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How to Start Your Child on an Allowance

Have you ever had the “Do you give your child an allowance?” chat with other parents? If you have, you probably encounter at least one parent who sticks to one of of these philosophies:

  • They 100 percent believe in an allowance and pay up the same time every month.
  • They staunchly disapprove of it: “I give my kid everything he/she needs.”
  • They dole out money every once in a while but not that consistently.

We’ll walk you through a few different ways to handle an allowance for your child, a few different factors to think about and also, one final alternative you may want to consider: Investing in UNest (well, actually, you should do that anyway).

Types of Allowance Options

In terms of an allowance option, do you think you know what you want to do for your own child? Take a look at the following options: Chore-based allowance, repeated allowance and a hybrid approach.

Type 1: Chore-Based Allowance

As you might imagine, this type of allowance looks just like it sounds — you offer the allowance based on the number of chores your child does. If he or she ticks all the boxes for the expected chores, your child gets the allowance!

Type 2: Repeated Allowance

You also might want to designate a particular time of the month to offer an allowance. In this very straightforward approach, your child doesn’t have to do anything to receive the allowance; he or she receives the same amount of money at the same time every month.

Type 3: Hybrid Approach

You can also opt for a hybrid approach, which means that you offer the allowance at a specific time but if kids want to tap into more money, they can earn more with a chore-based approach.

This option gives them extra motivation to work harder to earn what they want. and you also implement a reward system. It’s kind of like in school or how organizations reward employees based on performance. For example, if your child does a great job of folding all the laundry without asking, a “bonus” might be in order.

Things to Consider

Before you choose the right type of reward for your child, take a look at the following considerations.

How Much Will You Plan to Give?

What’s an appropriate amount to give? As you might imagine, this depends on personal preference and affordability factors. You may want to offer your kids the same amount per week based on their age. For example, your 10-year-old would get $10 per week and your 11-year-old would get $11 per week. You might feel like another number makes more sense for your kids.


You may want to institute boundaries as to how they can use their cash.

What can they/can’t they buy with their money? Even though it’s “their” money, you still need to make sure your kids understand that they can’t spend the money on chocolate every week so that it’s flowing out of your pantry. An allowance offers you a great opportunity to teach your kids about how to use money wisely — not spending it all on chocolate is a great first lesson.


You want to stay as consistent as possible with whatever allowance policy you decide upon. For example, experts believe you should never withhold allowance as punishment for bad behavior or poor grades. After all, the point is to build trust, communication and cooperation. You don’t want to look like the “bad guy with lots of money” every week. Stick to your end of the agreement when it comes to the allowance and find another way to discipline your child when he or she needs it.


A three-year-old will not understand the pros and cons of saving money versus spending it, so wait until your child reaches age six or seven to get started with an allowance. However, sometimes six-year-olds aren’t responsible enough to understand how to use money, so don’t get started too soon!

Make the Experience Rewarding

Kids like money, and the experience should make them feel great. However, pay attention to how your child treats his or her money. Does he squirrel it away? Blow it on video games every chance he gets? Buy things for others? Not surprisingly, how he starts out early in life treating money can carry through as an adult.

Consider Encouraging Your Kids to Make Their Own Money

Sometimes, it’s best to let them earn their own money — and in many ways, that can teach a more valuable lesson than waiting for a handout every week. However, every kid is different!

In this day and age, your child can make money in so many different ways. Gone are the days when a 10-year-old had to wait till she could get a babysitting certificate till she turned 13. The digital world turns into so many opportunities for kids — as long as you play supervisor through all their adventures. For example, your child can:

  • Online surveys: Take online surveys, such as with Swagbucks and Opinion Outpost. These online surveys usually don’t pay very much but can offer a great way to make a little money with low effort.
  • Make illustrations: Create illustrations using Canva and sell them on platforms like Etsy. Similarly, your child may want to make crafts or jewelry and sell them on Etsy as well.
  • Create YouTube videos: Some kids can make a lot of money on YouTube, putting together helpful videos, such as his or her own cooking show for kids.
  • Start a blog: Does your child love to write? Why not try to monetize a blog? It’ll likely take a long time to make money with a blog, but for kids with stick-to-it-iveness, a blog could end up really lucrative later on.
  • Take photos: Does your child have a good eye for photography? Encourage him to develop his skills and sell the photos online.
  • Create a digital course: Create a course to sell digital goods — it doesn’t cost very much, and your child may really enjoy the videoing aspect of course creation.
  • Put those video game skills to good use: Most kids love video games, right? Why not encourage your kids to create their own?
  • Test apps for pay: Kids can test apps on UberTesters or other app sites. Since they already like apps, this option makes sense!

Is Your Family Allowance Ready?

If you still aren’t sure whether your child’s ready for an allowance or you’re still on the fence about whether you’re all in, channel that money into UNest until you decide. Use our simple college savings calculator, establish your future goal and choose a monthly amount that’s right for you. Start with as little as $25 per month.

You can even team up with your child to commit to a portion of his or her allowance to UNest. You might even agree to match that amount and in exchange, bump up the allowance per month. That way, it gets your child in the habit of saving a lot and spending less. Ultimately, it’s about teaching responsibility with money, and this could offer a great way to start!


This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.