Teaching Kids Financial Literacy: Top Q&A for Parents

The Golden Rule: $1 per week for every year of age.

For a 10-year-old, that means $10/week (or roughly $40/month). This amount is usually enough to cover:

• Discretionary spending (toys, treats)
• Small savings goals
• Charitable giving (if you practice share/save/spend)

Tip: As expenses grow (like teen social outings), you can increase this base rate or add "Gig" chores for extra earning power.

We recommend a Hybrid Model to get the best of both worlds:

1. Base Allowance (Unpaid): A small monthly transfer that is NOT tied to chores. This provides consistent capital for them to practice budgeting.
2. Daily Duties (Unpaid): Standard expectations like making the bed or clearing the table. These are "citizen of the house" duties.
3. "Gigs" (Paid): Extra jobs like washing the car ($10) or weeding the yard ($15). This teaches the correlation between effort and income.

Encourage "Gigs" and Entrepreneurship.

Instead of just giving them money, help them find ways to earn it. This builds amazing work ethic.

• Home Gigs: Washing windows, cleaning the garage, or organizing the pantry.
• Neighborhood Jobs: Walking dogs, watering plants while neighbors are away, or raking leaves.
• Micro-Business: A classic lemonade stand, selling handmade bracelets, or reselling old toys.

The Sweet Spot: Ages 6-7.

At this age, children are usually learning basic addition and subtraction in school. They understand that money is exchanged for goods.

However:

• Age 4-5: You can start with a visual jar system.
• Teens: It's never too late! Starting at 13 or 14 is critical before they leave the nest. They need a safe space to make mistakes with $50 so they don't make mistakes with $5,000 later.

A common framework is the 50/40/10 Rule:

• 50% Spending: For immediate wants (toys, candy).
• 40% Saving: For larger goals (video game console, bike).
• 10% Giving: For charity or gifts for others.

Most importantly: Do not dictate what they spend their "Spending" money on. If they buy a cheap toy that breaks in 5 minutes, that regret is a valuable lesson!

Generally, no. Education experts suggest that paying for grades can decrease internal motivation. You want them to learn because they're curious, not just for a payout.

Better Alternatives:

• Celebrate efforts, not just results ("I saw how hard you studied").
• Use a celebratory dinner or outing as a reward for a good report card, rather than a direct cash transaction.

Stay strong! The answer should be "No."

Running out of money is the most important lesson they can learn. If you bail them out, you rob them of the experience of "scarcity."

If it's an emergency (unlikely for a kid): You can offer them extra chores ("Gigs") to earn the money, but don't just advance their allowance.

Yes, track it!

You can use the "Deposit" feature in PocketJr to add birthday money to their digital balance. You can take the physical cash to use for groceries as a "swap."

This keeps all their net worth in one visible place and allows that birthday money to earn interest too!

Trust but verify.

In PocketJr, you approve transactions. Use this as a conversation starter, not a policing tool. Ask "Why do you want this?" rather than saying "No."

Unless it is dangerous, illegal, or against family values, let them make the purchase—even if you think it's a waste of money. That's how they learn.

Usually around age 16-17.

Once they have a part-time job and a real bank account, your role shifts from "Banker" to "Advisor."

You can stop the weekly "free money," but continue to support them with expenses like car insurance or phone bills as they transition to full independence.

This is exactly why we built PocketJr.

You act as the "Bank." No real money moves until they want to cash out.