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“Mom/Dad, I need $20 dollars to….”

  |   Cash Flow Planning and Management, Kids

The sun is shining,  the pools are open, school is out, and the kids are asking for money.

For those of you with kids, this is not a surprise.  What does seem to surprise some of my clients and friends is how often they are asked and the amount of money involved.  It is no longer $5 or $10.  From what I hear, $20 is an often-requested amount and even that may not be enough to cover the cost of a movie and snacks at an IMAX theater.

Looking for some ways to manage expectations, teach valuable money management skills, and make sure you are not always out of cash?  See below for some ideas.

1.  Decide on the amount

Decide on the amount you are willing to contribute each week and stick with it.

2. Communicate the parameters

Clearly communicate if there are any stipulations on how the funds can be used. For example, if you fully stock the fridge, is it OK for the funds to be depleted on fast food (a personal pet peeve of mine)?  Can the money be used to pay for a friend’s food or activity?

3. Consider a reward

Consider if you will reward good financial decision-making.  If there is money left over at the end of the week, especially if it is the result of a good decision, will additional funds be available the following week?

4. Pay upfront or reimburse

Decide if you will provide the funds upfront or reimburse after the fact.  For some kids, parting with their own money, even if they will be later reimbursed, often leads to more thoughtful spending decisions.

5. Track the funds

Determine how you will track the funds (and realize that keeping track in your head likely won’t work).  One option is to use a cash jar to hold the money for the week.  Empty jar = no more spending.  Another option is for each child to have a debit card which is preloaded with the funds for the week.

In my house, we use debit cards and the reimbursement method. The kids receive their allowance (which, by the way, is not tied to daily chores) on their debit card and they use that card to pay for the majority of their discretionary spending.   For things like movies, trips to amusement parks, etc., we decide in advance how much of the expense will be parent-funded and reimbursed to the card (which I can do within minutes..before I forget).  And, because all expenses are listed on the debit card, we avoid the “I have no idea where I spent the money” discussion and open the door to longer-term expense tracking.

6. Allow them to spend

Let the kids spend their own money when the cash jar/debit card is empty, even for something you think is ridiculous (such as spending $10 of their last $20 on a funnel cake sundae!). One of the best ways to learn about making good spending decisions is to actually have the opportunity to make decisions, even bad ones.


While summer vacation may be a break from traditional book-learning, it can be a great opportunity to learn some basic life skills!

AUTHOR - Tammy Wener

As co-founder of RW Financial Planning, Tammy oversees the financial planning process for all clients and manages the day-to-day operations of the firm. She truly enjoys getting to know her clients and is not shy about asking questions. Tammy has 15+ years of experience in the financial planning and estate planning fields and has worked with a broad range of clients including: couples simultaneously planning for financial independence, caring for their parents, and saving for college; newly widowed and divorced women looking to become more financially literate; young couples just starting out; families juggling the demands of a child with special needs; and financially independent individuals and couples exploring “what comes next.”