At What Age Do Kids Start Paying for Things: 4 Tips to Help Teach Your Kids Financial Responsibility

Should you pay your kids for getting good grades? Should you pay your kids to help with chores around the house? Should you pay your kids an allowance?

These questions often stir debate among parents, as there isn’t one right answer to any of them. But in addition to when you should pay your kids, when should kids start paying for themselves?

Like the other questions, there isn’t one right answer. If your kids receive an allowance, they may have more money available to pay for themselves from an earlier age. If you don’t pay your kids for good grades or chores and they don’t yet have a job, their access to money will be limited, so keep that in mind as you teach them about financial responsibility and begin to have them pay for things on their own.

Here are some simple ways you could start having your kids pay for themselves.

1. Have a long-term payment system

Rather than thinking about a certain age that teenagers should start paying for themselves, you could have a long-term payment system in place from a young age and continue adding expenses as the kids get older.

For example, little kids don’t have as much money, and they aren’t as responsible with it. But starting in elementary school, kids can pay for nonessentials like toys and souvenirs.

By the time your kids get to late elementary school and early middle school, they could start paying for entertainment and certain gifts.

By starting from a young age, by the time your kids are teenagers, they’ll be ready to pay for things like clothing, gifts and school extras.

2. Be willing to negotiate

Some kids have an understanding that once they are able to pay for themselves, they gain independence. In this case, there may not be a definitive line of items that the kids pay for themselves.

Instead, your payment deal may be in the form of needs versus wants. But be willing to negotiate with your kids. If your teenager needs a new winter coat, this is an essential. But maybe you only pay up to $100, and if they want something more expensive, they cover the extra cost.

If your teenager wants to go out with friends, maybe they pay for the activity, but you pay for their transportation to make sure they get home safely.

These negotiations may look different for each family but communicating expectations with your kids will make the transition to paying for themselves easier.

3. Know when to cut the cord

By age 16, your kid is likely helping with chores or may have a part-time job. If they don’t, you may want to start cutting the cord by limiting what you contribute to their gas money or data plan. A 16-year-old won’t be able to pay for everything, but they could make an effort to start earning money.

After high school, if your kid is living at home and not in school, you may need to start charging rent and increasing the amount of household responsibilities. There may be circumstances that make the arrangement necessary, but if it’s not temporary, charging rent will keep them accountable and prepare them for living on their own.

4. Communicate the goal

When you change the way your kids contribute financially, make sure to communicate the goal of your actions. By making your kids financially responsible while they are still in your protection, they learn and practice real-world skills without the risk of being on their own.

If your teenager can’t afford to go out with friends every time, they learn how to prioritize and make decisions for themselves.

The goal is not to be harsh but to prepare your kids to be financially responsible later in life.

All this talk of financial responsibility got you thinking of other ways to prepare your kids? Check out our blogs on allowances and encouraging an entrepreneurial spririt in kids to learn more.