North Dakota State University
NDSU Extension Service

Parenting Pipeline


A newsletter for parents of sixth-grade children from the North Dakota State University Extension Service

Preteens and Money

Children today are increasingly being targeted by business and industry as consumers -- and for good reason. U.S. children age 4 to 12 spend $8.8 billion a year and save $6 billion. Where does this money come from? Almost half (46 percent) of their income comes from allowances, 20 percent from working around the house, 16 percent from their parents as gifts, 10 percent from work they do outside the home and 8 percent as gifts from relatives or friends.

Here's how preteens spend their money:

Preteens also influence their parents' spending to the tune of $132 billion a year on everything from canned pasta to bicycles to athletic shoes.

Preteens are not born with "money sense." Instead, they learn by example and experience. Parents often assume children learn to manage money by osmosis. "Osmosis" is a scientific word but here it describes a more unscientific process, meaning that children automatically pick up these skills just by being around adults. Preteens need to learn by trial and error, and they need your guidance.


An allowance is one way to help your preteen gain experience in handling money. Making decisions about how money should be spent is a step toward becoming more independent. Some parents may think they cannot afford to provide an allowance, but one way to set an appropriate amount is to keep a record of the money given to the child each week for lunches, other school expenses and entertainment. This amount can then be given as the allowance. Discuss this weekly with your child and make adjustments as needed.

While it's not considered a good idea to pay for all household chores, parents may want to pay for "extra" jobs such as washing the car, weeding the garden or washing windows. In the case of hiring these jobs done, the parent can help preteens establish good work standards and work habits (such as arriving on time and cleaning up afterward).

Preteens will make mistakes in their spending, but adults can help them learn from these mistakes. A product which didn't perform as expected can be a learning experience. First, adults can help preteens prevent (or at least minimize) future disappointments by comparison shopping, doing some "product research," reading ads, comparing prices and asking questions. Second, adults can help preteens exercise their consumer rights in the case of a faulty product by arranging to talk to the store manager where the item was purchased or by helping them write a letter to the manufacturer.

As adults help preteens learn about money, they should:

Parents may not feel comfortable teaching preteens to manage money because they feel they're not good managers themselves. But it is not necessary to be an expert to provide appropriate experiences for children.

As with many things children learn, some of the most powerful teaching about money will come from the parents' own example. If money is a touchy subject, if parents always argue about money decisions, children will certainly pick this up.

If parents frequently speak longingly of someone else's house or car or that big TV at the store, children will learn that material things are the most important goals to hope for. If parents practice living on credit, children will assume this is the way money should be handled.

Mature financial habits are basic to harmonious family functioning. Teaching your child about money through experiences with managing money and your own good example of money management will give excellent preparation for his or her own successful life.

This newsletter is published for North Dakota families with sixth-graders by the NDSU Extension Service and distributed through your county extension office. See your extension agent for more parenting information and other home economics programs.

NDSU Extension Service, North Dakota State University of Agriculture and Applied Science, and U.S. Department of Agriculture cooperating. Sharon D. Anderson, Director, Fargo, North Dakota. Distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914. We offer our programs and facilities to all persons regardless of race, color, national origin, religion, sex, disability, age, Vietnam era veterans status, or sexual orientation; and are an equal opportunity employer.

This publication will be made available in alternative format upon request to people with disabilities (701) 231-7881.

North Dakota State University
NDSU Extension Service