Friday, January 20, 2012

Kids and allowance

From time to time I get asked about if we give our kids allowance money, or how we go about it. To be honest, this is an area that I myself often wonder what the best approach is. 

For starters, I do not think our kids should ever be given "free money" on a regular basis (i.e. outside a birthday gift or something similar). 

But on the other hand, I also realize that kids' earning power and opportunities are limited to non-existent, while they need to learn how to handle money correctly from a young age. And it would get very tiresome to constantly have them asking me for stuff they want, because they have no money of their own to spend. 

Some families have a system of paying children for each small task, chore, or job they do. For example, a child might earn a nickel or dime each time they make their bed, brush their teeth, feed the dog, unload the dishwasher, etc. I can see the benefit in this type of system, but there is a definite downside in my opinion: this would be really hard to keep track of day-in, day-out, especially if there are multiple children and busy days. I cannot even remember to jot down everything onto my grocery list as needs arise, so I am sure that having to record each small earning for each child would fail because of my being busy and preoccupied.

A variation of this would be that children do NOT earn anything for doing their normal, fair share of the daily household tasks, or for taking care of their own responsibilities like grooming and maintaining their room. These tasks are all considered their fair share of helping the family. They only earn money for doing extra chores, and going above and beyond their normal fair share. The problem for our family with this approach would be that we divide all the work between all the family members who are old enough to help, leaving very few extra chores that would provide an opportunity to earn extra money. Since my main goal in providing children with an income is to provide opportunities to teach about saving up, giving back to God, investing, price comparisons, needs vs. wants, etc. having only very limited funds would greatly limit learning opportunities.

Also, just because we all are a family, and as such should expect to all pitch in and share the burden, I do feel that should be rewarded with some financial freedoms. For example, while I do not earn any money, and "only" fulfill my daily obligations as a mother, I still want to have the freedom to pick up a book I see and like, or stop for a treat at a coffee shop, or otherwise splurge on a whim from time to time.

Which led to our family adopting what is probably the most common approach: a regular, weekly allowance, without keeping track of who did what, when, for how long or how often. We typically start around age 5 or 6, depending on the child's maturity. As for the amount, we pay half their age in dollars each week (i.e. Solomon $5, Isaac $4, etc.). To some, this amount is very large, while many books and other sources I have read suggest as much as twice that amount. I guess it really would depend on what children are expected to cover themselves with this money. Personally, I think it is plenty of money.

Our kids are supposed to use this money for all their "wants", as well as for gift-giving etc., while we will cover their "needs". So while I will pay for their food, I do not feel obligated to pay for any books, toys, treats, outings, etc. outside their birthdays or Christmas. If we go to the zoo and they want to ride an elephant, they can do so if they have the money to pay for it themselves. Our family currently only has a zoo membership, if the kids wish to go ice skating, or to a theme park, or another fun outing, they must pay for it themselves (the only exception to this is if we are on a family vacation). If they see a cool shirt at the store, but I have no intention of buying it because they have plenty and don't need another one, they can use their own money. Same is true with buying food for their pet hamster that they wanted to have, buying inner tubes for their bikes when they bust them every month by riding off-road, etc. 

I will say that some weeks, especially in the beginning, there was a temptation not to pay allowance because maybe we didn't have cash on hand, or the week had passed so quickly and it seemed too soon to have to pay allowance again, etc. But I think for this system to work right, and for the kids to learn financial responsibility, they must be able to trust the fact that they will get paid reliably, even if it is just a small amount. 

Some rules we have made are:

- Before spending any money, you must first set aside your tithe (10% giving at church).

- No advances, ever, for any reason: Debt is a curse, even when you are a child. Besides, spending your last cent is always a foolish decision, and feeling the disappointment of not being able to buy something because the money has been lightly spent on something lesser drives this point home. It is always good to save some money for an unforeseen need.

- You must have your wallet in hand in order to get paid: This is to teach the younger crowd that this is cash, and should not be carelessly lost. If you lose track of your wallet, you will not receive any more money until you can produce it again.

- We parents retain veto power: Just because you may have the money to buy a ginormous building set, does not mean we are willing to buy a bigger house just to accommodate it (and a million other toys). Just because you have the money to buy candy or other junk food, does not mean I will let you - after all, we are the ones having to pay dentist and doctor bills.

This system has worked well for us, because the kids understand that they are getting paid in exchange for helping with the daily chores and responsibilities. Each of them has a very specific list of duties they are to take care of each day, as well as help with the weekly cleaning. Some of the things the kids help with are: laundry (everything from sorting to putting away), emptying the dishwasher, sweeping floors, dressing and helping younger siblings, cleaning rooms as needs arise throughout the day, all animal duties (we have a hamster, dogs, and chickens), cleaning bathrooms, making beds for parents and youngest siblings, help with food prep and cooking, taking out trash and recyclables, cleaning the van, carrying in groceries and putting them away, holding/watching the baby, etc.

One other thing I have recently started doing to further drive home the point that allowance is not "free money", but rather a compensation for the daily chores, is to put the kids' weekly allowances in small jars on the kitchen counter with their names on them on Saturday afternoon, after paying out for the past week. During the week, if the kids are remiss on a chore, go off to play when given a job, "forget" to brush their teeth, take an hour to finish lunch while the other kids are on to their after-mealtime chores, etc. I take a quarter out of their allowance jar, meaning they will not get their full amount on the coming Saturday. Losing money for a few infractions has been a lot easier to keep track of than paying for every little thing done correctly. Having money taken away also seems to get the point across better (because it is so visual) than to start out with $0 and build up any amount.

So that's what we do. Not a perfect system for sure, but it has been working well for us for several years now. When we first started giving the kids an allowance, they were not nearly as responsible and wise with it as they are now, so it is definitely working. For example, the kids are always looking for things to buy inexpensively at the thrift store, such as a bike. They then clean it up, fix inner tubes if needed, and sell it on craigslist at a profit. Over time, they have learned which items are easy to turn around and sell at a profit. At their age, I spent all my weekly allowance on candy machines, so they are definitely light-years ahead of me (and yet, I grew up to be a tightwad financially savvy).

What does your family do to teach your children financial responsibility? Please feel free to share your suggestions in the comments below.


  1. I liked reading your ideas on this.:)We currently have been paying each of our children for not having cavities.Each time they go to the dentist with a clean slate they are paid $10.00.It may sound crazy but it has worked well for us and is alot cheaper then paying for fillings.We do not pay an allowance(not because we do not think it is a good idea)but it just does not happen right now.On the other hand I am happy to pick up a cheap toy at the thrift store if it is something I know my little ones would appreciate or to add to a current collection they have.Of course any extra money they make is theirs.My nine year old chopse to buy chickens with his birthday money so any "egg money"is his.My oldest daughter often will make a quilt to sell if she wants to earn money.She has bought numerous things this way.An American girl doll,an American girl carriage and a new dress.:)I think it is great when children learn early on to save for things that are important to them.:)Thanks for sharing and hope you are feeling well today.

  2. Like you, I had trouble keeping track of every little chore my kids did; especially since these "chores" were supposed to be part of their daily routine i.e. making beds, hanging up towels after bath, putting clothes in the hamper, doing laundry, feeding pets. We considered those things just part of being a family and pitching in to help the household run smoothly. Also, those daily "chores" would hopefully become habits and our kids would have a smooth start when they left home.
    We kind of looked at allowance as a budgeting lesson. We taught them to set aside some for church giving, some for savings, and some for spending.
    When they reached the teenage years, especially as they started driving, I increased their allowance. But that increase meant they had to pay for their own ballgame admissions, concession treats, extra snacks. If they wanted to have a sleepover, they had to chip in to cover food and drinks for all the guests.
    We did not suspend the allowance when they got jobs because I kind of felt like that was punishing them for working outside the home and having the diligence and work ethic to do so.
    Basically, it sounds like we handled the allowance thing like you have.

  3. A couple of things that we do, are we only pay about a 1.00 per week, as part of their weekly allowance, and then they have the oppurtunity to earn extra through extra jobs, or lose if they have not behaved or done their chores properly. We also decided to not pay them every week. Not because we didn't have the money, we just don't always have the right amount of cash to give them. So they each have a "check" register that I keep. Every week they earn money, we write it down in their register, and go ahead and divide it up, 10% tithe, 10% savings, and 80% spending money. At the end of the month, I give them their tithe to give at church, and if they want it at that time, I go ahead and give them their spending money. They have to use their spending money for their wants as well. This way they are able to save for future expenses, such as a car or even a home. We will probably increase the amount for my 10 year and up. We also have them enter their money that they get from gifts into their register.


  4. We stopped paying them allowance because it's so hard to keep track of. But if they have been doing their chores every day we make sure to keep a list of who's been given a reward last. We do something special with just that one kid every now and then and take turns. :)

  5. I think one reason the allowance was easy for me to remember was that I am a "cash only" kind of gal. My husband gets paid every two weeks and I go to the bank and get out "my" money for that time period. It was always easy to build in the kids' allowance on those bank visits.
    I can't remember if we gave them the money every week or every other week when they were little (hmmmm....I guess I AM getting old) but as they got older, it was every two weeks.

  6. My parents handled pocket money pretty much exactly how you do. My husband, on the other hand, never recieved regular pocket money and dosent like the idea of 'something for nothing', even though I know it's not nothing, but I get where he's coming from.

    Our daughter is too young to implement it, but our idea is twofold, firstly we want to make a note of, and set aside more unusual jobs, things that aren't in the daily chores. For me this may include cleaning the bathroom properly, mopping the floors (both monthly jobs at best in my parents home) or cleaning the car, helping with the yearly clothes switch out, doing some busywork like photocopying for schoolwork preperation, that sort of thing. We would pay a decent amount for these sorts of jobs. (I imagine us having an ongoing list on the fridge of jobs that the kids can 'apply' for, and obviously they would have to meet qualifications, like capability with cleaning chemicals, or, in the case of jobs that younger kids can do, being under the correct age. Like newspaper ads! I see this being used as a learning tool etc. Of course, it may end up nothing like that by the time it happens lol) The advantage of this system is that around the times the kids want more money for things like gifts, for example christmas or blocks of birthdays, there is more odd jobs to do, like the special cleanups before christmas and the toy clearouts and the table setting ironging and all of that stuff. We would probably also give a 'christmas bonus'.

    A offshoot of that is, if applicable, doing work for dad gets paid. My dad ran his own business carpet cleaning, and when he had a big job he would take one of us to do the spraying, or when he worked on blinds he had me come in to do the cutting. We got paid properly for that. My husband used to get paid to clean out his dads workshop for his engineering business.

    But the second thing is, when I was a kid, like you, pocket money went on lollies and chocolates, maybe occasionally a piece of clothing. I want to teach the kids to look for opportunities to make money, by making and selling, or repairing and selling, or services or whatever. I want them to look for opportunities and make them for themselves, not just wait for them to be on a bit of paper.

    Have you heard about these people that give their children a large amount of money each week (I don't know what an equivilant figure might be in America, but basically what you as a parent would spent on them in that time, total.) but then they are expected to pay for all their wants AND needs with it, except food? So, clothing, including underwear. School supplies, school excursion entrance fees, time out with friends, food out. It's really a system more suited to school students who would have things like lunches and backpacks and sports events and thing to pay for, I can't see it working for us. But for an older child, giving them their own clothing budget dosen't seem like a bad idea! If they go and buy a brand name shirt full price, then they won't be able to afford any other clothes until next time. They'd learn quick when they have to go to church in torn jeans because they bought a brand new shirt instead.

  7. We do not get paid allounces but we some times make things and sell them. also wehn younger we got $0.50 a load of launfry to learn to do this. Now we just help out. Come over!

  8. Perhaps you do this already - but if not might I suggest another category that your children should learn: saving. Set aside 10% as planned personal savings right away. I think it might also be a good idea to teach your children to track their expenses (as age and ability allow) - knowing where you spend your money is an important step in planning IMO.

  9. I like this idea. I have only one baby and he is only 7 months, but oit will be defenitely something to look at in the future.

    I would like to ask your advice on something. I have been following your blog and you seem like a very wise woman of God and I would like to ask you something. See my church is not supportive of quiverfull mindset so I really can't go to anyone here. Please email me when you can

    Thanks and God Bless,

  10. I really kind of like your idea, and Lord knows we disagree a lot..haha!

    I don't remember at what age I got an allowance as a child but it equated to $5 or so when I was less than ten and then as a teenager it was more like $10/week. Like you, I blew my money on candy and have paid for that tenfold with all of the dental work I have in my mouth. (I hate the dentist; I'm sure he loves me though!)

  11. In the past, our family has tried many different "systems". But for the last few years, we have gone with a weekly allowance. This seems to work best for our family too.

    Our children do have a lot of chores, compared with other children of similar ages, and we think it is only right to reward this hard work.

    I printed off this post to discuss with my husband last night, as I felt one or two points could be very helpful to our family.

    For example:

    We thought the "no wallet, no cash" idea was great! So much so, that we implemented that point right away! Our eldest is careful with her money now...but it was a long road. If we had used this strategy before, then perhaps it wouldn't have taken so long to get the message across!

    Great post, thank you sharing your ideas! :)

  12. This post was oh, so helpful! Thank you a thousand times over for it.

    On a side note, I really hope the HG has slacked off some. :-)

  13. Checkout, we set chores for the kids to do daily, weekly, ect. You can also set how much each chore pays. The child checks off what chores they do, and the website keeps track of how much money they have. We actually put all the money the kids earn in a savings account through our bank, then when they want to buy something they can use their own money. It helps to save them to save for some big ticket items, like the big lego sets. Hope it helps.

  14. Thanks so much for this post! We basically do what you are doing, but you gave several great ideas that I hope to implement in order to improve our system. #1 - Our son has been wasting his allowance on candy and/or gumball-machine trash toys; I love the idea of restricting what he can buy (sounds really obvious, I know). Other ideas as well! Thanks so much for this article - I have forwarded it to my DH.

  15. I enjoyed reading about your system.
    Right now I pay my kids according to how many chores they do. I found a chore app on Google Chrome's Web store. It's called ChoreList. It allows me to make multiple lists and divide the chores between "before breakfast", "after breakfast", "after lunch", and "evening". Those divisions fit well with the chore times I have through out the day. I created our own "money" so I could pay them each day. I wanted them to see a reward for their work daily and I was having trouble coming up with cash to pay them. They can save their play money and trade it in for the real thing when I have the cash. With the play money they can buy computer time, lollipops (organic and only one a day), or other privileges. When they get their real money we set aside money for tithe.
    You did give me a new idea. I am going to start taking money for a bad attitude or playing during chore time.
    Thanks for sharing your ideas. It really helps me.

  16. Obliged, I agree absolutely not. But surely it's nice to occasionally treat your kids with a 'want'?

    I mean, my boys don't NEED to come to the shops with me and get ingredients at my expense which we later turn into cookies together. However it's fun, teaches them about shopping and cooking and ends in a pleasant treat for everyone. Where's the harm in that? It sounds very much as meeting any and all wants is frowned on.

  17. Zsuzsanna - I really enjoyed this post. Lots of good ideas...I do something similar but (a) am not always consistent with giving allowance (mostly b/c I forget and don't have the cash on hand) and (b) my older 2 kids use piggy banks rather than wallet. I think the wallets idea is great, as is the idea of removing money for misbehaviour. Also, if I really want to teach them, I have to be consistent!

    One other piece of the puzzle for me is that I reward exceptionally good behaviour or just plain good behaviour if it is an areas that the child has been struggling with. So, my older son gets $4 per week (he is 7.5) but can get more if, for example, he improves on his table manners. The extra is at my discretion, kind of like a little "bonus."

  18. I just blogged about this exact topic a few days ago! Looks like we have some similar thoughts. :)


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