Teen Allowance Guide for Ages 12-13: Middle School Money Management

The Middle School Money Reality

Seventh and eighth grade mark a dramatic shift in financial needs and capabilities. Ages 12-13 bring:

• Intense peer pressure and social spending expectations
• Expensive social lives (movies, food, activities with friends)
• Technology demands (smartphones, gaming, social media)
• Personal style preferences and brand consciousness
• Activities and hobbies requiring financial investment
• Early part-time work opportunities (babysitting, lawn care)
• Preparation for high school expenses ahead
• Growing independence from parental oversight

This is the age where allowance transitions from “learning tool” to “real budget responsibility.” The financial decisions they make now will directly impact their high school years and beyond.

Recommended Allowance for Ages 12-13

Financial experts recommend a significant increase for middle schoolers:

$20-40 per week

More specifically:

• 12-year-olds: $20-30 per week
• 13-year-olds: $25-40 per week

Why Such a Wide Range?

Lower end ($20-25/week) when:

• Parents still cover most discretionary expenses
• Limited social activities or extracurriculars
• Younger end of age range
• Smaller community with lower costs

Higher end ($30-40/week) when:

• Teen covers many of their own expenses
• Active social life with frequent outings
• Expensive hobbies or activities
• Urban area with higher costs
• Approaching high school (age 13)

Alternative: Monthly Allowance

Many families switch to monthly at this age:

• $80-160 per month
• Teaches monthly budgeting (like adult paychecks)
• Better for planning larger expenses
• More aligned with real-world money management

What Should Teen Allowance Cover?

The key question: What are they responsible for buying?

Option 1: Moderate Coverage Model

Teen pays for:

• Entertainment (movies, games, apps)
• Snacks and treats
• Hobby supplies
• Non-essential clothing/accessories
• Gifts for friends
• Personal care products they want (beyond basics)
• Phone apps and in-game purchases

Parents still cover:

• Basic clothing
• School supplies and fees
• Required activity fees
• Meals (including school lunch)
• Necessary personal care items
• Transportation

Allowance needed: $20-30/week

Option 2: High Responsibility Model

Teen pays for:

• All entertainment
• All clothing (with parent clothing budget)
• Phone bill (partial or full)
• School lunches
• Personal care items
• Gifts
• Savings goals
• Social activities
• Hobbies and interests

Parents cover:

• Housing, utilities, insurance
• Family groceries
• Medical care
• Required school fees
• Family activities
• Transportation/gas

Allowance needed: $35-50/week or $150-200/month

Budget Categories for Teens

Move to an adult-style budget system:

Monthly Budget Example ($120/month allowance):

• Fixed Expenses: $20 (16%)
  • Phone bill contribution: $15
  • Streaming service: $5
• Social/Entertainment: $30 (25%)
  • Movies, activities with friends
  • Going out to eat
  • Events and games
• Clothing/Personal: $20 (17%)
  • Clothing wants
  • Accessories
  • Personal care
• Short-term Savings: $20 (17%)
  • Shoes, games, items they want soon
• Long-term Savings: $15 (12.5%)
  • Major purchases (laptop, phone, etc.)
• Emergency Fund: $10 (8%)
  • Unexpected needs, lost items, replacements
• Gifts/Giving: $5 (4%)
  • Friend birthday gifts
  • Charity/causes they care about

Total: $120/month ($30/week)

Chores and Responsibilities for Ages 12-13

At this age, contributions should be substantial:

Daily Expectations (unpaid, family member responsibilities)

• Complete self-care independently (hygiene, dressing, etc.)
• Make own breakfast and lunch
• Keep personal space clean
• Manage school responsibilities and homework
• Basic daily chore (load dishwasher, take out trash, etc.)

Weekly Household Contributions

• Full bathroom cleaning (one or more bathrooms)
• Vacuum and mop entire house
• Complete laundry process (wash, dry, fold, put away)
• Kitchen cleaning after family meals
• Yard maintenance (mowing, raking, etc.)
• Pet care (if family has pets)
• Deep cleaning one room

Additional Earning Opportunities ($5-15 each)

• Babysitting siblings for extended periods
• Major cleaning projects (garage, basement, attic)
• Car detailing inside and out
• Painting projects
• Yard work beyond basic maintenance
• Technology support for family
• Organizing/decluttering projects
• Meal preparation for family

Outside Income Opportunities

Encourage earning beyond family:

• Babysitting for neighbors ($10-15/hour)
• Lawn care service ($20-40 per lawn)
• Pet sitting ($15-30 per day)
• Tutoring younger students ($15-20/hour)
• Referee/umpire for youth sports ($15-25/game)
• Mother’s helper ($8-12/hour)
• Social media management for small businesses
• Online selling (crafts, vintage finds, etc.)

Allowance System Structures

System 1: Base + Earning Model

Base allowance: $25/week (guaranteed for budgeting learning)

Additional earnings:

• Extra chores at home: $5-10 each
• Outside work: Keep 100% of earnings
• Bonuses for exceptional help: $5-20

Expenses covered: Entertainment, wants, gifts, some clothing

Benefits:

• Predictable base for budgeting
• Incentive to earn more
• Teaches multiple income streams

System 2: Full Budget Coverage

Monthly allowance: $150

Covers: Almost all discretionary spending including clothing budget, phone bill portion, entertainment, personal care, savings

Chores: Expected as family member (not tied to allowance)

Review: Monthly budget meeting to evaluate spending

Benefits:

• Most realistic to adult finances
• Forces true budgeting skills
• Prepares for high school and college

System 3: Commission + Expense Coverage

No base allowance

Earn for:

• Each household chore: $2-5
• Extra projects: $10-20
• Outside work: Keep earnings

Monthly guaranteed minimum: $80-100 if standard chores completed

Benefits:

• Strong work ethic development
• Direct effort-to-income connection
• Motivation to seek higher-paying opportunities

Teaching Advanced Financial Concepts

1. Banking and Interest

By 12-13, teens should have:

Checking account:

• For regular spending money
• Practice writing checks (becoming rare but still useful)
• Debit card for purchases
• Online banking access
• Understanding of overdrafts (and fees!)

Savings account:

• For short and long-term goals
• Earning interest (explain APY)
• Automatic transfers from checking
• Growth tracking over time

Activity:

• Compare interest rates at different banks
• Calculate how much $1,000 grows at 2% vs 5% over 10 years
• Discuss compound interest concept

2. Credit Card Basics

Not to use yet, but to understand:

• What credit is and how it works
• Interest rates and APR
• Minimum payments trap
• Credit scores and why they matter
• Debt dangers and benefits

Simulation:

• Use a credit card calculator online
• Show: “$1,000 purchase at 18% APR, $25/month payment = 5 years and $500 in interest!”
• Discuss when credit cards are useful (emergencies, rewards) vs. dangerous (impulse purchases)

3. Budgeting Software and Apps

Teens should learn to use:

For chores and allowance:

• Chores and Allowance - EarnUp: Track responsibilities, manage allowance, check balances

For budgeting:

• Mint or YNAB (You Need A Budget) - teen-supervised accounts
• Fidelity Youth Account or Greenlight - teen banking with parent oversight
• Spreadsheets (Google Sheets/Excel) for custom tracking

Skills to develop:

• Categorizing expenses
• Tracking spending in real-time
• Setting up automatic savings
• Analyzing spending patterns
• Adjusting budget based on reality

4. Investing Basics

Age 12-13 is perfect to introduce:

Concepts:

• Stocks, bonds, mutual funds (what they are)
• Stock market basics (how it works)
• Risk vs. reward
• Long-term investing vs. short-term speculation
• Diversification

Hands-on learning:

• Stock market game/simulation
• Custodial investment account (UGMA/UTMA)
• Invest small amounts in stocks they understand (Apple, Nike, companies they use)
• Track investments monthly
• Discuss gains and losses without emotion

Example: “You saved $100. We’ll invest $50 in a low-cost index fund. Let’s track it for a year and see what happens. It might go up or down, but over many years, it usually grows.”

5. Smart Shopping and Consumer Awareness

Teach critical thinking:

Marketing awareness:

• How ads manipulate emotions
• Influencer marketing and sponsorships
• Planned obsolescence
• Brand markup vs. quality

Value assessment:

• Cost per use calculation
• Quality vs. price relationship
• Reading reviews critically
• Warranty and return policies

Comparison shopping:

• Price matching and negotiation
• Online vs. in-store
• Used/refurbished options
• Timing purchases for sales

Activities:

• Research a desired purchase together
• Create a “pros/cons/alternatives” list
• Wait 30 days before major purchases
• Practice negotiating (garage sales, used items)

6. Charitable Giving and Social Responsibility

Expand beyond just “share jar”:

Research causes:

• What organizations align with their values?
• How efficiently do they use donations?
• Local vs. national vs. international impact

Giving strategies:

• Regular monthly donations
• Volunteering time vs. money
• Fundraising for causes
• Peer-to-peer giving (helping friends in need)

Tax concepts:

• Charitable deductions (basic idea)
• How giving affects taxes
• Strategic giving

Handling Teenage Financial Challenges

The Smartphone Question

Almost all 12-13 year olds want or have smartphones.

Cost-sharing options:

Option A: Parent pays, teen has limited plan

• Parent owns phone
• Basic plan only
• Strict usage rules

Option B: Teen contributes to monthly bill

• Teen pays $15-20/month from allowance
• More privileges with payment
• Teaches ongoing expense management

Option C: Teen saves for phone, shares monthly cost

• Save $200-300 toward purchase
• Parents contribute rest
• Split monthly bill 50/50
• Full ownership means full responsibility

Screen time and money connection:

• More screen privileges = more responsibility
• Breaking phone = replacement from savings
• Going over data = paying overage

Peer Pressure and Spending

Middle school is peak social pressure time.

Common scenarios:

“Everyone is going to the movies” ($15-20 per outing)

• Budget response: “Do you have entertainment money left this week?”
• Teaching: Can’t afford every outing; choose favorites
• Alternatives: Host movie night at home

“I need the expensive brand” (clothing, shoes, accessories)

• Budget response: “Basic version is in your clothing budget. Brand premium comes from your money.”
• Teaching: Brand vs. quality; is the logo worth $50 more?
• Compromise: Split the difference on special items

“I’m the only one without…“ (game, subscription, device)

• Budget response: “That’s a savings goal. How many weeks would it take?”
• Teaching: Different families, different priorities
• Reality check: Survey their friends—usually not “everyone”

Impulse Control and Buyer’s Remorse

Teen brains are still developing impulse control.

Strategies:

Mandatory waiting periods:

• Under $20: Wait 48 hours
• $20-50: Wait 1 week
• Over $50: Wait 30 days

Questions before purchase:

• Do I need it or want it?
• Will I use it in 6 months?
• Do I already have something similar?
• Is this the best price?
• What am I giving up to buy this?

Handling buyer’s remorse:

• Natural consequence—money is gone
• Discuss what they learned
• Keep the item as a reminder
• Return policy education

Don’t: Immediately replace or refund poor choices

When They Run Out of Money

This WILL happen. It’s a teaching opportunity.

Responses:

Bad approach:

• Give them more money
• Pay for things they should cover
• Advance next week’s allowance

Good approach:

• Natural consequences: can’t do/buy things without money
• Problem-solving: “What could you do differently next month?”
• Earning opportunities: Offer extra chores/tasks
• Planning: “Let’s look at your budget and see what happened”

Exception: True emergencies (lost wallet, unexpected school fee) might warrant a ONE-TIME loan with clear repayment terms.

Monthly Money Meeting Structure

Transition from weekly to monthly:

45-Minute Monthly Finance Session:

Week 1 of month (Payment Day) - 15 minutes:

• Receive monthly allowance
• Allocate to budget categories
• Review month ahead (known expenses, events)

Week 2 (Mid-month check) - 10 minutes:

• How’s the budget tracking?
• Any adjustments needed?
• Upcoming expenses this week?

Week 3 (Goal review) - 10 minutes:

• Savings goal progress
• Investment/bank account review
• Earnings from outside jobs

Week 4 (Month-end analysis) - 10 minutes:

• Where did the money go?
• What went well?
• What to change next month?
• Set goals for coming month

Total: 45 minutes monthly of quality financial education

Red Flags and Course Corrections

Warning signs:

Constant money stress:

• Allowance may be genuinely too low
• OR spending wildly exceeds income
• Review actual expenses vs. budget

Secretive behavior:

• Hiding purchases
• Lying about spending
• Asking relatives for money behind your back
• Action: Trust conversation, review expectations, potential consequences

Zero savings ever:

• Spending 100% every month
• No progress on goals
• No emergency fund
• Action: Required savings percentage, automate transfers, identify spending leaks

Entitled attitude:

• Expecting parents to cover everything despite allowance
• No appreciation for money
• Wasteful spending
• Action: Natural consequences, more expenses shifted to teen, volunteer work at charity

Over-earning obsession:

• Working so much that school/health suffers
• Missing family time for earning opportunities
• Unhealthy focus on money
• Action: Set work hour limits, discuss balance, evaluate if money anxiety is driving behavior

Success Story

“Our son Jake turned 12 and started middle school. We increased his allowance to $100/month and made him responsible for entertainment, gifts, and clothing wants beyond basics we provide.

The first two months were rough. He spent everything in the first week on a video game and in-game purchases. Then his friend’s birthday came up and he had nothing for a gift. He missed a movie outing because he was broke. It was hard to watch, but we stuck with it.

Month three, something clicked. He created his own budget in a notes app on his phone. He started checking prices before buying. He even researched used game sellers instead of buying new.

Six months in, he’s saved $200 toward a gaming PC he wants ($800 total). He started a dog-walking business in our neighborhood and makes about $40/week, which he keeps separate from his allowance. He contributes $20/month to animal shelter with his earnings.

Last week he told his friend he couldn’t go to an expensive haunted house because it ‘wasn’t in his budget this month.’ I nearly cried with pride.

He’s learning lessons at 12 that many adults still haven’t learned. The allowance system was the best investment we’ve made in his future.”

—Michael T., Virginia

Preparing for High School

By age 13, your teen should be able to:

Manage:

• Monthly budget independently
• Multiple bank accounts
• Debit card responsibly
• Online and in-person purchases
• Short and long-term savings goals
• Income from multiple sources

Understand:

• Interest and compound growth
• Credit and debt basics
• Budgeting and expense tracking
• Smart shopping and consumer awareness
• Banking systems and fees
• Investment fundamentals
• Taxes (basic concept)

Have:

• 3-6 months of experience managing monthly allowance
• Savings account with growing balance
• Checking account and debit card
• History of working toward and achieving financial goals
• Experience with buyer’s remorse and learning from it
• Track record of covering their assigned expenses

Be ready for:

• Higher allowance or first job
• Increased independence and spending
• Driving and car-related expenses (coming soon)
• Social expenses increasing
• College savings discussions
• More complex financial decisions

Alternative Approaches to Consider

The “Bank of Mom and Dad” Account

Instead of cash allowance:

• Parents track teen’s “account” digitally
• Payments and purchases recorded
• Interest paid on savings
• Overdraft fees for going negative
• Teaches banking without needing actual account

Pros: Complete control and oversight Cons: Less real-world experience

The Hybrid Cash/Digital System

• Base allowance digital (tracked in app or bank)
• Bonus earnings in cash
• Large purchases require planning
• Regular expenses on debit card

Pros: Best of both worlds Cons: More complex to manage

The Full Independence Model

• Large monthly/quarterly allowance
• Teen manages almost all discretionary spending
• Parents provide only essentials
• Quarterly review meetings

Pros: Maximum real-world preparation Cons: Requires mature, responsible teen

Tools and Resources

Apps for teens:

• Chores and Allowance - EarnUp: Chore tracking and allowance management
• Greenlight: Teen debit card with parent controls
• FamZoo: Family finance education with virtual bank
• GoHenry: Teen banking app with financial education
• Acorns Early: Investing for families
• BusyKid: Chore and allowance management with investing option

Books for teens:

• “The Motley Fool Investment Guide for Teens”
• “Money Ninja” (for younger end)
• “How to Turn $100 into $1,000,000” by James McKenna
• “The Teenage Guide to Money” by Jonathan Self

Online resources:

• Khan Academy personal finance course
• Practical Money Skills games
• Investopedia stock simulator
• Local bank financial literacy programs

Taking Action

This week:

1. Calculate appropriate allowance for your teen’s age and expenses
2. List what their allowance should cover
3. Have a family meeting to discuss the new system
4. Set up necessary accounts (checking, savings, apps)
5. Create budget together
6. Choose payment schedule (weekly or monthly)
7. Establish check-in routine

This month:

1. Let them manage without interference (unless true emergency)
2. Observe spending patterns
3. Have planned check-ins, not crisis interventions
4. Celebrate good decisions
5. Allow natural consequences
6. Adjust system if major flaws appear

This year:

1. Gradually shift more expenses to their budget
2. Encourage outside earning opportunities
3. Introduce investing basics
4. Prepare for high school independence
5. Celebrate financial milestones
6. Watch them develop life-long money skills

Ages 12-13 are critical years. The allowance system you implement now will shape their financial future. Start strong, stay consistent, and watch them grow into financially responsible young adults.