Allowance contract: a pocket money agreement template for kids

A pocket money agreement, or allowance contract, puts on paper what you and your child agreed about money: how much, when, how it is paid, what your child pays for and how long the deal runs. The Dutch family budget institute Nibud recommends writing agreements down, for example in a pocket money contract you sign together (Nibud).

Below you will find what to include, a template you can copy, filled-in examples for ages 7, 10 and 13, and what to do when the deal is broken.

Why write a pocket money agreement?

Most pocket money arguments come from fuzzy memories. "You said you would pay for my football stickers." "I never said that." A written agreement settles those questions before they start.

It also does 3 useful things for your child:

• It makes the rules visible. Your child knows exactly what the money covers and what it does not.
• It hands over responsibility. Once your child agrees to pay for something, the choice and its consequences are theirs.
• It shows that money decisions are discussed. Children learn that adults plan money too.

The idea is the same as a family media agreement: in Germany, the Mediennutzungsvertrag from klicksafe and Internet-ABC lets parents and children write their screen rules together and sign them (Mediennutzungsvertrag). A pocket money agreement applies the same approach to money.

What should an allowance contract include?

Nibud lists 4 points: how long the contract runs, the amount, when and how you pay, and what your child pays for themselves. Add optional clauses as your child grows.

Copy this template and fill in the right-hand column together:

Keep the wording short enough for your child to read alone. For children who cannot read yet, draw a small picture for each line. For the extra paid jobs line, our article on whether kids should be paid for chores helps you decide which jobs count.

How do you agree on it with your child?

Treat it as a conversation where both sides have a say. A family meeting is a good setting; our guide to family meetings shows how to run one.

1. Explain the purpose. "This is our deal about your pocket money, so we both remember it the same way."
2. Start with what the money covers. Agree on the spending list first, then choose an amount that fits it.
3. Let your child propose. Children often suggest sensible clauses, such as saving part each week.
4. Read it aloud together. Check that every line means the same thing to both of you.
5. Sign and display it. On the fridge, in a folder or as a photo on your phone.

The German youth institute DJI stresses that children should receive a small sum at regular intervals, unprompted and independent of their behaviour, and that they should be free to decide how to use it (DJI). A contract supports that freedom: once the rules are agreed, you do not need to comment on every purchase.

What does a filled-in contract look like at 7, 10 and 13?

These are examples, with amounts in euros taken from the Nibud ranges for the Netherlands (about €1.40 to €2.30 a week at 7, €2.30 to €2.80 a week at 10, and €20 to €25 a month at 13). Use your own country's guidance (the pocket money calculator shows the published figure by age and country) and your family budget; our pocket money basics guide explains how to choose.

For example, a family with a 7 and a 13 year old could use the same template for both, with a picture version for the younger child. The 7 year old practises counting coins with the count your pocket money quest; the 13 year old manages a monthly budget and starts tracking spending in a notebook. For the saving line, our guide on how to teach kids to save money gives example splits by age.

When should you review it?

Put a review date in the contract and keep it. Good moments:

• Every 6 months, or at the start of each school year.
• At a birthday, when the amount often goes up.
• When responsibilities change, for example when your teen starts paying for their own clothes (see our guide to the teen allowance and clothing budget). Nibud notes that many 12 and 13 year olds already feel responsible for a clothing budget. Our guide to chores for teens covers the other side of growing independence.
• When the deal clearly does not work, for example if the money always runs out on day 2.

At each review, ask your child what worked, what was hard and what they would change. Then sign a new version.

What if the contract is broken?

It will happen, on both sides. Handle it calmly and stick to what you wrote.

If your child breaks it (spends the savings share, asks for an advance that is not allowed):

1. Point to the clause without a lecture.
2. Let the natural consequence happen: if the money is gone, it is gone until pay day.
3. Talk about it at the next review if it keeps happening.

If you break it (forget pay day, pay less): pay it as soon as you notice and say sorry. Being reliable is part of the lesson, and DJI's emphasis on regular payment applies to adults first.

Avoid using pocket money as a punishment for unrelated behaviour. Mixing them turns a money lesson into a behaviour tool and blurs both.

Kidventures keeps the behaviour side separate: kids earn stars for quests and spend them on rewards you set together, while their pocket money deal stays on paper. Browse the chore library for money quests by age, or pick reward ideas from our rewards ideas page.