How to start an allowance

Start with the purpose

Before you pick a number, decide what the money is meant to do. A parent might want one of three things: practice choosing, practice saving, or a way to cover a few of a child's own costs. Write your answer on a sticky note. It will settle many later arguments.

A 2025 survey by Wells Fargo and Ipsos found that 71% of U.S. parents or guardians of kids aged 5 to 17 give an allowance: 43% regularly and 28% occasionally. So you are in large company, and there is no single correct way to do it.

Six steps to a first allowance

1. Pick the purpose: practice, saving, or covering costs.
2. Choose a starting amount.
3. Choose a fixed day and a rhythm, weekly for younger kids.
4. Agree what the money covers and what stays with you.
5. Say out loud what happens when the money runs out.
6. Review after four weeks and adjust.

Choosing the amount

A common rule of thumb, described by both Acorns and Wealthsimple, is 50 cents to $1 per week for each year of your child's age. For a 9-year-old that is $4.50 to $9.00 a week. For a 12-year-old it is $6.00 to $12.00. Treat it as a starting point and not as a target.

Your own budget matters more than any rule. If the low end of the range is already a stretch, start smaller. A small, steady amount teaches more than a big one that you cannot keep paying.

For a different angle, Nibud, the Dutch budgeting institute, publishes what Dutch kids typically get. At 6 that is €1.20 to €2.30 a week. Nibud says these figures describe what kids get and are not advice. It names about age 6 as a starting point, since kids can recognize the different coins by then. Our age-by-age calculator shows both ranges side by side.

Pick the day and the rhythm

Weekly is easier for younger kids to follow. Nibud's figures switch to monthly amounts at age 12. Whatever you choose, pay on the same day and pay on time. Predictability is the biggest part of the lesson.

Agree what the money covers

Kids are more willing to accept limits they helped set. Sit down together and make a short list: treats and small toys, a share of outings, a gift for a friend. Leave big items and basics on your side. The guide on what allowance should cover goes through the options.

Settle the awkward questions early

• What happens if they spend it all on day one? One simple answer is that they wait until the next payday.
• Can they borrow against next week? Decide once and stay consistent.
• Will you ever hold back allowance as a punishment? Some parents keep the two separate so the amount stays predictable.
• Do chores earn extra? Read how families tie allowance to chores before you commit.

Cash or a pretend balance?

Coins and notes are easiest for the youngest children, who need to hold money to understand it. A tracked balance, on paper or in an app, suits older kids who think in numbers and may shop online. Some families do both, with cash for small buys and a record for bigger goals.

Review after a month

After four paydays, ask your child two questions: what did you buy, and would you do anything differently? Then ask yourself whether the amount felt right. Adjust once, and then leave it alone for a few months.

Setting this up in Pouch

Pouch is a free web app that keeps a pretend balance on your device, with no account and no real money. Add your child, set the weekly allowance and the payday, and add chores if you want to pay for some of them. If a payday is missed, the allowance is added the next time you open the app. You can also set one savings goal per kid and print a weekly chart.