The short answer
Pocket money for kids works best when three things are true. The amount is age-appropriate. The system is visible, so the child can see what they have earned and what they are saving toward. And at least part of what they receive is tied to consistent effort, not handed over automatically.
A flat weekly allowance with no connection to the household teaches children that money arrives regardless of what they do. A purely transactional system where every chore has a dollar value turns ordinary family contributions into negotiations. The middle path is what actually builds financial capability.
This guide covers how much pocket money to give by age, when to tie it to chores, how to avoid the common traps, and how a digital system changes the calculation entirely.
What is pocket money and why does it matter?
Pocket money, also called an allowance, is a regular sum of money given to a child for their own spending or saving. In Australia, New Zealand, and the UK, "pocket money" is the common term. In the United States, "allowance" is more widely used. The concept is the same.
The reason it matters is that money is one of the few areas where children make real decisions with real consequences. A child who is handed five dollars and chooses to spend it all on lollies learns something that no conversation about budgeting can teach. A child who saves for six weeks to buy a specific toy learns delayed gratification through experience, not through instruction.
Pocket money is a controlled environment for financial learning. Done well, it produces teenagers who understand saving, spending, and the difference between needs and wants. Done poorly, it produces teenagers who expect money to arrive without thinking about where it comes from.
How much pocket money should I give my child?
There is no universally correct amount, but the common rule of thumb is one dollar per year of age, per week. A five-year-old gets five dollars a week. A ten-year-old gets ten. A fifteen-year-old gets fifteen.
This is a starting point, not a rule. Three factors should shift the number:
- Cost of living in your area. Five dollars buys more in a country town than in central Sydney or London.
- What the money is meant to cover. If the child is expected to buy their own small treats and save for small purchases, one dollar per year of age is reasonable. If they are also expected to cover gifts for friends, school lunches, or phone credit, the amount needs to go up.
- What siblings receive. Perceived fairness matters more to children than absolute amounts. A three-year age gap between siblings is easier to justify than arbitrary differences.
Here is a rough guide for Australian and UK families, updated for current costs:
| Age | Typical weekly amount |
|---|---|
| 5 to 7 | $3 to $7 |
| 8 to 10 | $8 to $12 |
| 11 to 13 | $13 to $20 |
| 14 to 16 | $20 to $40 |
| 17 to 18 | Often replaced by part-time job earnings |
Should pocket money be tied to chores?
This is where most parents get stuck. The argument against tying pocket money to chores is that children should contribute to the household as a member of the family, not because they are paid. The argument for tying it to chores is that children need to connect effort to reward, because that is how the real world works.
Both are right. The solution is to separate the two categories.
Some household tasks are simply part of being in a family. Putting your plate in the dishwasher. Making your bed. Tidying your own room. These are not paid, because doing nothing about them is not an option.
Other tasks are contributions beyond the baseline. Vacuuming a shared space. Feeding a pet. Folding the washing. Emptying the bins. These are the tasks where earning makes sense.
A mixed model, where baseline chores are expected and additional responsibilities earn pocket money, teaches children two things at once. Some things you do because you live here. Some things you do because you want the reward.
For more on which tasks fit each category at each age, see our guide on age-appropriate chores for kids.
Why a visible system beats handing over cash
The biggest change in how modern families handle pocket money is that it has become digital. A weekly envelope of coins used to be the standard. Now, most money the child will ever encounter is invisible, stored on cards and in apps.
This shift has implications. A child who has never held cash has no intuition for the weight of ten dollars. A child who has only ever seen their balance as a number on a screen treats money like a game score.
A good pocket money system makes the earning visible. The child can see exactly what they have banked. They can watch a balance grow each time a task is completed. They can set a savings goal and watch it get closer.
When the earning is visible, the spending becomes meaningful too. A child who has watched their balance rise from zero to twenty dollars over three weeks thinks very differently about dropping all twenty on a small plastic toy than a child who received the same twenty as a handout.
Visibility is what turns pocket money from a transaction into a lesson.
How to handle the "I want to buy X" conversation
Every pocket money system eventually hits the same moment. The child wants to buy something. The parent thinks it is a waste of money. The tension is obvious.
The temptation is to intervene. "That is too expensive." "You will regret it." "Save your money for something better."
Every one of those interventions short-circuits the lesson. The point of pocket money is for the child to learn from their own choices. That means sometimes letting them buy the thing they will regret.
Two guardrails help. First, agree on a ceiling. For children under ten, a maximum single spend of the week's amount is reasonable. For older children, allow larger purchases but insist on a 24-hour cooling-off period for anything above a set threshold. Second, make sure there is always something in the savings jar that is not available for impulse spending. A portion of each payout goes to long-term savings and cannot be touched.
Within those guardrails, the child chooses. And sometimes they choose badly, and that is the point.
When to introduce savings goals
Savings goals should be introduced as soon as the child wants something that costs more than one week's pocket money. For most children, this happens by age six or seven.
A savings goal is simply a named target. "I am saving for a Lego set that costs forty dollars." The child understands that some portion of each payout will be held aside for that goal until they reach it.
The power of a savings goal is that it makes patience visible. The child can see how many weeks away they are from their target. They can choose to add extra from a special occasion. They can change their mind mid-way and pick a different goal, which is also a useful experience.
Children who have regularly set and achieved savings goals by age twelve are demonstrably better at delayed gratification than children who have only ever spent as they earned. The research on this is consistent.
Common traps to avoid
Paying for every small thing. A household where the child is offered money for every contribution trains them to ask "how much?" before doing anything. Baseline chores should never be paid.
Inconsistent payouts. A weekly pocket money system that runs three weeks on, one week off because the parent forgot or ran out of cash teaches the child that the system is unreliable. Use a digital tracker so payouts happen automatically.
Using pocket money as punishment. Withdrawing pocket money because of unrelated misbehaviour undermines the system. The pocket money is for completing tasks. Behaviour issues should be handled separately.
Undermining the spending. Agreeing the child can spend the money however they want, then criticising the purchase, teaches them not to ask. If the money is theirs, it is theirs.
Not reviewing amounts. A ten-year-old who is still on the allowance they had at age seven will notice. Review at least once a year.
Frequently asked questions
At what age should I start giving pocket money? Most families start around age five, when children can recognise coins and understand the idea of saving for something. Some start earlier with a token system. Any earlier than that and the lesson is lost on the child.
Should siblings get the same amount? Not necessarily. Age-based differences are easy to justify. A five-year-old and a ten-year-old should not receive the same pocket money, because they have different needs and different capacity. Be transparent about the rule.
What about digital pocket money apps? Digital systems that track earning, saving, and spending are increasingly the standard. They remove the logistical friction of always having the right coins, and they make the child's progress visible. The important thing is that the child can see their balance and goals at a glance.
How do I handle birthday money and gifts from relatives? Treat them as separate from pocket money. A portion can go into the savings pool, a portion into free spending. The decision is the child's within the agreed proportions.
What if my child saves everything and never spends? That is not a problem. A child who discovers the satisfaction of saving is developing a useful skill. Only worry if saving becomes anxiety about spending, which is different.
The long view
Pocket money is not really about the money. It is about giving a child a small, low-stakes version of the adult financial world. They earn. They choose. They save. They spend. They sometimes regret. They adjust.
Children who have navigated that cycle many times before they leave home are children who understand money as something that is earned and managed, not something that simply appears.
The system you build around pocket money today is the financial foundation your child will carry for the next fifty years. It is worth getting right.
For more on building the kind of household where effort is visible and rewarded, see our guides on a reward system for kids that lasts and teaching kids responsibility.
