How to Start Your Child on an Allowance 

Have you ever had the “Do you give your child an allowance?” chat with other parents? If you have, you probably encounter at least one parent who sticks to one of of these philosophies: 

      • They 100 percent believe in an allowance and pay up the same time every month. 
      • They staunchly disapprove of it: “I give my kid everything he/she needs.” 
      • They dole out money every once in a while but not that consistently.

We’ll walk you through a few different ways to handle an allowance for your child, a few different factors to think about and also, one final alternative you may want to consider: Investing in UNest (well, actually, you should do that anyway).

Types of Allowance Options 

In terms of an allowance option, do you think you know what you want to do for your own child? Take a look at the following options: Chore-based allowance, repeated allowance and a hybrid approach. 

Type 1: Chore-Based Allowance

As you might imagine, this type of allowance looks just like it sounds — you offer the allowance based on the number of chores your child does. If he or she ticks all the boxes for the expected chores, your child gets the allowance!

Type 2: Repeated Allowance

You also might want to designate a particular time of the month to offer an allowance. In this very straightforward approach, your child doesn’t have to do anything to receive the allowance; he or she receives the same amount of money at the same time every month. 

Type 3: Hybrid Approach

You can also opt for a hybrid approach, which means that you offer the allowance at a specific time but if kids want to tap into more money, they can earn more with a chore-based approach. 

This option gives them extra motivation to work harder to earn what they want. and you also implement a reward system. It’s kind of like in school or how organizations reward employees based on performance. For example, if your child does a great job of folding all the laundry without asking, a “bonus” might be in order.

Things to Consider 

Before you choose the right type of reward for your child, take a look at the following considerations.

How Much Will You Plan to Give?

What’s an appropriate amount to give? As you might imagine, this depends on personal preference and affordability factors. You may want to offer your kids the same amount per week based on their age. For example, your 10-year-old would get $10 per week and your 11-year-old would get $11 per week. You might feel like another number makes more sense for your kids.


You may want to institute boundaries as to how they can use their cash. 

What can they/can’t they buy with their money? Even though it’s “their” money, you still need to make sure your kids understand that they can’t spend the money on chocolate every week so that it’s flowing out of your pantry. An allowance offers you a great opportunity to teach your kids about how to use money wisely — not spending it all on chocolate is a great first lesson.


You want to stay as consistent as possible with whatever allowance policy you decide upon. For example, experts believe you should never withhold allowance as punishment for bad behavior or poor grades. After all, the point is to build trust, communication and cooperation. You don’t want to look like the “bad guy with lots of money” every week. Stick to your end of the agreement when it comes to the allowance and find another way to discipline your child when he or she needs it.


A three-year-old will not understand the pros and cons of saving money versus spending it, so wait until your child reaches age six or seven to get started with an allowance. However, sometimes six-year-olds aren’t responsible enough to understand how to use money, so don’t get started too soon!

Make the Experience Rewarding 

Kids like money, and the experience should make them feel great. However, pay attention to how your child treats his or her money. Does he squirrel it away? Blow it on video games every chance he gets? Buy things for others? Not surprisingly, how he starts out early in life treating money can carry through as an adult. 

Consider Encouraging Your Kids to Make Their Own Money

Sometimes, it’s best to let them earn their own money — and in many ways, that can teach a more valuable lesson than waiting for a handout every week. However, every kid is different! 

In this day and age, your child can make money in so many different ways. Gone are the days when a 10-year-old had to wait till she could get a babysitting certificate till she turned 13. The digital world turns into so many opportunities for kids — as long as you play supervisor through all their adventures. For example, your child can: 

      • Online surveys: Take online surveys, such as with Swagbucks and Opinion Outpost. These online surveys usually don’t pay very much but can offer a great way to make a little money with low effort.
      • Make illustrations: Create illustrations using Canva and sell them on platforms like Etsy. Similarly, your child may want to make crafts or jewelry and sell them on Etsy as well.
      • Create YouTube videos: Some kids can make a lot of money on YouTube, putting together helpful videos, such as his or her own cooking show for kids. 
      • Start a blog: Does your child love to write? Why not try to monetize a blog? It’ll likely take a long time to make money with a blog, but for kids with stick-to-it-iveness, a blog could end up really lucrative later on.
      • Take photos: Does your child have a good eye for photography? Encourage him to develop his skills and sell the photos online.
      • Create a digital course: Create a course to sell digital goods — it doesn’t cost very much, and your child may really enjoy the videoing aspect of course creation.
      • Put those video game skills to good use: Most kids love video games, right? Why not encourage your kids to create their own?
      • Test apps for pay: Kids can test apps on UberTesters or other app sites. Since they already like apps, this option makes sense!

Is Your Family Allowance Ready?

If you still aren’t sure whether your child’s ready for an allowance or you’re still on the fence about whether you’re all in, channel that money into UNest until you decide. Use our simple college savings calculator, establish your future goal and choose a monthly amount that’s right for you. Start with as little as $25 per month.

You can even team up with your child to commit to a portion of his or her allowance to UNest. You might even agree to match that amount and in exchange, bump up the allowance per month. That way, it gets your child in the habit of saving a lot and spending less. Ultimately, it’s about teaching responsibility with money, and this could offer a great way to start!


College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.

Ksenia Yudina, CFA, MBA

Founder and CEO

Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

Mike Van Kempen

Chief Operating Officer

Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

Steve Buchanan

Chief Technology Officer

Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

Peter Mansfield

Chief Marketing Officer

Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

Sonya Kidman

Client Relationship Manager

Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

Frank Mastrangelo

Board Member

One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.