Cash, a tracker or a debit card?

Three common setups

Most families end up with one of these, or a blend. Each answers a different question about how money should feel to a child.

Cash: the most visible option

Nibud, the Dutch national budget institute, names about age 6 as a starting point for pocket money because kids can recognize different coins by then. Cash makes that visible: a child can see the pile shrink.

• It is easy to understand at any age.
• It needs no phone or login.
• You must have the right coins on payday.
• A jar can hold a few weeks of savings, which is satisfying to look at.

The downside is practical. Fewer people carry cash, and loose coins disappear. Teens often want to spend online, where cash does not help.

A tracker of pretend balances

A tracker keeps a number: this much earned, this much spent, this much saved. No money changes hands until you decide it does. Pouch works this way, as do many spreadsheets and paper ledgers.

Because no real money is inside it, you can pay however you wish: cash on Saturday, a bank transfer, or a trip to the shop together. The tracker's job is to make the balance visible and the history easy to check.

• It scales to several kids without several piles of coins.
• You can see what was earned and when.
• It suits kids who are learning to save toward a goal.
• You still need to pay out. If you forget, the balance is just a number.

Trackers differ in what they do. Pouch, for instance, keeps data on one device with no account, and it does not send reminders. If you share duties with another parent, ask whether the tool you choose works on more than one phone.

A kids' debit card

Cards linked to real accounts let kids spend in shops and online, and parents can often set limits and watch purchases. They suit older kids and teens who have outgrown pocket cash.

• The child learns to use a card, with limits you control.
• Money is held by a financial company, so check how it is regulated and what fees apply.
• Many charge a monthly or yearly fee. Prices differ and change, so look at the provider's own page.
• Tapping a card feels different from handing over notes.

Our page on Greenlight alternatives without a card looks at this choice in more detail.

How to choose

1. Start with your child's age and how comfortable they are with numbers.
2. Decide how much of the work you want to do each payday.
3. Think about where your child will spend: shops, online, or only at home.
4. Check the full cost, including fees, before signing up for anything that holds real money.
5. Review in six months. Many families change setups as kids grow.

For the basic rules of running any allowance, see how to start an allowance.