
What If You Start Late?
Don't worry if your child is 10 or 12 and you haven't started allowance yet. It's never too late! Older children can actually learn faster and handle more complex concepts right away.
Just adjust the amount and expectations to match their age and maturity level.
The Bottom Line
The best time to start allowance is when:
- Your child shows readiness signs
- You're prepared to be consistent
- You have time to guide and teach
- It fits your family's financial situation
For most families, that sweet spot is around ages 6-7, but trust your instincts about your own child's readiness.
About This Article
This article was written by parents building Kiddos Cash to help families teach real-world money habits through allowances, rewards, and savings goals. Our goal is to make money conversations with kids simple, positive, and practical.