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Money to Grow on:  Teaching Your Children to Spend and Save Wisely with Allowance

Money to Grow on: Teaching Your Children to Spend and Save Wisely with Allowance

By Anton Simunovic

Developing healthy money habits early on can set your child’s financial compass for life. Parents are best able to encourage financial self-reliance in their children by paying them an allowance – as long as it’s implemented effectively.


Tips for Effective Use of Allowance.

1. EMPOWER OUR CHILDREN. Responsible experience is the best teacher, so let our kids practice with real money. Truth is, when the kids spend their money and not ours, they get thoughtful – and fast. And if “mistakes” are to be made, isn’t it better they are made when dollar amounts and consequences are low? So let them practice money, just as they practice sports or instruments.
2. KEEP IT BALANCED. Allot a portion of every dollar your child earns to three jars: one for saving, the other two for spending and sharing. 50% to the save jar, 40% to the spend jar and 10% to the share jar is a good rule of thumb. This establishes healthy money patterns before they leave the family nest.
3. BE CONSISTENT. Pay the right amount on time! Allowance may seem trite to an adult, but to a young child, it’s their source of independent income. Give allowance the proper respect and attention it deserves. It’s a parent’s best tool to teach kids about money.
4. HOW MUCH. Consider the age of your child, your expectations of what theallowance will be used for, and what your family budget can afford. Before high school, kids are often paid their age or half their age in dollars perweek.

5. EMBRACE TECHNOLOGY. This generation responds well to the modern uses of technology and it has revolutionized the way they learn. The internet allows kids to connect the dots between earning money, understanding the tradeoffs between spending and saving, and developing a balanced relationship with money by sharing some of it. Tracking decisions gives kids a picture of how money works.
6. ALLOWANCE AND CHORES. Kids who live in the house, have to help manage the home. That’s what it means to be part of a family – case closed. To ensure follow-through on chores consider revoking TV, internet or cell phone privileges. This way kids are still given the chance to work on their all important money management skills.




Anton Simunovic is Founder and CEO of which teaches kids how to be responsible with money and the importance of giving back. ThreeJars originated from conversations with his wife, where they decided they wanted to raise their six children with minds for managing money and hearts for helping others. Anton has been a financial investor, operator and entrepreneur since earning his Harvard MBA in 1992, and has sat on the boards of more than 20 for-profit and not-for-profit organizations around the world.