Back-to-school season always seems to come with kids asking for money — whether it’s for snacks at the game, Roblox gift cards, or trips to the movies. 💸 But handing over cash (or a debit card) can feel tricky: Are we teaching them good habits… or just giving in?
This article is sponsored by Coastal Credit Union.
It turns out that allowance is one of the best tools we have to raise money-smart kids. Coastal Credit Union recently shared some modern rules of allowance, and they’re so good we had to pass them on.
💡 Want all the expert tips, plus age-by-age allowance guides?
👉 Read:
Allowances 101: Should You Give Your Child An Allowance?
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Why Giving Kids an Allowance Helps Teach Money Skills
Talking to kids about money is becoming more common — in fact, a national survey found that about half of families are now having financial conversations at home. Experts say that’s a big step in the right direction, but talking isn’t enough. Kids also need hands-on experience to really learn how to make smart money choices.
That’s where an allowance comes in. By giving kids their own money to manage, you give them the chance to practice making decisions, live with the consequences, and start building financial confidence that lasts a lifetime.
Modern Allowance Rules for Kids: What Parents Should Know
Coastal Credit Union’s blog breaks down some of the most effective ways to handle allowance. Here are a few highlights to get you thinking (the full list is worth a read!):
- 🚫 Chores and allowance don’t always mix. Experts suggest separating household responsibilities from money lessons. Chores teach teamwork and responsibility; allowance teaches financial skills. Mixing the two can muddy the waters.
- 🏦 Try the three-jar method. Kids divide their allowance into “save,” “spend,” and “share” jars. It’s a simple system that helps even the youngest kids understand balance — setting aside money for the future, enjoying some now, and giving a little to others.
- 📅 Smart starts for every age. Yes, even preschoolers can learn with small amounts! As kids grow, allowance can shift from pocket money to covering bigger responsibilities like part of a phone bill, gas money, or outings with friends.
These are just a few of the tips that stood out to us — Coastal Credit Union has even more in their full article.
How Allowance Grows With Your Child
One of the biggest questions parents ask is: How much should I give, and when?
The answer is — it depends. What matters most is using allowance as a tool that grows with your child.
- For younger kids: Small weekly amounts let them make simple choices, like whether to buy a small toy or save for something bigger.
- For middle schoolers: Increasing allowance (and responsibility) can help them start budgeting for things like outings with friends.
- For teens: A “break-through allowance” shifts certain expenses to your child, such as part of their phone bill or clothing budget. This prepares them for managing real-world finances before they leave home.
Handled this way, allowance isn’t just pocket money — it’s training wheels for adulthood.
Read more: Allowances 101: Should You Give Your Child An Allowance?
Benefits of Allowance for Kids and Families
Allowance isn’t about handing out money for free. It’s about teaching kids to:
- Plan for bigger purchases
- Learn the difference between needs vs. wants
- Practice saving regularly
- Make their own decisions (and sometimes mistakes!)
And when kids are ready for more responsibility, parents can shift certain expenses to them. It’s a win-win: they learn valuable skills, and you take a little off your plate.
At the end of the day, allowance isn’t about handing out cash — it’s about raising confident, money-savvy kids.
