Allowance Calculator for Kids

Getting an Allowance

Father and daughter throwing coin into piggy bank
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Giving your kids an allowance is usually considered to be a good idea.

After all, it is never too soon to learn about financial responsibility, and other important concepts, including:

  • Delayed gratification - saving for things they really want
  • Charity and helping others
  • Budgeting

It is easy to make mistakes and teach the wrong lessons when you give your kids an allowance, though. Will you quickly bail your kids out if they overspend?

Allowance vs the Consumer Price Index (CPI)

Mother handing girl one dollar bill
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As parents try to figure out their child's allowance, some simply give what the same amount that they got as a child.

Is that a good idea?

Probably not.

Consider that when I got 50 cents, way back when, I could go to the corner store and get a few pieces of candy, some baseball cards, and a Spaldeen (a Spalding Hi-Bounce Ball that was commonly used to play schoolyard and street games) and be set.

To be realistic, you can use the CPI or Consumer Price Index to take into account the way that prices have changed over the years.

How Much Allowance?

10 year old holding jar full of pocket money
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So how much allowance should your child get?

It really depends on what you expect your child to spend it on.

In general, if it is simply extra money, then the allowance would usually not be very much at all. But if you expect your child to pay for many of his own day to day expenses, then it should be higher.

Some general allowance rules that some parents follow including giving kids:

  • One dollar per year of age every week or every other week, or if that is too much, give a monthly allowance, or one-quarter per year every week, etc. The idea is to have a formula that will slowly increase as your child gets older.
  • What they are now spending on the things you expect them to use their allowance on.
  • What their friends at school and in the neighborhood are getting.

How much of an allowance does your child get?

Allowance Mistakes

A child bringing in the recycling can - a common chore for kids.
Avoid common mistakes when giving your kids an allowance, like tying an allowance to doing chores. Photo by Getty Images

When giving your child an allowance, it is important to not make these common mistakes, including that you:

  • Don't associate your child's allowance with specific chores, because he can then simply stop doing his chores and say he doesn't want the money anymore.
  • Don't withhold your child's allowance as a punishment.
  • Don't continue to give your child money for extra things, in addition to giving him an allowance. While that's fine if it is what you want to do, you aren't teaching your child anything about financial responsibility, which is one of the main reasons to give them an allowance.

It is also important that you give your child his allowance each and every week, whether or not he remembers to ask for it. And encourage your child to set aside a certain amount each week for short term and long term savings. Many parents also encourage their kids to set aside part of their child's allowance for charity.

How do you handle your child's allowance?

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