Monday, March 23, 2015

Allowance or No Allowance?

Photo by Ponsulak via
Last week I got an email from my friends at Let's Talk Live asking me if I would be willing to come on the show and talk about allowance for kids. Is it a good idea? A bad idea? How much and how often?

Of course I have no idea about this stuff. We don't do allowance at my house because of a couple of very good reasons:
  • Mommy forgets to pay kids because she never has the right amount of cash and then she gets all confused about how much she owes people and everyone gets dissapointed/angry.*
  • The kids are SUPER ENTHUSIASTIC about our allowance plan! For maybe two weeks. 
  • The longer my kids associate chores with money, the more they seem unwilling to do anything they're not getting paid for.
*I hear the tooth fairy has the same problem. Get it together, ladies.

So I have some questions for you because as usual, I need help and you guys are a lot smarter than I am:
  • Do you pay your kids an allowance?
  • How much and how often? 
  • How much money do you think kids of different ages should get?
  • What kinds of things do your kids have to do to earn their allowance?
Thank you SOOO much! If you live in the DC metro area, you can tune in on Friday for the live broadcast (of me flailing around): Channel 8 at 11am.

xoxo, Julie

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  1. Allowance and chores were never tied together when I was growing up. Allowance was a way to teach us about money, saving, spending, wants and needs. Chores were something we did as a part of our family.

    Allowance was paid on Saturday mornings. 25% went into savings, which every few months was taken to the bank. The rest could be spent or saved how we chose.

    When our kids are older they will get an allowance to teach them about money. They already have jobs they do because they are part of the family and everyone helps out. The two will not be linked.

    1. Agreed - allowance to teach about saving long term & short term, service to others, spending, value and giving to God what is his in the first place. Chores are a part of being in and serving our family. If they show special kindness, extra effort, sacrifice or do extra chores then we give them a lot of praise and sometimes money as well (we don't call it allowance though). there is no set amount but our kids are still pretty young (3 and 6)

  2. My parents did a dollar for each year of age. We were expected to give 20% to the church/charity, 40% to save, 40% for spending. It was more about money management. Chores were something else entirely- you live in the house, you contribute, my parents said. :) I think it was every two weeks. My daughter is only a year, so no concept of money yet, but I think we'll be instituting the same policy.

  3. So I'm not a parent, but I've had some time to reflect on the lessons I learned from my own parents, and have some opinions about allowances.

    Kids in high school should definitely get allowances. Kids in junior high or middle school should probably get allowances. Kids in elementary school, it's going to depend far more on the kid. Generally speaking it's probably a good idea for teaching budgeting and fiscal responsibility early on, but each family is different. In my opinion, there should be a baseline allowance that the kid is guaranteed -- say $20 a month -- and then if you want there can be an option to earn more. As to how much, it depends on the age of the kid and what they're expected to buy. In high school, I received an enormous monthly allowance, BUT I was also expected to use that to pay for, well, everything but family meals and school books. I want to go to the movies? I can't ask for extra cash, it's got to come out of my allowance. I need shampoo? I've got to figure out if the fancy stuff is in my budget. I think the goal is to figure out what the kid is expected to spend their money on, and then give them slightly less than they probably want. It's better to err on the side of too little than too much, just try not to give them so little that it's not worth trying to save for anything. The goal is to teach them how to budget, plan ahead, and make small sacrifices.

    That said, the most important reason I find for offering an allowance is freedom. A teenager who doesn't have to beg for every $5 is a teenager who can make their own choices. You as a parent still control how much they have to spend, but they get to figure out what's important to them to spend it on. I cannot overstate what a difference having an allowance made to me as a teenager. This is why I consider allowances to be essential for high school students, and advisable for junior high, but optional for elementary. These ages have different requirements and capacities for independent action, and their allowances should reflect that. An older child would be going out without adult supervision entirely on a regular basis, while a younger child might only be budgeting for the odd independent purchase -- candy from the grocery store, the occasional toy you wouldn't necessarily buy for them, or souvenirs from summer vacations.

    One caveat: as in so many things, consistency is essential. It does your family no favors to forget to pay an allowance or to stop paying allowance for no particular reason. If you need to change the rules, do so as part of a discussion on WHY, not just on a whim. Spell out for your children what their allowance is for, and then STICK TO IT! (My parents undermined their own lessons by deciding that, for example, it wasn't worthwhile to wait for me to check out separately at the supermarket, and letting me add personal purchases onto their ticket.) Write out a contract and have everyone sign it, if you need to.

  4. We just started allowances with our kids - my daughter just turned eight and my twin boys are 6. It's been about six weeks and I have a harder time keeping up than they do. They get a total half of their age. One dollar of each week goes to their savings account in the bank. The rest goes in their piggy banks.

    I've used the allowance money for them to pay me back for toys they wanted or even for food that they waste or things that they ruin.

    For us it is working. :)

  5. Agree with Jenn; allowance and chores should be different. But also love the idea of giving the children opportunities to earn more money if they want to. :)

  6. Kids should not get paid for the things they should be doing anyway. If they live in the house, they need to help clean it. If they wear clothes, they need to help wash them. If they eat food, they need to help cook and clean up after. Why? Because everyone lives here and everyone helps - that's what you do when you love each other.

    We NEVER had an allowance growing up. BUT, my mom always had cash saved for us to go do things if we asked so long as our grades and attitudes were good, and our chores and homework were done.

    My husband and I go round and round about this because he is from a wealthierish family (I'm a military brat) and had a nice, fat allowance growing up...and was hardly expected to do anything around the house at all. Now, he still does pretty much zero housework unless I specifically ask him to do XYZ. But I prevail, because I'm the one home most of the time with the kids. The rule is, essentially, homework and chores done before you're allowed to do your most cherished privilege (for our daughter, that's TV time). Don't ask for it until you've got your list done.

    Now, to be fair, I only schedule one big chore a day, and everyone gets a day off every week; there are no big chores scheduled for days with extra-curriculars, like my daughter's competitive swim team. Mondays, she vacuums both kids' rooms and the upstairs hall; Tuesdays, she vacuums the living room and couch. Wednesdays, she sweeps and vacuums the dining room (which is a feat, with a toddler constantly throwing food). Thursdays, nothing - swim. Friday is a half day at school every week, so that's her day off so she can enjoy it to the fullest. Saturday is laundry day - she's responsible for her clothes, the kids' bathroom towels and rugs, and both kids' sheets. Sunday, she scrubs her bathroom and the powder room.

    There's a balance to be struck between age-appropriate jobs and expecting them to do everything. Be fair, but do not pay them for housework. Also, always remember that even housework done incorrectly blesses the family - as long as effort is put in, they can correct whatever went wrong the next week when they do that chore.

    1. This is very, very impressive. I have a lot to learn. How old is your daughter? I'm taking notes.
      Emily L

  7. I got nothing as a kid until age 11. At that point I was given $20 a week, 10% of which went into savings, and the rest was mine to buy lunch at school if I didn't want to take lunch and to pay for whatever entertainment or stuff I wanted, clothes included. In exchange, I did all the laundry, vacuumed, dusted, mopped, and scrubbed the bathroom each week, and I was responsible for getting dinner started in the evenings. That summer was the first I was allowed to stay home unattended and the chores kept me busy enough to stay out of trouble. The downside is that I am now totally burned out on housework and struggle to keep up with it as an adult.

  8. Hi - my kids get half their age per week, so right now $4.50 and $5.50. I use my to-do app to remind myself to give it to them - without this I would probably never do anything, and certainly not remember anything. They do weekly and daily chores which are not tied to allowance. They spend their money on extra things that we wouldn't buy them (a stuffed animal souvenir on a trip, souvenir sweatshirt, an extra arcade game on an outing, that type of thing). I'm thinking about moving to a clothing allowance for my older one, where she gets a little more and buys all her own clothes - she is very picky and I don't want the whole clothing thing to be a huge problem. They also have a 'job' walking the neighbor's dog - each time they walk her they get $1 each.

  9. The way it is supposed to work in our house (I have the same forgetting to pay problem) is they get $2.50 a week, paid in quarters (there is a reason for that). They get the allowance for their "work", work being trying their best in school and their activities. A 10% to charity, 30% to savings, the rest is spending. HOWEVER, everything in life has a price. So if they don't do their chores, they have to pay for maid service, a quarter for every chore they don't complete (thus allowance being paid in quarters).

    Of course, in theory, this sounds good, but I never have the stupid quarters, we forget to charge them for chores and in the end the whole thing falls apart. But we usually get a good run for a couple weeks every 2-3 months. Oh and my kids are in 4th and 1st grade.

  10. We do a modest allowance per month. I write it on the calendar and put a reminder in my phone. (However it was supposed to be paid Friday! Oops)
    We don't tie chores and allowance. Chores are expected as part of the family and allowance is to learn about money. My kids need to pay for "extras" with it. For example, we'll take them to the movies, they buy their popcorn. I will pay for special lunch day, they pay for the extra chocolate milk they want. I will pay for a pair of pants up to x amount and the pay the difference. They can earn extra money by doing extra chores around the house if they need/want.

  11. I have only a 5 yr old and we have just recently started doing allowance and chores. She gets $2.50 for contributing through out the week (picking up clothes, feeding the dog, setting the table, etc. ). But we have currently also worked out some extra chores that she can do to earn extra money for something specific she is saving up for. I wanted to teach her that there is not always instant gratification and you don't always get what you want when you ask for it - you have to earn it.

    As far as money for chores goes, I think kids should be able to have a way to earn money to buy the things they want. I know some people are like "Mommy doesn't get paid for shore!" but you do when you get to buy your self that cute pair of shoes or purse or the "good" wine once in a while - that is your reward. I also like her being able to earn and spend her own money because then when she wants something, I can say "do you have your money?" without always saying no to buying Every.Single.Piece of random junk that she wants. And then when she does have her money, we have counting lessons and math lessons and lessons on choosing what you want or don't have rather than some thing that is junky that won't last.

    But I think you have to do what works for your child and each one is different with different motivators. My child is enjoying it and having fun saving and counting her money so we keep up with it. Others may not be motivated by earning money from chores and then you have you think of something different like an outing or a privilege that they wouldn't get otherwise. And I assume it is different with different ages.... guess I will find out soon enough. :)

  12. We started a commission based system when our daughter turned 5. She has a set list of daily responsibilities that she is expected to do without payment (keeping her room neat, putting away her laundry,etc), but she also has a list of optional paid household chores (dishes, pet care, unloading groceries, folding laundry, etc). She does not have to do the paid chores every week, and we only pay her for the ones she does when she does them. She can earn $1 per chore per week - so a possible total of $7 a week. (We'll adjust the chore list and rate as she gets older.) With this we instituted guidelines for saving, tithing, and spending because our primary motivation for starting the program was for her to learn money management skills. It's been almost two years since we started, and I would call it a success. I wrote a post about it on my personal blog, if anyone wants a little more background and detail.

  13. My 5yo daughter has a chore chart with daily things like brushing teeth, dirty clothes in the hamper and picking up toys at the end of the day. For 25 stars she gets stickers, for 45 stars she gets a book. It has been helpful to get her in the habit, and it's easier for me to have a stash of reward books than to remember to have cash on hand. Not all chores earn stars: some things just have to be done because I asked her to and because she is part of the family.

  14. We have my 5 year old on a points system, wherein if she earned enough points during the week she can cash them in for a selection of privileges, like baking cookies with Mommy, sleeping in the guest room, a special art project, extra screen time, or 4 quarters. In a year she has NEVER chosen the money. And her daily "responsibilities" are a regularly updated list of things we want to reinforce, like getting herself dressed/bed made, feeding the fish, respecting other people's bodies (when she went through a dreadful 'hanging' phase), using manners, listening the first time, acts of kindness. That system really helped us get through a rotten phase but we've neglected the chart for the last few months because she's stopped being the devil and doesn't need the reinforcement as much.

  15. Yes, my kids get allowance starting in 1st grade. They get paid weekly and they get their grade number in dollars ($1/week in First, $2/week in Second....). This is accounts for growing tastes and changing trends and increased responsibility. This will probably flatten out when they get to middle or high school, or if it continues they will be responsible for helping with some of their activity costs. I haven't decided yet (they are K and 2nd).

    They do not earn their allowance through chores. Chores and allowance are COMPLETELY separate. Allowance is about learning fiscal responsibility. They have a check register. They have to add in their allowance every time they are paid. They have to subtract if they take some out for any reason. They divide it between Saving, Giving and Spending (We use the MoonJar because I like it, but you just have to apportion the percentages). Savings is her no-touch money, and she pays herself first. Then she gives, then she spends. When she has mandatory expenses she will have to budget we will re-do that, but for now her spending money is all fun money, so that comes last. When she gets "extra" money like a gift or found money something she can decide where it goes. We discuss it, so far she usually chooses to split it somehow, but it's her choice on where they go.

    As to chores -- chores are expected. They are part of being a responsible person and a cohesive family. You help each other out. You care for yourself and your space and your family. They are in charge of their rooms, they have to keep the play room and the living room picked up. They don't have a chore list, pretty much it's just expected that if I ask them to do something, they do it without complaining. For the most part they do. Sometimes they do the dishwasher, sometimes they help rake leaves, sometimes they vacuum....and they are really good about it. The only time they get whiney is for hanging up their laundry, but I mostly leave them in control of that. The clothes are done and ready to be put away/hung up -- they get it done. If it gets out of control they might miss out on doing something fun because they have to get their room picked up, but that rarely happens.

    Now . . . they can earn EXTRA money by doing EXTRA chores. My 2nd grader is a big reader and really wants to get an e-reader. So she's saving everything for that. If she was $10 short and wanted to earn extra money and not wait for her allowance, she can ask to do extra chores for me, her aunt/uncle, or for her grandparents and I will pay her for her time. She will wipe baseboards, clean and organize the bathroom cupboards, go cut all the box tops off our pantry items, shovel the driveway, sweep the garage....etc. Things that I *could* ask them to help me with but likely won't. If they get it done in a reasonable amount of time, I will pay them upon completion. I will also loan them money to be repaid by allowance or chores, typically with interest. We went on vacation and once we were there they decided they wanted to spend some extra money they had from dog sitting but we didn't bring. I loaned them that money without interest, because it was sitting on their dressers. No problem. Then when they wanted to spend MORE than that, we negotiated the number of chores they would owe for what they wanted plus interest. It's really great. I was raised to be very fiscally responsible, I know how to budget, I know how to figure out what I want/need to earn so I can adjust my employment accordingly, and my parents were great about making sure I understood not only money but interest rates, lending, debt, credit, and the time value of money.

  16. I agree that allowance is really important for learning about money and budgeting, and that it shouldn't be tied to chores. Kids do chores because they live in the house.

    That being said, I'll answer the other part of your question - how do you remember to pay it. I struggled with forgetting to pay the kids their allowance for way too long before I complained to my CPA husband and let him solve the problem. ;) He took both kids to our bank and opened up checking and saving accounts for each of them. They got checks and debit cards with their photo printed on the front. And now their allowance gets automatically deposited from our account into theirs each month. Without me lifting a finger. Best thing ever.

    In addition to learning about saving and budgeting and all of those things, they've learned to write checks, use a debit card, balance a check book, check their accounts on line, how to use an ATM, the importance of a PIN, etc. We've talked about the difference between credit and debit, interest (paying it vs. earning it), etc. They were 7 and 10 when they got their accounts, so I hold on to their cards unless they are going someplace without me, but I am going to let my now 12 year old keep hers soon.

  17. We don't do allowance. Chores are just a part of being in the family - you live here, you help out to keep the house looking/smelling/feeling nice (difficult with 3 smelly little boys and 2 big dogs!). If they want to earn money towards a big purchase (we made them pay for 1/2 of the X-box we bought last year), they can do chores that mom and dad normally do, and they can "earn" a little extra for consistent good grades (i.e. 3 A's in a row on spelling = $5, etc.).

    I really feel that kids need to work just as hard as adults do to earn their money, however you set that up in your house. They also need to contribute to the household in a meaningful way, as responsible members of the family. Sure they may complain and whine, and somebody always has something they feel entitled to, but it works for us. When they do "earn" money, 10% to church, 10% saved, 80% to spend.

  18. Hi Julie,
    We have allowance for our three kids, it is the dollar amount corresponding to their grade, paid each week (so the third grader gets 3 dollars per week). I have 3 savings accounts for them, tied to my bank account and accessible via online banking. I have a scheduled transfer of funds from the main account into their three accounts every week, so I don't have to remember to pay them. Then, when we're out and they want a toy or game or something, they need to use their own money, and I can transfer the money back into the main checking account right in front of them with mobile banking, so they see their balance go down as a result of their purchase. Works for us. They also bought all their Christmas gifts for each other and for family from their own accounts. Allowance is not tied to chores; we expect them to help around the house because they live there. I hope this helps!

  19. I understand the concept that when you live in the house, you should contribute without expecting compensation, and although I agree with that, I find that our "get paid for what you do" system works best for us. My 8 year old has a list of different chores with the "salary" that goes with it (unloading the dishwasher -- 25¢; folding his laundry -- $1; gathering all the trash and recycling on trash day -- 50¢.. etc). He ends up earning approx. $4-$8 a week. It may sound like a lot for an 8 year old, however, I don't buy birthday presents for all the kid parties he goes to anymore, he is responsible for that. He pays for a lot of his own things... even an ice cream cone if he wants it when we are out. It use to be so difficult to get him to help with chores around the house (I would have to tell him SO MANY times to focus and complete a task), but now, when I say "hey, the dishes in the dishwasher are clean. Do you want to unload it?", he says 'yes' and comes right over to do it. I check off on the chart what he does every week, and at the end of the week, he has to add it up correctly and then I pay him.

    I was worried when I begun this 'pay by the job' chart that he would want to be paid for any little thing I ask him to do, but he has been more willing and helpful even with things that I don't pay him to do. Also, I'm seeing him making smarter decisions with his money (i.e.: choosing to not buy a cheap toy because he is trying to save up for a gaming system). The stress level for me has gone down so much with our 'system'. It may not be for everyone, but it works great for us.

  20. My children are 12 and 16 and they each get $10 per week. They have no specific chores around the house, but they are expected to pick up after themselves. I am extremely particular about neatness, and I very rarely have to remind either of them to put away something they've left out, put their clothes in the hamper, or bring their dishes to the sink. I don't ask them to do their own laundry, because I don't think it's efficient for each person in the house to do their own laundry, and I don't assign a chore to them each day of the week, because I like the house all clean at the same time. On the other hand, if I asked one of them to sweep out the garage or pull the weeds from the flower bed, they would do it without complaint. I don't pay them extra for helping around the house, and while they are both A students, we also don't pay for grades. Our expectation is that they be the best students they can be, and that they be kind and respectful.

    The biggest reason we started paying an allowance was to get them to be responsible for purchasing their own extras. If we go to Target and they want to buy something, that's fine, as long as they have the money for it. It ended all of the whining in the toy aisle when my youngest was 5-6 years old. Once in a while, I'll see one of the kids agonize over a purchase, something they really want, and then decide it is worth clearing out the wallet for it, and when we get to the counter, I'll go ahead and pay for it. I thought we were getting to a point where if it was my money, they couldn't live without it, but if it was their money, they could, so providing an allowance solved that.

    As far as remembering, I "pay" myself and my husband every Friday (i.e. I get some cash from the ATM for our running around money for the next week). I just get an extra $20 every week to cover their allowance.

  21. Mine is only 3yo, so not an issue yet, but I can say that it is my intention to NOT provide an allowance. My reasoning is based on the reasons given to me as a child (for why I did not get an allowance): there are certain responsibilities you have as a member of this family and you don't get paid for doing what must be done to keep the household running. We also did not call them "chores", they were simply the things that we were expected to do each day or week. Setting the table, clearing the table, mowing the lawn, putting groceries away, keeping the bathroom clean. But there were "extra" things we could do to earn money such as wash the car. We were given money for outtings such as trips to the movie, and I learned to do without popcorn and keep the cash. I also worked part-time starting when I was 12, and worked between 20-40 hours a week all through middle and high school. Yes, I really started working at 12 (I worked for my father's company, but I had taxes taken out and made an astonishing $4/hour). BTW, we were firmly middle-class, it was not a necessity that I work, it was my choice and my parents supported that choice. At the same time I was working 2 part-time jobs in high school, I was also an Honors student, was on the Debate team, graduated with a 3.96 gpa and was 12th in my class of 400. I was accepted to an Ivy league school and won several scholarships. I mention all this because I actually believe that some of the credit for my accomplishments was do to the sense of responsibility and accomplishment I developed through actually EARNING my own money, and by understanding that you don't get PAID to do the dishes when it has to be done.

  22. My little one is only 3 so I haven't started an allowance with him but my parents had a really cool way of doing things. They had a little savings passbook for each of us (not a real one but one they could just note in). Each week they would make a note of how much they were "paying" us. They didn't hand us cash. Then when we wanted something special (buy a toy, go to a movie, etc.) they would pay for it and then deduct it out of our passbook. Made things easier for them. Made us automatically save. They also never made allowance tied to chores. Chores were required as being part of the family. Allowance was for being a good member of the family. We could always earn more money by doing extra work around the house. I was paid extra for watching my brothers because I was the oldest.

  23. I've read a million articles and studies about chores and allowance - half say you have to tie allowance to chores or the kids will be screwed up, half say the opposite. so that's no help. We do a hybrid system - they get a base allowance plus we add monetary incentive for things we're working on. For a simple example if you want your kid to practice piano without having to be reminded, you give a little extra each time they do it on their own (for some of the things we work on, there is also a deduction for negative behaviors. They are usually half the amount of the bonus, which gives them a chance to mess up a few times without real consequences). After a couple of months it becomes routine and you move on to the next behavior.

  24. We don't do allowance at all at my house. I know I am probably a terrible mother for this. However, each summer we have run a lemonade stand. I pay for the materials, then when they earn some money they pay back my investment. Through this they have had to learn to budget for purchasing additional materials each week. They also put 10% to church, 50% to savings and the rest is for fun. I also have taken my daughter to craft shows with me where she worked hard selling her own wares to earn money. She also paid a fee to me to pay for the space. I paid for the space to sell, so she paid too (though much less). I even give each a ledger to keep track of their funds.
    My kids have work they are expected to do around the house as part of living here. Money is not part of that. But I have offered to pay for various extra jobs. I absolutely think kids need to learn to budget, but I don't keep cash around the house to just give them each week. So far they are pretty awesome with it. My kids are 11, 9,7,5.

  25. We have had a system in place for two years now. My five year old has four money boxes (from various Christmases/birthday gifts from relatives etc). She gets a regular allowance which goes into box one. She decides what this is spent on, she can use it for sweets, toys, magazines etc but once it's gone, it's gone. We only buy toys at Christmas and birthdays so she has gotten quite good at saving if there is a particular toy she would like (she recently wanted the Maleficent DVD so saved for four weeks).
    The second box is used as a reward system. At the moment she is learning to read so she gets a penny for every word she reads when we have a reading session. This has also helped with her maths skills as she counts out all of the words she has read each night and then counts out the relevant amount of pennies.
    The last two boxes are for vacations and the bank. Any extra money she gets (such as when we go to grandma's and gets slipped a couple of coins etc) goes into one of these boxes. I feel that she gets enough in her allowance and doesn't need any more but people do give her loose change every now and again. It's up to her to decide whether this is put aside for spending money on vacations or if it goes to the bank.
    The box with the pennies in gets emptied every once in a while, we count it out and again, she decides if it goes into the vacation fund or the bank.
    I've found that this way, she has a budget every week and can save for things short term (over a couple of weeks-a month) but she also has an extra stash which teaches her about long term saving. Whenever we have been on vacations or day trips since she was three, I've always paid for entrance fees, ice creams, meals etc but she has to use her own money if she wants souvenirs etc.
    Dad pays her allowance and she is aware that I put the same amount into her bank account every month so she still has money going into her account for the future.
    It works out a lot less than it probably sounds and she gets, maybe twenty five dollars a month in total (I'm British and no good with exchange rates) but, just like my husband and I with our wages (after bills) we have money which is for instant gratification (such as the bottle of wine bought on a whim), a short term savings fund for holidays etc and a long term savings plan for education/New car/house down payment etc.




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