SURVEY SAYS: Allowances and Teaching Money Management

PLANSPONSOR NewsDash readers share their experience with receiving an allowance and money management education as a child.

Last week, I asked NewsDash readers, “Did you get an allowance as a child, and in coordination with that, did your parents teach you how to manage your money?” I also asked, “Did you regularly save any of your allowance?”

More than six in 10 responding readers (60.9%) received an allowance as a child, while 39.1% did not. Yet, more than half (52.3%) said their parents did not teach them about how to manage their allowance.

Still, nearly six in 10, (59.1%) said they regularly saved some or all of their allowance.

In comments about allowances and teaching children about money management, readers explained the money management lessons or advice their parents gave them. Several noted that they learned money management skills when they got their first jobs as a teenager—as was my experience. I was surprised to find that many responding readers were taught—and taught their children—like me, that household chores were part of maintaining a family household and the reward was having basic necessities met. Editors’ Choice goes to the reader who said: “The mint makes it first. It’s up to you to make it last.” Clever.

Thank you to all who participated in our survey!


I would save for a specific purchase, then spend it all on that item or that trip to Disneyland.

Sadly my parents never broached the subject. Rather surprising since they were young during the Depression and very frugal and financially risk averse. I suspect they thought we’d learn by example rather than instruction.

Allowances are not necessary, but the correct point of view is. I never received an allowance but from my modest early jobs I always saved most of my take-home pay, resulting in early and sustained wealth that most would find envious.

Growing up on a farm, we were not given an allowance. We did have lots of chores and jobs to do though. According to my Dad, our “allowance” was having a home to eat and sleep in and clothes to wear no matter what the season.

I only got my allowance when I completed my chores. They opened up a savings account for me when I was 4 years old and I had bank deposit booklet to keep track of my savings. I loved going to the bank to make a deposit because they gave out suckers.

My allowance wasn’t much more than pocket change and finances weren’t talked about. My kids have no allowance and we talk about finances a lot with our kids. Chores are a part of living together, not something for an allowance. If they want extra money they can do extra work (usually at their grandparents’ house or the stuff we’d pay someone else to do, like mow the lawn) and they’ll save that money for things we won’t buy.

I saved money earned working as a babysitter. My dad always said we got paid our allowance every time we put our feet under the dining room table!! We learned to do house and yard work without being bribed and to take pride in our work. The work ethic is still with me today.

My first allowance was a quarter a week, which I then used to open a savings account. Five years later I bought my first car using everything I had saved, and those financial lessons have stayed with me until this day.

I have a fond memory of taking my little book to the bank when I made a deposit. Passbook Savings – wow that’s a thing of the past.

The older I got the more I learned to save. I saw the benefit of saving for emergencies and larger ticket items.

Small potatoes compared to today’s allowances

My parents made me track every cent – save 10% and give away 10% – and I had to use my allowance to “pay my bills” too. I was buying toilet paper for my bathroom when I was 10. It may have been a lot but it sure was an effective teaching tool!

Although we did not get an allowance, we were taught to save. The rule was “save half/spend half”. The save half was to save for college. The ‘spend’ half might also be ‘saved’ more short-term, to accumulate it to be able to spend it on something more costly. When grandma gave us $5 for birthday or Christmas, we made a trip to the bank to deposit at least half. I was able to graduate from college without any debt. Unfortunately, kids (and many adults) don’t understand the concepts of living within your income and saving.

The mint makes it first. It’s up to you to make it last.

My allowance was $1 a week, so not a lot to work with. I saved for more expensive items that my parents would not buy me, like Levi’s jeans. Times have changed, but I did learn to appreciate the value of saving toward a goal.

I wish my parents taught me about personal finance.

I did not get an allowance as a child, I earned my own money when I got a job at 14. That taught me about saving, money management and budgeting. It also teaches a little bit of independence as well.

Allowance was minimal, like 25 cents. I was expected to do chores as part of the family. When I wanted to take a trip at age 13, I was told I had to earn half, and was paid $5 to clean the house every week as if I were paid help. That taught me more about saving and managing than 25 cents a week ever could. I think when parents give their children large allowances, it never lets them want for anything and the value of money is what is lost. Until you have to save for something you desire, it doesn’t make sense.

Your personal example is the best way to teach. Frugality, patience, consideration — all good words.

I started working at 13 and had a passport book to manage monitor my savings account. Circa 1980

With 5 kids and 1 working parent, we didn’t receive an allowance but still had chores. Our parents taught us budgeting, work ethic and family values by example. When we were old enough to work, we employed those lessons. We’re probably some of the lucky few who have built retirement nest eggs.

I didn’t receive an allowance. My father would pay us for work that was completed. He taught us that is wasn’t about how much you make, but how much you save. That advice has served me very well.

The best money management lesson I had was in college when my $80 textbook became $10 for beer money.

I received money from relatives for my birthday and Christmas which my parents made me deposit in the bank. I never withdrew that money to buy something for myself. That money was eventually used to pay for books and entertainment in college. As a child, I participated in a Christmas club at my local bank. My parents put in $1 week and I ended up with $50 two weeks prior to Christmas and used the money to buy gifts for my family. Although I did not receive an allowance, I was still responsible for household chores.

So, even though I did not receive an allowance, I did start babysitting at the age of 10 (yes I was that responsible back in the early 70’s). I saved all of that money and at the age of 18 I had saved about $4,500. Enough to pay cash for my first car, but my dad informed me I needed to get a loan for the car so I could build my credit and save my own money for the personal property taxes and registration.

For my kids, I put them on a salary- $20/week and the salary must go into an investment account. Special projects were available for spending money. To use investment dollars, they had to debate the value of what they wanted to use it for and the value of college. My kids paid their way through college – no loans. The investment account helped as did budget guidance. They remain debt-free and professionally employed.

We bought savings stamps that converted into bonds this was done at school and that would have been our allowance per se. My child did receive an allowance and was required to save 25% each week when she graduated from college, she had money in the bank and no debt. I am still a saver to this date and am glad I chose to do so

My dad said I could have an allowance and even let me name an amount. Then he sat me down with a piece of paper and proceeded to list all of the things I’d have to pay for with my allowance and when I ended up owing him money we stopped that game! Having to do household chores is a responsibility of living in the house and doing a good job is expected. There are other ways to teach your children money management, budgets, saving for a goal.

I think a child should get an allowance, with the stipulation that 10% of it goes into a savings account every week, and take the child to the bank to do it. I think that would start the child on the right track!

My father matched any part of my allowance that I put in my savings account. I could withdraw the match after a year in the bank. As a teen, my father invested my savings and his match in a mutual fund, so I could learn about earnings and compounding. I used part of that money to help pay for my wedding!

Money management at any age takes discipline…something that appears to be lacking in today’s society.

I grew up understanding the important of saving and I am trying to teach my teenagers the same thing. It seems harder to save than ever, especially when anything their little hearts’ desire can be deliver same-day from Amazon! In our day, we had to get a money order and wait six to eight weeks!

Our “allowance” was more reward for hard work. “Dad, can I have $3 to go to the movies? Sure, but my car could use a good washing.” More work ethic teaching than money management.

I received .25 cents a week – hey, it was the 60’s. Every four weeks I would give my dad my four quarters and ask for a dollar bill. He would always smile and give it to me with a wink while commenting to my older siblings about what a good saver I was and maybe they could learn something from me.

My allowance went into a piggy bank, and occasionally emptied for deposit into a bank account. When I got my first job as a teenager, I was advised to put half my paycheck into savings.


NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Institutional Shareholder Services (ISS) or its affiliates.