Setting an allowance

At the start of this year we switched Mr13 from a small amount of weekly pocket money to an allowance with spending responsibilities.

We wanted Mr13 to understand the value of money, but we didn’t know how to do that, so like every modern parent, Matt had a moan on Facebook about teenagers and their spending habits. Julia, a friend and parent of older teens, told us her method, which has produced grown-up kids making smart financial management decisions. Essentially, you pay a much higher weekly allowance and the kid has to spend it on clothes, shoes, haircuts, entertainment, computer games, public transport, you name it. This way, they come to understand how budgeting works and might even appreciate how much they’ve been costing us.

But how much do you pay?

I did a bit of googling and found a website that listed out all the typical expenses a teen has and the amount came to $85 a week. After some discussion and thinking about the variations we would make to the listed budget, Matt and I came to $50 a week as a place to start. So, we sat down with Mr13 and told him of our new plan to restructure the pocket money deal. I’d been hinting at it through December, so he was already prepared for something to change. But, rather than announce the figure, Matt asked Mr13 to list out the things his allowance would cover and work out what that might come to over a month or a year.

What expenses does the new allowance cover?

  • Non-household food inc. school canteen, takeaways etc
  • Clothing
  • Underwear
  • Shoes
  • Entertainment
  • Computer games
  • Discretionary laptop equipment
  • Gifts
  • Haircuts
  • Sporting consumables eg skate stuff
  • $40 per month towards mobile phone & data expenses (in line with the cheapest phone plans on offer) 

When he went through this list, we landed on an amount pretty close to $75. Julia’s model included a portion set aside for saving, but we haven’t introduced that yet.

We asked Mr13 how much he thought a weekly allowance should be, given the amount we’d arrived at. He said $50! I said, “well, here’s your first lesson: negotiation! I would have started at $100.” Nonetheless, we agreed together that the starting point would be $50 and we would see how it goes. He was ok with that, probably because he didn’t know what he was walking into. Also, one of the benefits I pitched was that he had total control over what clothes he bought. No more Kmart short-shorts from Mum.

To make it official, I drew up a contract listing everything we would cover and everything the allowance would have to cover. The contract lives on our notice board, next to the fridge, alongside the list of permitted recyclables.

Contract of Allowance

How did he take it?

It’s kind of hard to tell. Like his mother, he doesn’t reveal much of what he’s really thinking. However, he seemed open to it and was willing to give it a shot.


Are you working with similar model? Leave a note in the comments. I’ll be back next time with a budget spreadsheet Matt came up with so Mr13 could do some financial modelling and forecasting (on the spot! He loves that sort of thing).


  1. Aprill, our Ms 14 has a monthly (well, four weekly) phone plan of $20, with unlimited domestic calls and texts, and a reasonable amount of data (2.5GB, how much do teens need, especially when they can leech off WiFi)… might help if/when the budget blows!

    Out of interest, where are the agreed household chores documented?

    I’m finding this a really interesting series to follow, rare these days on the interwebs. Thanks for taking the time to share.

    1. Good tip on the phone plan! Thanks for sharing.

      Regarding chores, Mr13 is the primary carer for unstacking the dishwasher and he clears plates and tidies up after dinner. He’s also been responsible for his own laundry since he started high school. Mr10 takes the bins out.

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