EXPERT Q&A

How young is too young to get an allowance?

Learning about money is an important skillset for young children. Read more for approaches to giving your child an allowance and helping them to understand saving and spending money.

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Question

We are considering an allowance for our 3-year-old. He is very interested in money and already has his own little wallet and piggy bank. When we go to the store or a restaurant, he loves to give the cashier money and get the change back. We are wondering if 3 is too young for a weekly allowance and if he will even understand the concept. And if we do start giving him an allowance, should it be tied to chores?

Answer

What a great question! If you are going to give a child an allowance, it’s best to wait until they seem to understand the concept. It sounds like your 3-year-old is headed in that direction pretty quickly! I love that he likes to pay at the store and keep his change safe in a wallet and piggy bank. I also think it’s great that he enjoys helping around the house. Be sure to provide specific praise for helping behavior (i.e. Thank you for feeding the dog! She likes getting her food from you and I like when you are a good helper).

I would suggest using allowance as a financial teaching tool instead of a reward or punishment system. This doesn’t mean children shouldn’t have chores or strive to get good grades, but more so that the chores should be done because the child is a part of the family, and they should do their best in school because trying their best is important in everything they do. Once your son is older, you can always offer a monetary incentive to do chores beyond what is expected weekly as a way to make some extra money.

When trying to decide on a weekly amount, some experts recommend $0.50 per year of age. So, a 4-year-old would get $2.00 each week and a 10-year-old would get $5.00 a week. When it comes to spending the allowance, let your child make the decisions. This will teach them important lessons about managing money and delaying gratification. Once your son is old enough to understand savings, you can explain it like this: “I know that you want to buy a bouncy ball today. It costs $2.00 and that’s all you have right now. If you want to wait until next week, you will have $4.00 saved. With that, you can buy the Lego set you’ve been wanting. Which would you rather do?” Then, support whatever choice they make! If they want the bouncy ball, great! If they want to save for the Lego set, great! Either way, they are learning.

Finally, find ways to teach about money during the week. It sounds like you are doing this already by allowing your son to pay for purchases and get change from the cashier, which is so awesome! You can also talk about the types of coins and their values, how much certain items cost, and the concept of donating money to worthy causes. Keep up the great work!

Meet The Expert


Shenley Seabrook

Shenley Seabrook is a Licensed Mental Health Counselor who works primarily with children and adolescents in a private practice setting. She is also a foster parent and lives with her husband and daughter in Indiana. Shenley recently wrote her first children’s book, We Have the Same Heart, which celebrates diversity, inclusion, and community service.