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How Much Allowance Should I Give My 12-Year-Old?

Cuerpo

So, you’ve been following the one-dollar-per-week-per-age allowance system for a while; however, now you have a tween and you feel the time has come for her allowance to mature (whether or not you think she will). Your tweenager (Is that a thing?) is at the perfect age to start taking on more money responsibility.

By the time your child becomes a tweenager (It’s now a thing.), he has hopefully saved for several SMART goals. He’s been making money choices regularly by putting his allowance into the Share, Save and Spend Smart jars. He’ll also have been receiving increased allowance each year commensurate with his rising maturity level. He’s feeling money-smart and slowly becoming money-empowered.

Eventually, your tweenager will advance to the “Breakthrough Allowance”. As he moves from childhood toward adulthood, you want to help him become more responsible with more money. The way you distribute the money and his increased responsibilities should make him feel more like an adult. Again, be explicit about what you’re doing. You can tell him both he and his allowance are growing up.

You want to continue to help your child improve at the core skills and to recognize the impermanent excitement that stuff brings. More money and bigger things won’t change that feeling!

None of these tasks will be simple. Nothing involving a teenager ever is. But with a plan and a commitment to raising a money-smart kid, you can help him break through to become a money-empowered young adult.

The Breakthrough Allowance

Your tweenager is now ready for a major developmental step. She’s moving past the starter allowance. Her responsibilities have increased substantially. She’ll need to create a yearly spending plan, and her allowance intervals will change.

Since she’s graduating from her starter allowance, a little celebration might be in order. Before she embarks on the next stage of this journey, commend her for the progress she’s made in learning the three core money-smart skills: saving for goals, making smart money choices, and distinguishing needs from wants. Let her know this step is a meaningful milestone.

There are some obvious areas of responsibility for your burgeoning money maven: clothes, communication, gifts and food. You’ll be increasing her total allowance amount substantially to accommodate for these new areas of control. The additional responsibilities of clothes, communication, gifts and food all belong in the Spend Smart domain. This is a good time to consider using a digital allowance by setting up a Teen Checking account, and giving her a debit card and access to Online Banking – not to mention automated allowance transfers.

You can continue the Share and Save jars learning – in a sense – by helping her to set up automatic transfers from her Teen Checking into separate accounts.
Now that you’ve helped her transition into a big girl account, here’s how you’ll help her “breakthrough”:

how much allowance table
Clothes

Giving your child control of purchasing clothes as soon as you can is beneficial. You’ll be shocked at how quickly her friends’ opinions will impact her life. Without a plan, a clothing decision swiftly becomes something for which adult input isn’t solicited – until the time comes to swipe the debit card.

Transferring clothing responsibilities to your child helps stave off nagging to twenty bucks here and thirty bucks there. More importantly, your child then has skin in the game and will more thoughtfully consider her purchases. You’ll find implementing this plan will save you significant money in the long run.

Communication

When you decide your child should have a phone, she should at least pay her portion of the monthly bill. This practice is particularly easy to do if you’re using an automated digital allowance.

Gifts Adding gifts for friends to her responsibility basket is sensible. This practice forces her to think – yep, Spend Smart – about her own gifting. Watching this change in perspective is fun. When your child is responsible for buying gifts, they generally become more meaningful when the money is coming out of her own pocket – a light bulb goes off.
Food

Have your child make his own lunch. If you want to improve your family’s morning routine, then try this trick. It works wonders!

You buy all the fixin’s for lunches and snacks at no cost to them. The decision whether to bring lunch or buy it at school with their own money is theirs. This system serves as an incentive against blowing money on too many school lunches – which can add up.

We don’t recommend going cold turkey and budgeting nothing for school lunches. When you first set up their allowance, you’ll want to allocate money for a few school lunches per month. You’ll need a safety valve on those “special” mornings when your child has a meltdown. It’s only a matter of time. Be prepared!

Change the frequency When you transition to the Breakthrough Allowance, consider switching from a weekly or biweekly payment to a monthly arrangement. Receiving chunks of money is more akin to what happens in the real world. This practice will let her experience that start-of-the-month feeling of being flush with cash (like her paycheck just cleared). If she blows it early in the month, then let her feel the pain. As hard as this might be, she needs to learn this life lesson. Let her struggle to manage her money better. Don’t bail her out.

You have flexibility in making the leap from the basic allowance to the new Breakthrough Allowance. And if you’re worried that going “all in” is too much for your child, start with one area – gifts, for instance. Or if you feel comfortable she’s ready to make the breakthrough and tackle more responsibility, then pile on the challenge.

Here’s an example to help you begin the Breakthrough Allowance of $125 per month.

breakthrough allowance table
Category Cost x Per x Units $/Year $/Month
Clothes $10 1 Month 12 Months $120 $10
Communication $15 1 Month 12 Months $180 $10
Gifts $20 20 Birthday 1 Year $400 $33
Food $10 5 Month 12 Months $600 $50
Spend Smart           $1,300 $108
Save $10 1 Month 12 Months $120 $10
Share $6 1 Month 12 Months $72 $6
Subtotal             $124
A little extra             $1
           

Total

$125

Be prepared – and proud – when this becomes a negotiation. She’ll be feeling more money-empowered than when you started her on this money-smart journey. You want her to negotiate the best possible deal for herself – another great life skill.