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When Should I Give Money to My Kids? Tips from a Financial Planner

When Should I Give Money to My Kids? Tips from a Financial Planner

December 05, 2023

Raising children is a financial commitment, but when should you start giving money to your children? Should you give them an allowance or wait for them to become adults? These are common questions that most parents ask when it comes to financial planning.

Giving your children money and managing it properly is just one critical aspect of your overall financial plan. You don’t want to hand them over money without a plan, or, worse yet, completely overcommitting your finances. That’s where working with a financial planner can help – they can provide you with guidance to make an informed decision.

In this post, we’ll explore some insights from a financial planner about when to give money to your kids. We’ll consider the factors affecting the timing and how you can incorporate this into your overall financial management plan.


1: Start with a purpose
Before giving your children money, identifying the purpose for the money is fundamental. Depending on the reason, it could be appropriate to start at any time. Here are some examples to consider:
- Saving for Education
- Incentives for completing chores or academic achievements
- Building financial skills and literacy
- Helping your children to purchase their first car/home
- Allowance for your children to manage

2: Don't confuse gifts with allowances
Most parents who give their children money are unsure of how to start and what will be the best for their kid’s financial future. Parents often fall into the trap of confusing gifts with allowances.
In general, an allowance is the designated amount of money you give your child on a regular basis to cover spending on items like clothes, entertainment, and extra expenses at school. The purpose of an allowance is not to incentivize your children’s chores or academic duties, but rather to provide a regular stream of money growing up to practice their money management skill.

3: Consider Your Finances
Before giving your children money, carefully consider your finances and your ability to support the financial obligation.
You need to consider the impact on your finance if you give your children too much money. Sometimes, even though we have the best intentions for our children, we may put ourselves at financial risk if we don’t plan adequately.

4: Encourage Financial Literacy
The key to helping your kids build solid and valuable financial habits is to teach them how to manage money from a young age. You can start by teaching them how to budget. Show them how to set aside a portion of their allowance for savings and other necessities. Encourage them to start saving early for their education or future goals like buying a car or home. By introducing these habits early on, you’ll give them a solid foundation and understanding of how money works.

5: Invest in their Future
As your children grow, you can also begin to invest in education planning, retirement accounts, and other opportunities to set them up for long-term financial success and stability.


Giving your children money is a sensitive issue. You want to provide for them and help them make the right decisions. However, you need to understand the impact of the decisions you make in your financial planning and be confident in your decision. It’s essential to have open communication and a plan to incorporate this as a critical aspect of your overall financial management plan. By working with a financial planner, you'll ensure that you and your family are making educated and informed decisions to secure your future.