Allowance Advice That Actually Works

Learning how to save and manage money usually begins with an allowance.

Our friends at The Money Mammals® Kids Club™ know a thing or two about age-appropriate money-smart habits that actually work. When it comes to starting an allowance for your child, they recommend labelling three clear jars as Save, Share and Spend Smart.

 Explain the purpose of each jar to your kid, then give them the power to choose how to divvy up their dollars. Pretty straightforward, right?

 Let’s dive into why this works.

ALLOWANCE JAR 1: SAVE

The Save jar will be used for—you guessed it—saving up for big purchases. The key to success with this jar is introducing the SMART Goals framework.

You might be wondering, uh, what is that? It’s a helpful acronym to make sure you’re setting your child up for success when it comes to their savings goals. Goals should be…

• Specific
• Measurable
• Attainable
• Relevant
• Time-Based

You can learn more about SMART Goals here.

ALLOWANCE JAR 2: SHARE

What matters most to your kiddo? UNcovering a cause they care about is crucial to helping them understand and prioritize giving back. Maybe it’s donating to a local animal shelter or contributing to the offering plate at church. Maybe they’re passionate about school fundraisers. Let them experience the feel-goods of giving back at a level that makes sense for their age and allowance amount.

Pro-tip: The rule of thumb is one dollar per your kiddo’s age every week. Got a five-year old? Their allowance is five bucks. A ten-year-old? Ten bucks. You get the idea. Whether or not this allowance is tied to chores, schoolwork or something else is your call.

ALLOWANCE JAR 3: SPEND SMART

The final jar is what’s left for small purchases—aka fun money. This will no doubt be your kid’s favorite jar because they can spend these funds any way they’d like. However, because it’s only a portion of their allowance, they’ll still need to think before buying anything because they know pulling from the other jars will affect their other goals. Boom, smart spending UNlocked.

Remember, allowances require a progress over perfection mindset. Your kid isn’t going to be making money moves like an investment banker. Managing a budget can be difficult for even the most responsible adults, so the fact that your family is making the extra effort to teach your kids about money is a HUGE win.

We’re proud to offer additional guidance and resources for families raising money-smart kids through our youth savings program.

• The Money Mammals ® Kids Club™ is designed for parents and kids 12 and under
• ADOLESCENT$ helps parents connect with tweens and teens