Kids and Allowances: What’s the Best System?

by Reader Contributors

When it comes to kids and allowances, what’s the best system? Should a child’s allowance be tied to chores? Or not? Frugal parents weigh in.

Dear Dollar Stretcher,
I have a question for other parents.

We are wrestling with the question of allowances. I have read all the articles I come across on them, and one theme that seems to be running throughout is “do not tie an allowance to chores at home”. That is one thing that I thought allowances were all about – do the chores, get the allowance. Otherwise, it seems to me that the kids are getting paid to breathe, eat and walk . And that is not fair to parents. Even the smallest child who gets an allowance can do little things, such as bring the trash to the garbage can.

The route that we want to take is that they must do their chores and if they are told more than once, they have to pay us back a quarter. We’ll be keeping a tally and at the end of the week when they are paid, they will have to pay us back. What are other parents using as a system for paying an allowance?
Susan W.

Bonus Plan

I wrestled with the allowance question for years and balked at the idea of paying my daughters to do chores. Finally, I realized that their allowance was similar to the “play money” my husband and I use to buy paperbacks, golf clubs, etc.

Everyone in the family needs a little money of their own, so the girls got a set amount each week which changes as they get older. However, there are chores that I hate to do and as they were old enough to handle them, I’d pay the girls to do those. On the other hand, if I had to do any of their chores, they had to pay me. (No nagging, the work had to be done when it needed to be done AND done right) – similar to the adult fact of life that “the only time you can get out of chores is by paying someone else to do them – a housekeeper, gardener, etc.”

It’s worked great, with both girls hurrying to get their own work done, hoping to catch the other slacking and make some money off of her!
Vickie

Pay for Grades Instead

I have a friend who doesn’t give allowances. Chores around the house are something that everyone has to do, young and old and it’s not something your kids are going to be paid for when they get older so why teach them now that it is something to get paid for? Everybody lives in the house, everybody dirties the house, everybody cleans the house.

The way my friend pays her kids are for their grades. School is their job until they get older and their grades should be the most important thing to them. She pays very well for A’s and pay’s for B’s but nothing below. The kids learn how to really work for their money. I just learned this idea and I’m going to start it next school year.
Christi R.

A Stricter View

Here’s our “kid money” system, and it works pretty well.

Our kids have certain chores that they do because they are alive. I hope this doesn’t sound like we didn’t want kids, but we based it on what we wouldn’t have to do if they weren’t around. For instance, we wouldn’t have to wash their dishes, put away their laundry, or clean their rooms. These are the things they don’t get paid for. However, leaves would fall from the trees whether we had kids or not, so we pay for raking leaves. We also pay for cleaning bathrooms, washing walls, etc. We have a flat fee for things like bathrooms, where the job doesn’t vary much, and an hourly rate for yard work, etc. The bottom line is, if they want money, they work for it. That’s life. We didn’t want to instill the idea that they get money just for being alive. The amount they earn goes on a chart and they get paid once a week.

The kids like this system because they can easily earn extra money when they want something special, as opposed to asking for an increase (which they may not get!) or having to save for months and months. We like it because they’re learning a decent work ethic. The only drawback is that we can’t budget a set amount for allowances, as the amount they earn varies. But then nothing’s perfect!
Cindy, Newbury, OH

Expert Interview: Getting Kids to Complete Chores

Children’s Choice

I believe children should help out around the house for an allowance. An idea that I read about was to set a fair price on all chores in the house. Post the chores with prices attached and let the children choose the chores they want. Add up all the chores for each child weekly and pay the child for service done. The chore must be done correctly to receive credit. This gives the child some choices, and when they are really saving up for something, a lot more chores are done. This ends the nagging for parents and if the child does not do a chore? No allowance.
Debby S.

The Danger of Paying for Chores

I would not have the children pay back for undone chores. I believe that all children and adults should contribute to the maintenance of the home, period. It is just expected. The problem you will run into if you tie the allowance to the chore – and believe me I have been down this road – one week the child will decide that he/she would rather pay the fee than do the chore. You may think money is a great motivator, but playmates waiting outdoors can be an even bigger one.

I suggest looking for an alternative. Our children lose privileges for undone chores, time with friends until the work is done for example. I can’t pay anyone off to get out of cleaning the bathrooms or the kitchen. I have to get it done before I can spend my time doing things I’d rather do. I make the same conditions for my children – natural consequences.

Look at the reason you are giving the children the allowance in the first place – is it for doing work around the house, or so they can learn to manage money? I feel we all work on the house because we all live in it. The allowance is so they can learn how to manage their finances.
Julie in IN

Related: 8 Things Your Kids Need to Know About Money

Like the ‘Real World’

I read this somewhere and I think it is a really neat idea.

One mother would post “jobs” that her children could apply for. The job description would include the job duties and salary. The children could then choose the job they wanted to do, and receive payment for a job well done. Also, like the real world, you can achieve bonuses or penalties for you quality of work. This teaches your child that you have to earn money, it doesn’t grow on trees and you certainly can’t just visit the “money machine” to get it!
Doris in Pittsburgh, PA

Related: What a ‘Wish Jar’ Can Teach Small Children About Spending Choices

Two Column System

Sounds like you’re on the right road! I’ll tell you what we did, and boy did it work. Now understand that we homeschool and are here all the time, so I cannot and will not stress myself over a “cluttered” look. We live here and that’s what it looks like.

We made a chart with two columns: Daily Required Chores and Paid Chores. Under those columns, we specified the tasks that were required to be done daily (just because we all live here), then we specified those that could potentially earn them money. We feel that we all have to share responsibilities, so why should the children get paid for their daily living situations? As adults we don’t get paid for our daily responsibilities, do we? We get paid for our work accomplishments: Our job or career.

Each chore is suited to their age level and we always made sure they knew how to complete it well. As they did the daily chores, they could check them off, and the same for the paid ones. At the end of the week (pay day) they brought to us their chart and we added the total paid chores for their allowance.

Talk about motivation!!! Any time they needed some money, THEY were the ones who went to the chart. I didn’t usually have to mention the fact that the jobs needed to be done. Also to mention that I don’t have to have everything done on certain days, so I was somewhat laid back. It really works.
K.H. in Tennessee

Related: Make Frugality a Family Affair

From a Mother of Five

I have five children who do many chores in our home. I do not pay allowance per se, but I do have a paid chore chart and the children are allowed to bid a job and receive pay for doing it. I don’t understand where the modern concept of handing children money to play around with without tying it to work has come from. Nowhere else in their lives will they ever just be given money, so in our home our children have some chores that they do as a contribution to the running of our home and some chores that they receive payment for doing.

Paid chores are folding the family laundry, washing and drying the clothes, babysitting their younger siblings, washing or cleaning the vehicles, or other things that come up that I may want to job out to the children.

My husband and I put all of our change into a jar and that is where the money comes from to pay the children for these jobs. As a result of learning how to work and getting paid for working, my children have become very industrious. My oldest daughter used to do light housecleaning for neighbors and she babysits. My oldest son sells giftware through a selling club, and most likely will begin mowing yards to earn extra money.

The children are very frugal with the money they earn and research what they plan to buy to get the best quality and value for their money. I might add that my children are 13, 11, 9, 7, and 5. Even the 5 year old can fold washcloths, towels, underwear, and socks to earn some spending money.

If a job isn’t done promptly or correctly, the children do get docked for it, or if they don’t do something they agreed to and someone else does it, then they have to pay the person who did their job out of their own money.
Holly U.

Related:

• A Teen Clothing Allowance as a Money Tool
• 8 Tips for Raising Money-Dumb Kids
• 13 Things to Teach Your Kids To Make Their Financial Lives Easier
• Should Teens Have Part-Time Jobs?

Reviewed April 2021