Should I still pay allowance once they have a real job?

Most families either drop the allowance entirely or keep a small symbolic base ($5–$10/week) that signals household participation but isn't structurally important. The honest framing: allowance was the training-wheels phase. Once real income arrives, the training wheels come off. A teen earning $80–$200/week from a real job doesn't need an additional $15 to learn money habits. They're learning them on the job now.

What do I do with their first paystub?

Read it line-by-line, together. Gross pay, federal withholding, state withholding, FICA (Social Security + Medicare). The withholding section will surprise them: "I worked 10 hours at $14/hour, why is the check $116 instead of $140?" That conversation is the most useful single tax lesson of their teen years. The IRS's [Publication 501](https://www.irs.gov/forms-pubs/about-publication-501) covers the dependent-earner rules; bookmark it for the year they file their first return.

Should they open a Roth IRA?

Yes, if they have earned income. A teenager with $2,000 of W-2 income can contribute up to that amount to a Roth IRA. Compound growth over 50 years on $2,000 is roughly $50,000+, and the Roth means no taxes on the gains. This is the highest-leverage financial decision available to a fifteen-year-old. Most families miss it. Don't be one of them.

How should they split a real paycheck?

Higher save rate than allowance. A common split: 60% Save (including any Roth contribution), 25% Spend, 15% Give. The argument is that earned dollars came with effort and should reflect that effort in long-term saving, not just immediate consumption. Frame it as "earned money saves harder." Most teens accept this without much pushback if it's introduced before the first paycheck lands.

What about phone, gas, car insurance: should those come out of earnings?

Phased in, yes. The transition during fifteen-to-sixteen is from "household covers all" to "teen covers some." A reasonable starting point: teen covers their own phone plan ($25/month), starts contributing to gas if they drive, and begins a sinking fund for car insurance. Don't load it all at once; pick one category per quarter so the lesson lands without the system collapsing under it.

★ For parents of teens

How much allowance for a 15-year-old? Allowance meets a real paycheck.

What to pay a 15-year-old as a real job becomes possible: paystub literacy, taxes, and how to keep allowance useful when earnings dwarf it.

Sprout Saver Team · 6 min read

A faceless 15-year-old in a dark blue work apron with earbuds, holding and reading a printed paystub showing line items with clock, bank, percentage, shield, and heart icons. First paycheck literacy.

In this guide

Loading…

★ Key takeaways

$15–$20/week base, and consider dropping it as real income arrives.
Fifteen is the year of the first real paycheck, paystub, and tax line.
Save rate climbs to 60%. Earned dollars save harder than given ones.
Talk about W-2s, Roth IRAs, and tax withholding. Now.

Ready?

Two paychecks deserve one system.

When a real job lands, Sprout Saver becomes the family balance sheet — paystub-decoder lessons, sinking-fund Goals, and a cashout flow for the dollars that need to leave the app.

Get Started Free

How much allowance for a 15-year-old? Allowance meets a real paycheck.

Two paychecks deserve one system.

More to read

Allowance Calculator

Allowance Guide

Allowance for 14-Year-Olds

Allowance for 16-Year-Olds