No Risk Way To Teach Your Teenager About Money

The decision to use an allowance with our teenager was a really good one and it quickly removed all the tension we were having.

There were a few rules, but not many, it was a simple, no risk strategy really. I was already spending money, this was going to reduce my spending!

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I had to put my young teenager on an allowance because they had no idea about money and didn’t understand how much money everything they wanted cost.  She loved to buy new things but was never aware of what she was actually spending. The allowance changed everything, and here’s how I did it. 

She would ask for things, and every time I would instantly feel the tension. We disagreed about whether she really needed new clothes or shoes.  To me she had plenty already, in fact, I often needed clothes more than she did. She would nag ask, I would give in say yes, and then get annoyed at myself later, and I just became increasingly resentful. 

The allowance was worked out in advance between us which meant no more negotiations in the heat of the moment. We also pre-determined how much money they would get each season and what they could expect to get from me in one lump sum before shopping. 

The bottom line was when the money was gone, it was gone. End of story! No more.

There were extra benefits to this system than I realised in the beginning. 

We made a plan for the year created a strategy we could both follow.  It kept their wardrobe updated without going overboard, and meant I wasn’t spending unnecessarily, while at the same time he learnt the value of a dollar and what things are really worth.

I understood that my job as a parent was to teach them the following;

  • How to manage their money well
  • To take care of what they owned
  • Learn to save for things they couldn’t afford right now
  • Not to buy things they couldn’t afford

I have used this allowance method with all 3 of my kids, 2 of them needed it, there was one who didn’t.  I have had different iterations of this system over the years, but this is the basic set up.


Essentials for school, sports activities, and health, such as wet weather jacket, hat and undergarments. These aren’t optional and must be purchased before everything else. If they don’t wear a uniform, you still needed to provide sensible and tidy clothing.


We, the parents decided how much we wanted to give them annually, and then discussed it with our teenager to make sure they were in agreement.  Ultimately, its what you can afford without limiting what we needed for life and living and what we could spend equally on our other children. 

As a side note; we always made it an option for them to add their own money to purchase a more expensive item if they ever wanted to.

The amount we would provide per year was divided by how often they went shopping throughout the year.  Usually, it was seasonal, the summer and winter seasons. Sometimes, it was 4x a year, at the beginning of each season. 


Before hitting the shops, we often sorted their existing clothing to determine what they needed. They gathered all their clothing out of their drawers, closet, hangers etc.  And each item was either kept, rubbish or given away. If they fussed about sorting their clothes, then we didn’t shop, simple.  

When we both knew what they had in their wardrobe, better decisions were made about what they needed.  Until they were shopping by themselves they needed input and feedback.


I’m going to show you exactly how to set up your young person for success with an allowance. We start with clothing because it is often what they spend the most excessive amount of money on other than junk food and entertainment.  

There are always ground rules that have to be agreed upon for an allowance to work long term.  The whole point of an allowance is to teach the young person how to manage their spending and be responsible for their own expenses. 

Gradually, you as the parent will be out of a job. That’s the goal!Q


  1. What they are responsible for purchasing?
  2. How much per year, per term, per semester?
  3. How the money will be given/paid to the young person?
  4. How will they keep track of their spending and allow you oversight as they go?
  5. What will happen if they overspend and haven’t purchased items they need?


First of all, there are ESSENTIAL items for your child’s health, school, and sports activities that have to be purchased.   

  • School clothing/uniform
  • Sports uniforms
  • School shoes
  • Underwear and socks
  • Pyjamas
  • A waterproof/wet weather jacket, hat & gloves

Then there are the GENERAL PURPOSE ITEMS. These are items they purchase for everyday casual wear.  Not all of these items are needed every season and lots of items (when looked after) last multiple seasons if they are not outgrown. I have created a list of items for you and your teen to choose from that can be purchased with their allowance.  Remember, these aren’t essential to survival because they have clothing for school, sports and bad weather.  This is casual wear for fun and relaxation, don’t assume they NEED all of it.

  • Tops & T-shirts ( 6-7) A shirt for every day of the week.
  • Cardigans / Jerseys (2-3)
  • Casual shoes (2 pairs)  One super casual, and always a tidy pair for social events
  • Fashion Jacket (1?) these aren’t essential but can replace one of the Cardigan / Jersey options
  • Jeans / Pants and Shorts (5-6 items)
  • Dresses & Skirts (2-3) Girls can purchase these instead of shorts.

It is important to note here that your child does not NEED all of these things.  What they choose to buy with the money they are given is entirely up to them and will ultimately be what causes them to learn and make better choices next time. They only require clothing to be warm and comfortable in the season that you’re in.


Until they have proven themselves at least a little trustworthy of managing their money, I would suggest that you agree on how much money they need for their school and sports and other general items, and have them shop for these first. Decide a realistic amount you will need for each item and go from there. You can’t afford for them NOT to have these items if they overspend in their allowance, so they come first.  

Not until all of this is calculated/purchased can you decide on an amount you think is reasonable for them to spend on clothing for fun and relaxation. If they do not need to wear a uniform for school, then you still have to provide sensible and tidy clothing, not special, perfect, or top-of-the-line items, but presentable and comfortable for them to do their work.


Essential Items with approximate prices

  • Underwear (7-8 pair) Varies between male & female  > $100
  • Socks (7-8 pair) > $50
  • Pyjamas (2 pairs) > $40
  • A waterproof/wet weather jacket > $80
  • Hat & gloves > $30


General Wardrobe Items with approximate prices

  • Tops/T-Shirts (6-7) > $20 each > $150
  • Cardigans / Jerseys (2-3) > $25 each > $75
  • Casual shoes (2 pairs)  One super casual, and always a tidy pair for social events > $50 each >$100
  • Fashion Jacket (1?) Not essential but can replace a Cardigan/Jersey option > $75
  • Jeans / Pants and Shorts (5-6) > $30 each > $180
  • Dresses & Skirts (2-3) Girls can purchase these instead of shorts > $40 each > $120



I have been ruthless over the years and happily reduced this amount to make the kids work for what they want.  Often giving them half this amount so that they learn to shop on the sales or buy pre-loved.  They also look after the clothes they have because there is no more money coming.  Don’t be afraid to put some limits on this, only give them what you can afford, and they will learn to manage.  


I guestimate what things will cost, some will be on sale, others will cost a little more.  But now I can plan for this amount and budget accordingly. Once I have an annual amount I divide it up according to how often the individual prefers to shop.  Either twice a year at the start of summer and winter or 4x a year, at the beginning of each quarter.

Each person in the family has a set amount for the year, they are given a portion of that amount when they need it, and when it’s gone, it’s gone.

Hopefully, they purchased everything they needed.

What they purchase each time they shop depends on what they need at the time. I have written a complete article on how to determine what they really need for clothing in HOW TO ASSESS THE WARDROBE BEFORE YOU SHOP.  Help them be sure about what they need, then they can determine what each of these things might cost to buy and if they have enough.


We took cash which made it easier to keep track of what was left to spend. Expecting them to keep receipts so that you can return things or keep track of spending is good accountability, either file the receipt, take a photo of it, write it in your diary or put a note on your phone.  I had to do this because we would often forget what has been spent, and that was really annoying! 

It is always going to come down to the trust you have in them and their honesty with you.  They can always trick you if they really want to.  Asking for receipts, checking bank transactions or balances are precautions you can try.  In general, you will know if they are being wise by what they show you after shopping or the clothing they wear afterwards.  


Depending on what it is, a jacket to stay dry?  Maybe they will have to make do with an umbrella this season?

If it is a sports uniform, then you as their parent will have to provide it and it will come off their allowance next time.  You don’t have to rant and rave, the punishment is having less to spend next time.  It’s pretty simple.