A practical guide to setting allowances, tying them to chores, and using them to teach real money skills.
Giving children an allowance is one of the most effective tools for teaching financial literacy. But parents often wonder: how much should I pay? Should it be tied to chores? How do I actually pay a kid in 2025 — cash, e-transfer, or an app? This guide answers all of it.
A common rule of thumb is $1–$2 per week per year of age. So a 7-year-old gets $7–$14/week, a 12-year-old gets $12–$24/week. This scales naturally with age and responsibility. However, the right amount depends on what the allowance is meant to cover.
| Age | Suggested Weekly Amount | What It Covers |
|---|---|---|
| 5–6 | $3–$5 | Small treats, savings practice |
| 7–9 | $7–$12 | Toys, activities, some clothing |
| 10–12 | $10–$20 | Entertainment, clothing contributions |
| 13–15 | $15–$30 | Social outings, clothing, personal items |
| 16–17 | $20–$50 | Most personal expenses |
These are starting points — adjust based on your cost of living (Toronto vs a small Prairie town differ significantly), your family's income, and what you expect the allowance to cover.
This is one of the most debated allowance questions. There are two main philosophies:
Children receive a set amount regardless of chores. The argument: household contributions are expected of everyone — they're not paid labour. The allowance teaches money management separately from the lesson that family members contribute.
Children earn their allowance by completing assigned tasks. The argument: this mirrors how the real world works — you get paid for work. It builds a connection between effort and reward.
Many financial educators suggest a middle path: a base allowance for being part of the family, plus bonus pay for extra chores beyond the basics. This way, kids learn both unconditional financial responsibility and the earn-more-work-more principle.
When children receive their allowance, divide it into three categories:
Physical jars work well for younger children — they can see the money accumulate. For older kids, digital equivalents (bank account, allowance app) reinforce the same concepts.
Works well for younger children who benefit from seeing and touching physical money. Downside: harder to track, easy to lose. Coins are great for ages 5–8.
Easy for parents, works well if the child has a bank account. Teach them to check their balance and recognize the deposit. Good for teens with smartphones.
Canada's leading dedicated allowance app. Parents assign tasks, kids complete them and get paid to their Mydoh prepaid Visa card. Kids can see their balance in real time, parents see all spending. $2.99/month per family. Best for ages 6–16.
For older teens (17–18+), loading an allowance onto KOHO teaches real-world spending. The app shows every transaction in real time and categorizes spending — an excellent tool for building financial awareness.
The allowance is most valuable when paired with ongoing conversations:
Most financial educators advise against paying for grades. Education is an obligation, not a job. Paying for grades also creates extrinsic motivation that can undermine intrinsic love of learning. Better approach: praise effort and process, not just outcomes, and keep allowance separate from academic performance.
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Get KOHO Free — Use Code 45ET55JSYAA well-structured allowance is one of the highest-impact financial literacy tools you can give your child. Start small and early, use the three-jar system, let natural consequences teach, and gradually increase the amount and responsibility as they grow. Whether you use cash, e-transfer, Mydoh, or KOHO, the vehicle matters less than the consistent habits and conversations it enables.