A collaborative piece by Don Opatrny and Amelia Renkert-Thomas of Engaged Ownership


The more you talk openly with your kids while reinforcing good money skills, the earlier your children will become confident and competent in their abilities to manage their financial capital. Below are a few areas which can be problematic for families, with suggestions that could help. We’ve targeted these for middle school-aged kids, but the ideas can be adjusted based on your kids’ ages.

1. Don’t think of an allowance as payment for chores. An allowance is an investment parents make to help their kids learn money skills—using real money—throughout their developmental journey. Chores, by contrast, are the contributions kids make to the smooth operation of their family’s life together. Making this distinction will remind you that paying the allowance is only part of the program—teaching and demonstrating good money skills needs to be part of the program too.

2. How much allowance? Allowances should be age-appropriate and sufficient to fund the total expenses the recipient will be expected to pay for over a set period of time. Younger kids can be responsible for managing expenses for extras and charitable gifts, while high schoolers might be ready to manage something bigger, like their own clothing budget or car expenses.

3. If kids run out of money, consider creating opportunities for them to earn additional money by completing extra jobs (such as washing or vacuuming the family car or weeding the garden), baby-sitting, or doing odd jobs for neighbors.

4. The mechanics of paying allowances can get messy—parents don’t have cash on hand, kids can’t get to the bank on their own. We live in a world where monetary transfers are increasingly cashless. Consider paying allowances via debit card. Set up a system to deposit funds automatically every week on a given day, so that kids can learn to think about cash flow.

5. Teach kids to use electronic banking safely. Help them set up apps on their phone and online banking on their computer, and make sure they know how to use them. Representatives at your local bank can be very helpful. Also teach them about secured vs. unsecured wifi, so that they know when it’s safe to log in, and when it isn’t.

6. What happens when kids don’t make their contribution to the smooth operation of the household by doing their chores? There should be an option—perhaps a pricey one—to pay others to do it. Mom has to clear dirty dishes or wash cookie sheets after an impromptu after-school baking party? In households that practice the 10 Basic Money Skills, there’s a price for that… Parents can create accounts through Venmo or other money-transfer apps for each child to enable them to make payments electronically when chores don’t get done.

7. Talk with your kids about how they’re managing their allowances, but don’t direct or judge. This is a learning process. Asking supportive questions is a powerful way to learn, but it can also trigger embarrassment or shame. Help kids focus on using the money skills better the next time.

Remember that making mistakes when $50 or $200 is at stake will help kids avoid making mistakes with much larger sums. Whatever you do, and however much they whine, weep or cajole, don’t bail them out! (But don’t chastise or tease them, either.) Help them feel safe and loved as they acknowledge their mistakes, and talk about your own efforts to improve your money skills. If you all can talk about money mistakes together, family members can learn from each other and advance their skills more quickly.