Raise money-smart kids: How to teach financial literacy at home through the magic of allowances

If you got an allowance when you were a kid, did you realize you were getting more than just spending money in your pocket? You were actually getting a crash course in financial responsibility.

It turns out 71% of today’s parents are on the same page with giving their kids an allowance, according to the 2025 Family Banking and Allowance Study by Wells Fargo.

“Children today have different financial experiences than their parents did,” said Louann Millar, leader of youth and student banking at Wells Fargo. “We have an opportunity, and a responsibility, to provide support, guidance, and tools to help parents set their kids up for success with money.”

“Whether you’re giving your child $5 or $35 a week, the payment opens the door to a financial conversation,” she said. “You can explain what a dollar can buy and how budgeting for tomorrow begins today, while giving your children the ability to manage their own money with online and mobile banking tools.”

While 85% of parents want to have more conversations with their kids about good money habits, more than half of parents struggle to talk about money in a way their kids will understand, according to the study. “A lot feel they aren’t fully equipped,” said Millar. “I’ve heard of adults who don’t think they have the best money habits and feel like they have imposter syndrome when teaching their kids about money.”

The good news is you both can benefit from learning together. “The weekly activity of giving the allowance presents an opportunity for parents to discuss needs versus wants with their children. It’s an opportunity to discuss your own money habits and prioritization,” Millar said. Don’t be scared to share your own mistakes. These early conversations are great money lessons for kids — and they’ll help you feel more confident about how to teach kids about money, too.

Find teachable moments. It can be difficult to find time to sit down and talk specifically about finances, but natural opportunities to teach pop up every day. For younger kids, a trip to the grocery store could include a discussion about wants versus needs. For older kids, show them how to be smart consumers by comparing prices, looking for deals, and making informed purchasing decisions.

Talk to your kids about what they spent their allowance on and how it made them feel. Consider these value-based conversation starters: What matters in our family? How do we feel about our family? What could we do to help someone else, such as philanthropy or charitable events? If someone is responding with a lot of questions, go where the energy is; maybe they will be the early adopter for financial literacy.

Introduce mindful spending. Encourage them to consider the value and necessity of each purchase and to prioritize their needs over wants. Discuss the joy of immediate rewards like toys, candy, or gaming power-ups. Conversely, help them envision larger purchases such as electronics, a new bike, or even a car as part of their long-term dreams. Help your child set and work toward saving for a specific item they want, demonstrating delayed gratification. This is a great way to show how to save money as a kid while still enjoying small rewards.

How often should kids receive an allowance: weekly or monthly? Each frequency has its own benefits and can be tailored to fit different needs and circumstances. Ultimately, the cadence depends on your child’s age, maturity, and financial understanding, as well as your preferences and goals. Don’t be afraid to test and learn together.

If you’re wondering what age to give an allowance or how much allowance to give, consider your child’s maturity and financial understanding. The right schedule depends on what works best for your family. Here are some ways to think about it: 

Weekly

• Helps kids learn to manage money on a short-term basis, which can be beneficial for younger children who are just starting to understand financial concepts.
• Requires more frequent monitoring and adjustments, so it may be good if you prefer regular check-ins and discussions about money management. As time goes by, consider stretching to bi-weekly.

Monthly

• Encourages long-term planning and saving. It can be a good choice for older children who are ready to handle larger sums of money and make more significant financial decisions.
• Requires a higher level of responsibility and self-control. It may be suitable for families who want to foster independence. 

“The most surprising result of this study is how much cash is being used, even as parents understand their children prefer digital payment options,” Millar said. With cash, you’ve got that tangible feeling of running out. “When it’s gone, it’s gone. Some adults I know take out cash at the beginning of the week for fun money — that’s their guardrails,” she said. But it also can be easy to lose — in the bottom of backpacks, on a bus seat, in the washing machine, and so on.

The majority (70%) of parents in the study believe that teaching kids about money today should emphasize digital tools, such as peer-to-peer (P2P) payments like Zelle® and direct deposits or transfers to bank accounts. And not surprisingly, teens aged 15 to 17 years are more likely to receive allowance through P2P (34%) compared to younger kids.

As you share your knowledge on how to use these tools, you can discuss with your child ways to avoid online payment scams. For example, explain that you shouldn’t use Zelle® unless you know and trust the recipient, because once you authorize a payment to be sent, it can only be canceled if the recipient has not yet enrolled with Zelle®. And do not share your private account access information, so scammers can’t send or receive online payments without your permission. Read more about online payment scams.

How much guidance should you give your child? According to the study, 65% of parents find it hard to let their kids make money mistakes, even though over 75% trust their kids to make good choices. Almost all parents in the study understand that early success with money starts with small, supervised choices. Choosing an account with guardrails allows you to have visibility without being a helicopter mom or dad. It’s important to find a balance, allowing your kids to learn from their mistakes while still providing the necessary support and guidance.

When choosing a bank account for your child, consider options like Wells Fargo’s Clear Access Banking account. Key features include mobile deposit,² bill pay, and the ability to send and receive money with Zelle®¹.

Consider opening a joint savings account, such as the Wells Fargo Way2Save® Savings account, to help your kids start building smart money habits. Teens can also set up automatic transfers³ from their checking account on a daily or monthly schedule to stay consistent.

Using a bank account can give your kids a big-picture view of their deposits, savings, and spending. Some banks offer virtual assistants, like Fargo®⁶, to help them understand their finances even more.

Just as you ensure your child is safe on social media, it’s important to check on their finances. With joint ownership or authorization, you can monitor their bank account for fraudulent or suspicious transactions, or coach them to do so. This includes checking if their information has been stolen, spotting unauthorized charges, or identifying scams where they might be tricked into sending someone money.

Economic pressures like inflation are influencing family financial behaviors. While 29% of parents have increased their kids’ allowances over the last year to keep up with inflation, 65% have not, and 6% have decreased the amount they give their children, according to the survey.

“It’s different for different families,” said Millar. “While one parent might say ‘I’m increasing your allowance because inflation is causing prices to rise,’ another might say ‘Inflation is impacting this family as a whole and therefore I’m going to have to decrease your allowance.’” These are money lessons for kids based on real-world economics.

Whether you’re wondering what age to give allowance or how to teach kids about money, starting early with consistent habits can lay the foundation for lifelong financial literacy. “There’s no one way to talk about money with your kids,” Millar says. “The most important thing is to just do it.”

What’s the going rate?

The average weekly allowance for kids ages 5 to 17 is $37.19 in 2025, according to the survey. And allowances generally rise as kids age. But don’t sweat it too much. “Any amount is fine as long as you don’t miss this opportunity to talk about money with your child,” said Millar.

About the survey
The findings are from a Wells Fargo survey, with data collection provided by Ipsos, conducted between April 28 – May 8, 2025. A sample of 1,587 U.S. parents — aged 18 and older with at least one child between 5 and 17 years of age in the household — were surveyed online in English, as part of Ipsos Omnibus shared survey program. The results of this research have a credibility interval of plus or minus 3.0 percentage points for all respondents. Respondents were asked questions about their child in one of the following age groups: 5 to 8 years of age, 9 to 11 years of age, 12 to 14 years of age, or 15 to 17 years of age. If they had more than one child, they were randomly asked about only one of the age groups.