Thomas and I were talking at dinner the other night about an allowance for kids. We haven’t done one for Mazen yet because we haven’t been sure what the best approach is. There has to be a recommended way to structure an allowance. What would Simplicity Parenting say? What would Dave Ramsey say? I know there are all kinds of kids money programs (like Dave Ramsey’s) but I’m looking for some simple recommendations on a good system for kids to acquire and manage their own money.
What are the benefits of an allowance for kids?
The reason we want to start giving Mazen an allowance is because we hope having his own little stash of money will help teach him the emotional consequences of spending, saving, and giving. Of course we as parents want to see them spend, save, and give responsibly. But they need to learn for themselves what it feels like to overspend, reach a savings goal, or feel the warmth in their heart when they give.
Different Ways To Give An Allowance For Kids
The way I see it there are several ways I have heard of an allowance being given:
- You’re paid based on your age. So Mazen would get $7 a month. (Salary)
- You are paid based on your work. (Commissions)
- Allowance is a small amount but you can earn more from work (Salary + Commissions)
How we currently handle money with Mazen
Mazen does have some money in his wallet. (It’s actually a women’s wallet he bought from our neighbors’ yard sale a few years ago – ha!) Here’s how it go there and how he spends it.
“Income”
He makes a few dollars when he and the neighborhood kids do a cookie/pokemon/lemonade stand and he sometimes gets $1-20 gifts like when he loses a tooth, his birthday or when grandparents visit.
Spending
Usually after his birthday each year he has enough to go buy a toy at Target and he will whittle the rest away on small toys or iPad apps. I make him buy apps on his iPad because I refuse to spend money on those things, so he can sometimes produce $2.99 for this or that from what’s in his wallet. We don’t buy him toys on a regular basis – he only gets them on his birthday, Christmas, and occasional gifts and rewards. (Like when he had to get two teeth pulled). But I am not one to buy him a toy every time we got to Target. I do freely buy him books because I always want to encourage reading.
Chores
Mazen does a handful of chores each day but they are mostly related to his own wellbeing, like making his bed or putting his dishes in the dishwasher. I think what he does is enough for a seven . year old, but I also would love for him to do some actual housework. I think tying “beyond your room” chores to an allowance would be a good way to encouraging earning money. But I also know Mazen and would guess he’d rather not have money than do chores. So if his allowance was 100% chore tied, would we end up back where we are now?
What we pay for
We pay for clothes, sports, activities, and birthday party gifts for his friends without question. Also the Tooth Fairy and Santa Claus are close friends.
What do you do?
I really don’t have any answers or insightful conclusions to how we could start an allowance program. We don’t have a plan yet! But I would love for you to write in with comments on what has worked well or what has bombed at your house. Any lessons learned or best practices? I hope to write a part II when we have this figured out and can offer some of our experience.
meghan says
So, I’m not sure this is that common. But we’ve had a lot of success with drastically upping the amount, but also imposing some mandatory savings, etc. things. My son’s eight, and I think it’s given him a realistic appreciation for how much of money is for the future- for serious savings things, and giving how much is for fun/frivolous or shorter-term goals.
Basically we “give him” the amount that we save every month for his college/add to his Roth on a monthly basis, but he sees it immediately get saved away, before he can touch it. It enables us to have lots of discussions about long-term planning and money. We’re able to let him know how much we’re targeting for him to have for college, and then also let him know that if he goes for free and leaves that money saved, he could have X for a house payment, four years later, or X for retirement savings at 65.
We also regularly have him “budget” things. For example, last week, I had him plan our grocery shopping, giving him a budget, the requirements of meals, and some “ideas”. There was obviously some handholding. (And some iced animal crackers that wouldn’t have made the cart otherwise!) But I was impressed with how well he did.
We were worried there’d be some awkward conversations with classmates, and there may be. So far no. But growing up in a family where my parents never talked about money, but told me to apply anywhere for college, only to let me know at 18, when I hadn’t even applied to the local state school, that there was less than $2k saved for it…. I think transparency and planning from a young age can only be a good thing.
A smaller allowance and the expectation that he use it only on the fun stuff didn’t really impart the sort of holistic view of money I was looking for. Though of course, everyone’s different.
Kath Younger says
I think this is all great advice!
Angie says
I love this post. My oldest is 7 and youngest 3.5. We’ve talked about this a lot lately. He has normal chores like Mazen and I pay a few dollars for others like dusting the living room, doing the baseboards, magic erasing the kitchen island,etc. I want to teach them to budget since we don’t buy extra toys throughout the year. I’d love to hear what others say.
Jill says
Our son is 11 and he gets an allowance of $3.50 per week. He is responsible for feeding the dog and two cats plus dog walking and cat pan scooping. Also, general upkeep of room and putting things away after use. We have a rule though that 1/3 of the money goes to savings, 1/3 to charity and 1/3 is his to spend as he chooses. It has worked well so far.
Kath Younger says
Does he ever boycott his chores?
Jill says
He tries occasionally but we remind him that it’s his responsibility and he does it, thankfully!!
Cassie says
Love this. We have three teenagers. They don’t get paid for stuff that is expected of them, liking cleaning their rooms or doing their own laundry. We do pay them for “extras” (around $30-40/mo) that contribute to the whole household, like taking out the trash, walking the dog, and stuff like that. Additionally, we give them a base amount ($50) a month, that goes toward clothes and school field trips and school supplies. They aren’t allowed to spend this freely; they have to use it on things they “need”. Each kid manages and has their own budget under our YNAB account. So between their base amount and the amount they earn for extra chores, they then go in and can see how much they have for incidentals, spending, and then decide what to put away for giving and savings. Our goal was for them to learn how to budget and to know the difference between what you need to live vs spending. So far it has been working well for us.
Kath Younger says
My dream is to have my kids using YNAB : )
Rghdrft says
A friend of a friend has an interesting discussion in this blog post.
https://www.emilyedlynnphd.com/blog/2019/1/27/a-quick-and-easy-guide-to-giving-kids-allowance
Elizabeth says
I started paying my kids for grades when they each entered middle school (like my parents did with me-I never had an allowance). $X for an A, $Y for a B, nothing if you get a C. It’s worked for us. Kids put half in a savings account that earns interest which they can check on on their phones and they get half as cash to spend as they wish. So far, it’s worked to teach them to save and spend. The giving part has not come as easily so were working on that. I talk about money with the kids and try to model smart choices and delayed gratification (telling them I’m saving up for an item or explaining why we aren’t buying something now). It’s a fine line because I don’t want them to have worries about my financial situation but I also want them to understand that money is not a limitless resource. I wish my parents had given me more guidance regarding handling money so I’m really trying to be intentional about it with my kids.
Michelle says
I’ve done the same with my tween/teens. I look at it as their “job” is to go to school and they get paid for performance. They are required to save half of what they earn from report cards and from birthday/holiday gifts for the long term but can spend the rest freely. This has worked extremely well at teaching my older child the value of money. She spends a lot less frivolously than previously now that she is actually working for it.
Lucy says
As a high school teacher, I find this approach somewhat problematic because it places the emphasis on grades, not on learning. In turn, this can create a culture of cheating, instead of helping kids develop a genuine interest in building their skills, knowledge, and capacity. Countless times, I’ve seen students obsess over grades (asking for make-up work, bargaining for a better grade, plagiarizing to receive a better grade, etc.) without actually caring about the subject content or the process (and challenge) of learning. I understand that it’s hard to measure student achievement when you aren’t in the classroom with them for anecdotal observation, so looking at grades might seem like the best way to measure their performance. I just don’t think it always accurately reflects what they’ve learned; moreover, it can reflect how well they’ve learned how to work the school system. This is by no means a judgement or implication on your parenting strategies or your children – I think it could work very well for some but could be a slippery slope for others. I just wanted to provide my two cents and perspective as someone who works with teenagers 🙂
Michelle says
I can appreciate that take on it. My son obsesses about his grades not for the money but because that’s just him – he wants to excel not to please us or for monetary incentive – we’ve made it clear that as long as he’s giving his best effort that’s all we want. With my daughter – in high school we’ve seen that this approach has encouraged her to just give that little bit extra – she’ll take opportunities for extra credit, put a little more effort in studying for exams, will advocate for herself if she gets marked off for something she’s sure that she handed in, etc. She’s not obsessing about grades but in cognizant that putting a little more effort in will reward her now in her pocket and hopefully when she applies to college (in our pockets)
My younger child was going to strive for A’s with or without the financial incentive – his payment is almost as an afterthought as it was more to incentivize my older child and has worked in our household. That being said we’re not throwing hundreds at them. Our structure is they get paid for their 5 core classes – English, Math, History, Science and Foreign Language. A’s =$20, B’s = $10 and if they get more than one C in any class, electives included) or a D they lose out on payment so the max they could get is $100 a quarter or $400 a year. I know it’s not a plan that would work for all but in some cases it does.
Elizabeth says
I understand what you are saying but in our case, it’s actually been a positive experience. My older son is not naturally academically motivated and having a tangible positive reward for grades has made him forcus more and has made him want to improve. He’s now more likely to turn in assignments and do the extra credit. He’s a smart kid who had low motivation and this has helped jump start his interest. It has also helped him see a postive correlation between effort and result and that has had a very positive snowball effect-the harder you work, the better your grades, the better you feel, the more likely you are to keep doing it. We don’t make a huge deal out of it (he still gets Cs in some classes even with good effort) and we praise him for that as well.
Rachel Schlosser says
We give our kids a “living wage” for the chores they are assigned to do. So they get $10 an hour. Then if they want something they have to buy it, if they want money to spend at the shore or at an amusement park they have to use their money, and they also have to use it for Christmas gifts.
Susie says
Our daughter got $1/age and this was based on her participation in daily/weekly chores. This was money she could spend. Any monies gotten for birthdays, Christmas, etc. was divided-half she could spend and the other half went into a savings account. Later, when she was in high school, if she wanted any high priced item (IPod, cellphone, etc.) she had to pay at least half of the purchase price.
Charmaine Ng | Architecture & Lifestyle Blog says
I think you have a great system going, Kath! I never had an allowance growing up – I was spoilt and just got whatever I wanted. I think it would’ve helped if I did have an allowance! 🙂
Charmaine Ng | Architecture & Lifestyle Blog
http://charmainenyw.com
Amanda says
We got a lot of great ideas from the book Smart Money, Smart Kids by Dave Ramsey/Rachel Cruze.
We use a commission based allowance system for my 9 year old son. Each chore has an assigned amount he gets paid. We keep track of how much he’s earned
On a dry erase board. We’ve been using this system for over a year now, He seems to like it. There have been a couple of times where his allowance was pretty small, but it’s a good opportunity to remind him that money comes from working. No work – no money!
Kath Younger says
I have heard of their book but haven’t ever read it
Diane says
It’s a great tool!
Dionne King says
The Ramsey ideas work really well for us as well. $ comes from work. Period. Our 8 year old daughter works hard when she really wants something. Other times she may pass on the opportunity to earn some cash. Fine – no money. When she receives cash as gifts, we taught her the Spend, Save, Give, jar system. Now 3 years in, it is so natural to her and she LOVES to pull all the Give money out and do something kind for others. Then, I feel like we’re doing something right.
This is a great topic, and I really appreciate the comments. I think we might try the 1st comment from Meghan. We’ve been looking for ways to really expand on college savings, retirement, etc. Thanks!
Julie Sedia says
As a parent of 4 kids who are mostly grown, we did not routinely give an allowance. The “normal” day to day chores (dishes, dishwasher, feeding and letting out animals, taking out garbage, vacuuming, laundry, cleaning of any sort) were things that needed to be done daily (esp as a family of 6). We always paid for all of the kids activities and outings and they had to help do these daily chores- this was always explained as being part of the family and “chipping in”. When my kids were able to legally get jobs- they did and earned their own money. Now if there were “big” chores that needed doing (ie: spring clean up, weeding, any home improvements) we would offer them pay for help. I think different things work for different families.
Ellen says
This is pretty much what we do. Basic chores and cooperation are expected, without any pay, but the bigger jobs come with some earnings.
Robin says
This is similar to what we’ve done as well. It’s funny, when they want to earn money for something they work like crazy!! Then as soon as they finally have the money to buy that big item, the extra help with big jobs drops off (however, my budget is also better off those weeks)!
We now have a 15-year old and a 12-year old. For our kids in particular, I think not handing them a set amount of money on a regular basis worked well. When our oldest turned 14, she announced she needed help with a resume. It was a teachable moment, about not being dishonest or “stretching the truth” when it comes to a lack of experience. I explained to her that no employer would want her to lie on her resume, and that her ambition at that age should be an asset. She has since obtained a second part-time job on top of that initial job. (I guess we didn’t pay well enough at home!)
In the process, she opened a checking account for direct deposit of her paychecks. She is diligent about checking her account activity and has done fairly well keeping her debit card safe and secure. She even came to me and asked how much she should be saving for retirement, since one of her employers didn’t offer retirement plans for part-time employees. We opened a Roth IRA, and she was extremely disappointed to see there weren’t target (age-based) funds available for people as young as she is!
Looking back, I’m glad we’ve talked openly about money, saving, donations, investing and finances in general with them when they were younger. I’m also super excited to see our oldest have to be responsible to a manager and co-workers in real-life situations! You can’t boycott doing a job or chore at a real work-site… you’d just be fired!!
Kath Younger says
I love that she asked about retirement so young : )
Nina says
I have a 1st grader and 4 year old, and we just implemented a chore/allowance system. They each have several daily chores, and each have 6 weekly jobs that need to be done once, but can be any time during the week. I found a chart on Pinterest and we hang on the fridge in sheet protectors and use dry erase markers on them, so we can change things up if we need to.
My 6.5 year old has the daily jobs of clearing the table (for everyone, not just his own plate) and scraping/rinsing them, picking up his bedroom before bed, and picking up any of his stuff in common areas of the house. This last one has saved me so much time because I used to spend quite a while every day just sorting things back to the rooms they belonged in (socks taken off, toys migrating, books left out, etc). His weekly jobs are picking up the playroom, picking up the sunroom (which also houses some toys), unloading the dishwasher once, doing one full load of laundry including putting away his clothes, and dusting baseboards. My 4 year old has similar but age-appropriate jobs like making sure her markers and crayons are put away at the end of the day, setting the table, etc.
We pay for the jobs done. The weekly jobs are worth 50 cents each, daily 10 cents- but if he does all 7 days of that particular job, it’s $1.00- so a motivation to get them all done. Some weeks, he doesn’t get to everything because of activities or he’s extra tired after school, etc, and that’s fine. He just knows he won’t be paid for them, so it’s his choice and it’s taken a lot of the nagging and stress away from us. He also used to play the “why doesn’t my sister have to do what I do” card a lot, and this removes that issue. She has her own jobs and they have nothing to do with his. She also gets paid less per job than him, since she’s younger and has less understanding of and use for money.
He can use his allowance for extra things we won’t pay for, like getting ice cream at school once a week, saving for toys, ordering a drink (like lemonade) instead of water at a restaurant, etc. It has worked pretty well and he’s started making more conservative choices when his own money is on the line. No more whining about lemonade with his meal- when he sees it costs him 3 hard-earned dollars for a drink that is gone quickly.
Hope that helps!
Kath Younger says
This all sounds like a great system. I just wonder what would happen with Mazen when the “newness” wears off. I’m impressed with all that your son does!
Lorie Waters says
I dunno. I didn’t grow up with an allowance, and never felt like I was missing out. I learned a lot more from watching how my parents treated money.
I did get money for birthdays that got deposited into my own bank account. But it remained untouched until I was a teenager and started going to the movies or mall with friends. I think I was proud of the decent amount of savings I had gained by that point, so I was never overly frivolous with my spending.
Now with my own kids, I continue to feel that an allowance is unnecessary. We openly talk to our girls (3.5 and 5.5) about not having an endless supply of money, and being careful with our spending habits. We have also tried to enforce the idea that our lives should not be based on consumerism. Our girls don’t watch a lot of commercials, and I think consequently they aren’t seeing random toys and junky things they “really really NEED, Mom!!” I think that helps cut out some truly unnecessary “wants”, but also if they do see something they like we usually say to “put it on your birthday list”–of course, by the time we are out of a store, they’ve usually forgotten about it. We’ve also taught them that buying secondhand is much better for the environment, and so they understand pretty quickly if they do see something new that they like, that it likely isn’t environmentally friendly.
So anyway, for us and the financial education of our girls, it goes beyond how they spend or save money, and broadens the focus to how we can be responsible consumers in our world. I think more and more, this is the important discussion to be having with ourselves and our children.
Kath Younger says
Those are great points about the environment.
Karen says
We never had allowances growing up. I got money much how you described from birthdays, tooth fairy, and other activities. I never wanted for anything essential (my parents always bought that for me) and had just enough money for me to be tempted to spend on things I wanted, but not enough for me to get everything so I had to think about it and make decisions and learn financial skills for saving and spending. As I got older my wants increased so I got small jobs to earn the extra money I wanted: babysitting, delivering papers, etc.
Helping out around the house wasn’t considered Mom outsourcing one of her “jobs” for us to get paid to do for her. Doing dishes, cutting grass, vacuuming, helping with laundry, making lunches, and all the other little things that need to be done around the house was something we all had to do as members of our household. When younger we did these things together so we would learn how and it made into games to help make it fun. As we got older we had more responsibility and jobs we were responsible for doing on a regular basis. There was a certain pride in knowing I could be counted on to making sure the grass was cut every week, and if I couldn’t it was on me to ask for help – which I always got when needed. It instilled the idea that keeping a home is something we get to do instead of something we begrudgingly have to do only if we are paid to do it.
LTWS says
As a child, we got our age per month. That amount required me to save for a few months to buy something substantial, like a new outfit for my American Girl doll. I can remember figuring how many months and waiting with the catalog. We had chores we did every day (making the bed, clearing the table, dishes, etc), and bigger ones we split up on Saturday mornings (dusting, vacuuming, spritzing mirrors and glass doors, etc). Those were all required, without financial compensation. I do think we would LOSE allowance if we didn’t do them, and there were times we all lost allowance for egregious behavior as well. As we got older and started making money babysitting, etc, 1/3 had to go to savings, 1/3 to fun, and 1/3 to short-term savings (spending money for a trip). Eventually that last 1/3 went to car expenses for the minivan my sisters and I shared (gas, maintenance). I think it was a pretty good system. My son is just 3 and I’m not thinking about allowance yet, but this post has gotten me thinking about somewhat more established chores/responsibilities for him…
Emily Smallcomb says
I used to tear pictures out of my American Girl catalog and tape them to my wall until I was able to get them (usually for Christmas or birthday). 🙂 I can remember Molly was on the wall next to my bed for a very long time.
Molly says
No advice on kids, but wondering if you’re still using YNAB? Looking for long-term success and best practices for this, since most reviews are within the 1-6 month window.
Kath Younger says
YES!!! I could not live without it. This was a post I wrote after six months. I’m still using it and loving it 1,000%. I do still use a spreadsheet but that is more for future planning whereas YNAB is for the current month spending.
Anna says
I quite like this approach:
https://www.google.co.uk/amp/s/sarahockwell-smith.com/2018/04/16/when-and-how-should-you-handle-pocket-money/amp/
Brigid says
Such good ideas. We don’t pay an allowance (my kids are now 18,16,15). We tried once but then if things need to get done (like take out garbage or feed the dog) and the assigned child isn’t around then we end up doing it. That happened often. I’m not going to let the trash overflow or the dog starve because the kids aren’t around. So this is the problem we always ran into. I admire those who can make it happen. I figure anything my kids do to help around the house is considered a more than fair trade for room and board. I do not hand money out freely though. I will give money once in a while but they plan accordingly for their spending like asking for gift cards for bdays or Christmas. My older son would eat at home before he would go out with his friends when they would go to eat. If he did go to get a slice or something like that he would bring his own water bottle from home. It’s kind of funny.
I have a friend who is an accountant and she does give her kids an allowance and they have to allocate it between spending, saving and giving. They give a portion of their allowance to a charity every year. I think that’s wonderful.
Kath Younger says
That’s my fear too – if I give him a chore and he goes on strike – what do I do?! I can’t just let it go in a communal space!
Robin says
When this has happened at our house, I have gone ahead and done their chore, then after the fact let them know, “That’s a bummer I had to use my time/energy to do XYZ. You’ll need to make it up to me by doing XYZ” (one of my typical household duties or something I HATE doing). Then if needed, I withheld privileges until they did the “make-up” chore for me. It seems to have worked well for us, as they quickly realize the make up chore was much worse than the initial chore they were asked to do!
Kath Younger says
I like that solution!
Brigid says
Most times its not that they are out hanging with friends when the garbage needs to be taken out, they are at practice, games, tutoring, work.
Kerry says
Letting the chore go could be the actual lesson that is needed— trash piling up etc.
last week my daughter had not fed the fish and we thought she killed it… letting the natural consequences happen has been the biggest lesson for my kiddos!
Kath Younger says
Yes but then everyone has to suffer!! The fish lesson is a good one, but I don’t know if I can deal with dirt.
Andrea says
This is a grown up kid perspective, but I would have appreciated learning more about investing from a young age – e.g., having my parents put some of my money in a stock fund and watching it grow. Even if it’s just a little, it would have motivated me to save and invest more when I was a teenager!
brigid says
My 18 year old loves money and has always been a saver. My husband had him open a mutual fund account with part of his savings and it’s amazing how much it grew over 3 years. We should probably get the other two going on this too! It really is important to start saving as early as possible because that makes a huge difference!
Kerri says
My kids are in middle school and now get a monthly “salary” allowance with standard chores. We tried something earlier but never did it consistently probably because they didn’t really need any money over birthday/toothfairy/etc. We will probably add on a fee per chore in the future as they get older and need more money. I think this is one area that will end up very specific per family and whatever works in specific situations.
Courtney says
My only advice would be to maybe sit down with your ex-husband and talk about this before you both implement different systems at each house. That way it doesn’t turn into a situation where he is earning money from doing one chore at a house but at the other house that same chore is just an expectation. Does that make sense?
Kath Younger says
Yup makes sense. Although we’ve always been big on “different house, different rules” since we do have different rules in general.
The Many Thoughts of a Reader says
We do not do allowance as of yet. The oldest is 8. She has more responsibility in the summer than school year because I am of the mindset of you need time to be a kid and by the time she is home from school, homework done and relaxation, plus dinner and bathing she doesn’t have a lot of extra time. Mornings here are slow. I also encourage her to use her time to read so there is that. That being said, she is fully in charge of making her bed and cleaning up her room. She empties household garbages and puts in new bags. She clears the table and sets the table. She sweeps the floor a couple times a week. I did try to have her learn washing dishes last summer but our sink is super deep and we don’t have a good stool situation for an 8 year old. So here is hoping this summer she takes that over! In the summer she sweeps daily M-F and does whatever chore I need help with. She also can bring in the mail and bring in the garbage cans from the road. I think of it right now as, you are a part of this family so you do parts of the jobs to help us. I also never got an allowance growing up. I was responsible for jobs and if I needed money I asked for it. Or I babysat. Or I got it at holidays and what not. I guess I’m not in a big hurry to give an allowance because of this mindset. She has spending money from holidays and birthdays and she can use it to buy toys or books. She doesn’t really use a tablet but I also do not buy apps. I did buy a few educational ones back in the day but now I’m pretty much, eh if we don’t have it we don’t need it. I also do not pay for apps for myself.
The Many Thoughts of a Reader says
I have more to say because I read comments ha. We also have savings accounts for both kids and college accounts. Until recently any check the oldest got immediately went into her savings account and we didn’t even give her the option to spend it. We talk about savings accounts and money often and she sees how she gets interest. The last few times she has gotten cash money we’ve given her the choice to keep half and put half in or put all in her account. She usually picks all to go to savings evvery other time to watch her amount go up. We haven’t really talked about what her savings will go to yet, but I assume as she gets older it will be used on gas, bigger stuff and college.
Elizabeth A Weber-Falk says
We started our children on an allowance at age ten. One dollar for each year of age. We encouraged doing extra, bigger chores to earn more. Things like shoveling snow, raking leaves, pulling weeds. Regular chores around the home were expected to be done without being tied to allowances because they needed to know it’s a part of living in your home. Things like sweeping and mopping, dishes, and bathrooms. When they turned 16 we encouraged them to get a job. We also raised their allowance to more than their age. Not by much but to a sum that was more realistic. If I recall it was $20 at age 16 every two weeks. They were expected to pay for their own extras like going to McDonalds or Starbucks at this point. We always covered personal needs, school activities and gifts for birthday party invites. We have always encouraged saving and giving a portion of all money they received but never forced it.
AD says
We do give our kids an allowance, it’s not much though. Currently $4 a week each, started at $2 when they were much smaller. They each have a daily chore, setting the table and sweeping the dining room, and emptying the dishwasher (putting away the clean dishes).
We don’t expect them to buy anything necessary, only if they want some candy, or some toy or game when it’s far from a present-getting occasion. They usually get some cash from relatives around birthdays, Christmas, Easter, Halloween etc (like $5-10, more for birthday or Christmas). If there is something really expensive that they really want, they contribute some of their saved money to get it. At Christmas my son wanted a new tablet, so he put in $50 towards it and we put in the $100 plus the tax. That was his main gift with a few smaller things like books and a tablet case. And his stocking.
My daughter is very good at saving, and has put several hundred dollars away in her bank account, my son is a couple of years younger and much more spendthrift. But he will save money for things he really wants like the tablet.
I don’t think they need a big allowance as we pay for everything and if there’s an occasion like a school trip that needs a bit of spending money we will give them some rather than dipping into their savings.
As they get older they will have more chores and higher allowance. I don’t think that small children need a huge allowance and I don’t think that kids should be expected to pay for necessities out of their own money.
Judy says
I have three kids, now ages 15, 17 and 20 and it took us several tries but we finally hit on what was a perfect allowance system for what we wanted to teach the kids about managing money. We give them a set amount each month – it was something like $30 in elementary school, $45 in middle school and $60 in high school – because their social spending needed to come out of the allowance and there’s more of that as they get older. From this allowance they are also responsible for saving (in an bank account) $20 per quarter and donating $20 per quarter to a charity of their choice. That forces some planning and management over a shorter 3-month period. And it also gets them thinking philanthropically. Finally, they are also responsible for purchasing birthday gifts for one another from that allowance ($20 per gift) which requires longer term planning. We also use Greenlight which is a debit card for kids that we fund which has made life so much easier in this increasingly cashless society. Good luck with whatever you decide!
Laura says
My brothers and I were raised without allowances. We were expected to do household chores, no questions asked. We got money for birthdays and Christmas and Easter, and the expectation was that we put it in our piggy banks which generally collected dust on some shelf or desk. When the piggy banks got full, we’d take the money to the bank and deposit it. We were not raised getting gifts outside of Christmas and birthdays at all, so we learned pretty quickly not to ask for things we saw on TV or at stores.
All our needs were provided for. My parents paid for everything. We lived very frugally and rarely ate out, never had designer clothes, didn’t go on expensive outings, etc. My parent compensated by taking us on vacation every summer and paying for our activities during the school year.
Occasionally we’d want to use some of our cash on something, and that was okay. I remember finding a $20 bill outside our house (!) and purchasing a $17 movie which disappointed me greatly. I felt so much regret and learned a huge lesson about spending money on things that only provide temporary entertainment.
I babysat for various neighborhood families from age 12 and got a “real” job age 17, but I wish my parents had pressured me to get that real job at 15 when I could legally have it. The accountability of having a boss, a timesheet, a uniform, etc. was really formative for me. And getting a paycheck was SO empowering, especially as a young woman who’d seen her father as the breadwinner while Mom stayed home with the kids.
All this is to say, I really don’t think an allowance is necessary at all, and it may complicate things. While my brothers and I had friends with allowances, we understood that in our family it wasn’t a thing. We didn’t want for anything, so it wasn’t a problem. If we wanted money beyond holidays and birthdays, we’d have to work for it.
Such an interesting topic! I look forward to more posts like this one.
Kristen says
My kids are older (twin boys who are 15). Each month they get $150 on their debit cards, but $50 goes to their train pass (they commute to school by bicycle and train). About $20 dollars/ month goes for groceries for the house, usually they get dinner out one night when we are out, and the rest is for them to spend. They don’t have a chore list but are expected to keep their areas neat, and to help out around the house. They are pretty good about doing stuff — if they make themselves something to eat, they always clean up the kitchen. Last week I was out with one son for an appointment, and the other son took the trash cans (garbage, recycling and compost) without a reminder. A typical example of how they help is last Sunday, when one went to the farmers’ market for us (we gave him extra $ to pay for produce) and he also planted a few vegetables in the garden. They are pretty self sufficient, which is one of our goals.
Tess says
This is really helpful and fascinating to read! Especially the comments. I remember getting an allowance, a small one, but it was never consistent. In middle school we got savings accounts for birthday and Christmas checks to go into, but I never had to use my own money to buy things, even in college my parents were super generous. We live well within our means now, paying off credit cards every month, etc, but it does make me wonder where I learned to budget. I think my parents modeled good spending habits, being mindful that we were watching what they did. Observing sales, eating in most of the time, no fancy luxury brand items etc. I love the idea of earning money from grades for when my daughter is older tho. Glad to have read all this!
Cindy says
I highly recommend the book “The Opposite of Spoiled.” It’s a great perspective on giving allowance as a financial learning tool and not tied to chores – this is ultimately the system we’ve adopted and it’s been effective for the past few years with our kids!
Dayna says
I also recommend the book “The Opposite of Spoiled”. It talks about the importance of talking and teaching your kids about money from a young age as opposed to it being a secretive thing that no one talks about (like it was for me growing up). It also has great advice on allowance, chores, etc. and how to approach those situations. I’m going to start implementing with my 5 year old!