How Much Money Should a 13-Year-Old Have? It’s More Complicated Than You Think

The short answer? There’s no magic number. The “right” amount of money for a 13-year-old to have varies dramatically based on a myriad of factors, including family income, local cost of living, parental values surrounding money, and the teenager’s individual spending habits and responsibilities. Instead of focusing on a specific dollar amount, the key is to equip them with financial literacy and sound money management skills, regardless of how much they actually possess.

Factors Influencing How Much Money a 13-Year-Old Needs

Several key factors influence the appropriate amount of money for a 13-year-old:

• Family Income: A teenager from a high-income household might have more discretionary spending money than one from a lower-income household. This is simply a reflection of overall family resources.
• Cost of Living: The expenses in a bustling metropolis will differ significantly from those in a rural community. A teenager in New York City, for example, might need more money for transportation and activities than someone living in a small town.
• Responsibilities: Does the teen contribute to household chores in exchange for allowance? Are they expected to cover certain expenses, like entertainment or clothing? These responsibilities will directly impact the amount of money they need.
• Allowance vs. Earned Income: Does the teen receive a regular allowance, earn money through chores or part-time jobs, or a combination of both? Earned income often requires a different level of financial responsibility.
• Financial Goals: Is the teen saving for a specific goal, like a new phone, a gaming console, or even future education? Having savings goals influences how much money they should ideally have and how much they should save.
• Parental Philosophy: Some parents believe in providing everything their children need, while others emphasize financial independence and earning their own money. This philosophy significantly shapes the amount of money a 13-year-old has access to.

Focusing on Financial Literacy Over Specific Amounts

Instead of stressing over the “right” amount of money, prioritize teaching essential financial literacy skills. This includes:

• Budgeting: Help your teen create a simple budget to track income and expenses.
• Saving: Encourage them to set savings goals and develop a plan to achieve them. Discuss the power of compound interest, even with small amounts.
• Spending Wisely: Teach them to differentiate between needs and wants, and to make informed purchasing decisions. This can include comparison shopping and avoiding impulse buys.
• Understanding Debt: Explain the concept of debt and the potential consequences of overspending, even on small purchases.
• Investing Basics: Introduce basic investment concepts, such as stocks, bonds, and mutual funds. Even a small amount of money invested early can make a big difference over time.
• Responsible Use of Technology: Address the financial implications of online shopping, in-app purchases, and subscriptions.

Examples of Money Management at 13

Here are a few examples of how a 13-year-old might manage their money, depending on their circumstances:

• Scenario 1 (Allowance + Chores): Receives a $20 weekly allowance for completing household chores. Budgets $5 for snacks, $5 for entertainment, and saves $10 towards a new video game.
• Scenario 2 (Part-Time Job): Earns $50 per week from babysitting. Uses $20 for personal expenses, saves $20 for a future purchase, and gives $10 to a charity.
• Scenario 3 (Gift Money): Receives $100 for their birthday. Decides to put $50 into a savings account and uses the remaining $50 for a desired item.
• Scenario 4 (Minimal Income): Receives no allowance but earns small amounts by completing odd jobs. Prioritizes saving for necessities over wants.

Frequently Asked Questions (FAQs)

Here are 12 frequently asked questions designed to give parents and teenagers even more clarity on this important topic.

1. What’s a reasonable allowance for a 13-year-old?

There’s no one-size-fits-all answer. Many experts suggest a dollar per year of age per week, which would be $13. However, the amount should be tied to expectations. Is the allowance simply given, or is it tied to chores and responsibilities? Adjust the amount based on what the teen is expected to contribute. Consider researching average allowance amounts in your area.

2. Should allowance be tied to chores?

That’s a personal decision. Some parents believe in unconditional allowance as a means of teaching money management, while others tie it to specific tasks. Tying allowance to chores can instill a sense of responsibility and teach the value of earning money. Consider a hybrid approach: a base allowance for general responsibility and extra pay for additional chores.

3. How can I help my teen create a budget?

Start simple. Use a notebook, spreadsheet, or budgeting app. Track income (allowance, earned money, gifts) and expenses (snacks, entertainment, clothing). Help them categorize spending and identify areas where they can save. Review the budget together regularly and adjust as needed.

4. What are some safe ways for a 13-year-old to earn money?

Safe options include babysitting (with certification if possible), pet sitting, lawn mowing, shoveling snow, tutoring younger students, or helping neighbors with errands. Online opportunities should be carefully vetted to ensure safety and legitimacy. Look for age-appropriate freelance tasks that match their skills.

5. How can I teach my teen about saving?

Start by setting clear saving goals. Is it for a new phone, a gaming system, or a future car? Help them calculate how much they need to save each week or month to reach their goal. Open a savings account and explain the concept of interest. Consider matching their savings to incentivize them.

6. How do I discuss investing with my 13-year-old?

Introduce the concept of investing in a simple and age-appropriate way. Explain that investing is buying a small piece of a company and that the value of that piece can go up or down. Consider using a custodial investment account where you can guide their investment decisions. Start with small amounts and focus on long-term investing.

7. What should I do if my teen overspends or runs out of money?

Avoid bailing them out every time. This is a valuable learning opportunity. Help them analyze their spending habits and identify where they went wrong. Discuss strategies for avoiding overspending in the future. Consider a temporary suspension of allowance if the overspending was irresponsible.

8. How can I prevent my teen from developing bad spending habits?

Model good spending habits yourself. Talk openly about your own financial decisions and challenges. Teach them the difference between needs and wants. Encourage them to delay gratification and avoid impulse purchases. Discuss the dangers of advertising and marketing.

9. Should I monitor my teen’s online spending?

Yes, especially when they are first getting started with online transactions. Review their purchase history and discuss any questionable spending habits. Teach them about online safety and security, including password protection and avoiding phishing scams. Explain the risks of in-app purchases and subscriptions.

10. How do I talk to my teen about money if we’re struggling financially?

Be honest and open, but avoid overwhelming them with financial stress. Explain that the family is working together to manage expenses and that everyone can contribute by making smart choices. Involve them in age-appropriate budgeting decisions. Focus on what you can control, like reducing expenses and finding creative solutions.

11. What are some good resources for teaching financial literacy to teens?

Numerous online resources are available, including websites like the Jump$tart Coalition, Practical Money Skills, and Khan Academy. Many banks and credit unions offer free financial literacy programs for teens. Consider using personal finance books and games designed for this age group.

12. At what age should a teen get their own bank account?

13 is a perfectly reasonable age to open a bank account, often a joint account with a parent or guardian. This allows them to learn about banking, manage their own money, and build a positive financial history. Look for accounts with low or no fees and features like online banking and mobile apps. This is a great way to start building credit history and financial responsibility.

Ultimately, empowering a 13-year-old to manage their finances isn’t about a specific dollar amount; it’s about providing them with the knowledge, skills, and confidence to make sound financial decisions throughout their lives. The “right” amount is whatever amount facilitates this crucial learning process.