One of the best ways of preparing children for the future is to expose them to real-world experiences. Teaching children money management skills through allowance is one way to provide a real-world, hands-on learning experience.

What is an Allowance?

According to the Britannica dictionary, an allowance is “a small amount of money that is regularly given to children by their parents.”1

While many people may assume that allowance is just money that children are given to use at their discretion, it can also be used as a valuable tool to teach children a lot of important life lessons. Money needs management, so the lessons should include budgeting, prioritizing wants versus needs, banking, and saving, among other things. Starting early with the skill is critical for instilling a strong financial foundation in your child.

Math and Finances

Many children may not like math as a discipline of study. After all, many children may not understand the importance of learning calculus or calculating the area of a rectangle in math. However, as opposed to this idea, math is used in almost every area of your life.2 For example, calculating the area of a rectangle might be useful to know when you are filling a portion of your garden patch with compost. 

So from basic addition and subtraction to more advanced formulas and calculations, math is extremely essential. It is especially true when it comes to finances and money management. Every financial transaction uses some math in its application.2 For example, even if you are only purchasing basic groceries, you will need to know addition and subtraction to cross-check your bill and percentages to calculate your tip at a restaurant. Complex equations involving fractions, interests, etc., may be required when dealing with mortgages, loans, investments, and so on.2  

Therefore, teaching children about money and financial responsibility is essential in preparing them to be financially independent, successful, and responsible in adulthood.3 Using allowance as a tool to teach children math can be one of the best ways to teach them money management and multiple math concepts.

Teaching Math with Allowance4

Giving children an allowance is a common and simple way to help them learn money management skills, depending on their age. Giving your child an allowance can present ample opportunities to practice their math skills along with other essential skills such as independence, personal responsibility, consequences of spending, savings, and more. 

  1. Start with the Basics

You can teach your child basic math skills such as addition, subtraction, multiplication, and so on from an early age using allowance as the tool.

For example, if your child wants to buy some cool school supplies and a bar of chocolate while you are giving them five dollars a week as an allowance. You can teach them to save their allowance every week in order to save up the required amount of money for their supplies and treats.

Ask them questions to get them working on their math skills, such as:

  • How much would you need for your supplies? And how much do you need for your chocolate bar?
  • How much is the sum total of both? 
  • How much money do you have to save to buy both if five dollars a week is your allowance? 
  • How many weeks do you need to save that amount to reach this goal? 

This is a great exercise to teach them basic math skills along with logical thinking, planning, and organizing skills.

  1. Divisions and Fractions5

By using allowance as a tool, you can encourage both saving and charitable behavior in children. You can do this by teaching them to divide their allowance into categories based on their preferences, such as spending, savings, and donating.

From the above example, if your child gets an allowance of five dollars a week, you can ask them questions such as:

  • How much would you need to add to each part of your allowance?
  • How much do you need to save?
  • How much would you want to keep aside for charity? And how much does that leave you with for spending?
  • How much would the division of your allowance be if you had to put it into 3 equal parts? -If your child has to divide their allowance into equal parts.

This activity can be used to teach fractions and division. You can even include rules about the rewards they’ll receive if they do their math correctly. For example, you could give them extra brownie points if they get their math right.

  1. Percentage5

For a better understanding of more complex math concepts, consider an uneven distribution of their allowance. For example, you could mandate that they divide their allowance into 30% for spending, 30% for donating, and 40% for saving.

You could also encourage your child to further divide their savings into different goals, as shown in the example under the first point.

  1. Interest

Once your child has mastered the art of saving, show them how to keep track of their funds and put them to good use. Once they have a basic understanding of percentages, you can teach them how to deposit funds from their allowance into real bank accounts and learn about the interest rates offered by banks.

  1. Formulas and Equations

Children will always want something they can’t afford with their allowance or savings. Situations like this can be used to teach them the importance of money and how much they need to save before they reach their goal because if the goal is higher, they will need to use formulas, equations, or even word problems to arrive at their solution.

You can also ask them to calculate the duration of time that they would need to save in order to achieve their goal.

If your child is not willing to wait to save up the money, you could consider giving them a loan with a particular interest. Ask them to plan their payment and see how the interest is calculated so they can figure out if they can pay the total interest on the loan or not.

These are just some of the simple ways in which you can incorporate math lessons into their allowance. However, with a little bit of creativity, the options for teaching children math using allowance can be endless. Older children can be taught about margins, gross margins, return on investment, net sales, stock to sales ratios, compound interest, break-even analysis, averages, et cetera.

It will help your children practice their skills, become savvy with math concepts, and also manage their own money.

There are a variety of tools and strategies you can use to teach your children math. Visit our blog to read more interesting articles on math learning.


  1. Allowance Definition & Meaning | Britannica Dictionary. (n.d.). Retrieved April 27, 2022, from
  2. What Kind of Math Should I Learn for Owning My Own Business? (n.d.). Retrieved April 28, 2022, from
  3. Starting early: How to use allowance as financial education | Union Bank & Trust. (n.d.). Retrieved April 28, 2022, from
  4. Allowance and Money Management – Definition, Purpose, Description. (n.d.). Retrieved April 28, 2022, from
  5. The Arithmetic of Allowance | Math for Grownups. (n.d.). Retrieved April 28, 2022, from