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Ask DSM Readers: How Do Allowances Work in Your Home?

by Tara Kuczykowski on October 21, 2010 · 31 comments

allowance for kidsPhoto by Philip Brewer

Every week I'll pose a question for you to share your experiences and tips. If you have a question that you'd like me to post, I'd love to hear from you!

Last week, Trent from The Simple Dollar had a great post about what he believes allowances should or should not pay for. In response to a reader question, Trent writes:

For us, the rule of thumb is simple: the parents take care of basic needs, period. Basic needs means food, water, clothing, housing, school and field trip fees, and so forth. While our children remain at home before college, we will provide these things for them without any impact on their allowance.

However, we will often provide for just the basic needs. My children will always have clean clothes, but the shirts might just be generic t-shirts and denim jeans. My children will always have food, but that might come in the form of a sack lunch instead of $10 to spend at McDonalds.

Expenses for “wants” either come out of their allowance or are earned in some fashion.

Mandi at Life...Your Way has also talked recently about allowance, chores and money management and whether allowance should be tied to chores or not.

Our oldest is eight years old, so this is something that's becoming a hot topic in our home, and I'd love to hear your thoughts!

Do you give your children an allowance? Is it tied to chores or just a set amount each month for being part of the family? Are they expected to save or give a certain amount out of their allowance? Is their allowance just fun money, or do they have to pay for certain necessities out of it as well?

Join the discussion -- add your two cents to previous Ask DSM Readers questions too!

{ 31 comments… read them below or add one }

1 Toya October 21, 2010 at 11:25 am

Allowance in my home is not given out for chores!!! I don't get paid to cook and clean so why should the kids.However I do pay allowance for things like feeding the dog, or taking the dog out, because you have to give kids something that they can work for to gain money and it teaches them responsibility. Just like we have to go to work to get paid, they do to!

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2 Stephanie October 21, 2010 at 11:25 am

Every two weeks my kids get paid the same amount as their age. Age eight=$8
Age three=$3

They do five chores a week. Example-empty dishwasher, vacuum or pick up toys. Each chore is adapted to their age.

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3 Prudence October 21, 2010 at 11:28 am

My kids get a modest allowance that is not tied to chores. They can do "extra" chores to earn "extra" money. There are certain chores they are required to do every week because they are part of the family. We decided not to link the allowance to chores because the chores they do daily or weekly are not optional. What if the kids doesn't really care about the allowance on a given week and tries to opt out of the work? Then what?
Also, we have been very clear on what mom and dad will or won't pay for. We do not pay to rent movies, go to movies, toys, etc. and the kids are aware of that.

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4 Wendy October 21, 2010 at 11:32 am

My kids do a handful of chores each week (beyond just keeping their room clean & toys cleaned up). We give them allowance every other week. Their allowance is divided into 3 parts - save (goes to their bank savings account), share (can go to church or any other cause they want to support) & keep (goes in their wallet & they can spend as they choose).

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5 Laurie October 21, 2010 at 11:34 am

I would love to know: @ what age did you, as parents, start these arrangements?

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6 Michele October 21, 2010 at 11:45 am

My son is 6 and wanted a Nintendo DS; I told him that if he wanted something like that he would have to save up his own money for it. We had a yard sale and he sold bottled water and drinks and I let him keep the proceeds ($44); he also got to keep the money from his toys that sold ($72). I then told him I thought he was old enough to start doing a chore for an allowance. He gets $1 for every day that he clears his and his younger sister's dishes off the table and wipes it down. Even though I usually have to go back and wipe it off again-it is teaching his responsibility. I don't nag and remind him to do it. If he forgets or just doesn't feel like doing it-no dollar for that day. He has to keep his room clean and help put away his laundry; those are non-paying chores. He saved up enough money for his DS and has been thrilled about saving up his allowance ever since. Any time he says he wants a toy-I tell him that's fine but it will be coming from his allowance money. He usually decides against the toy and opts to keep saving for something else instead. It makes shopping so much easier when he is thinking about spending his money instead of mine.

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7 Amanda October 21, 2010 at 11:48 am

I like Dave Ramsey's idea of commission for chores. In our house there are things you do just because you live here and there is extra things you can do for commissions.

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8 Stephanie October 21, 2010 at 11:48 am
9 *kate October 21, 2010 at 11:49 am

I started giving my daughter an allowance as soon as she started begging for things in the store. For a long time, she was okay with just looking at things in the store and then around age 3.5, she started begging and whining to take things home.

We give her 50 cents every Monday. The allowance is not tied to any chores, it's just what she gets as a member of our family.

I can't say she has stopped begging and whining for things, but it does stop when I tell her she can go home, count her money, and if she has enough, she needs to remember to bring it the next time we go to the store.

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10 Jessie October 21, 2010 at 12:00 pm

My kids get an allowence which is not tied to chores, and they do not have specific chores which they must complete. Instead, I tell them that all members of the family must pitch in, and they have to help with whatever chores I need done at the time. I don't want them to think they are only responsible for themselves - all family members must contribute towards the family.

We set up an allowence system to teach them the value of money, and it has worked really well. They get a largish allowence, but they must use it for all the "extras" they used to ask us for. For example, a book order form coming home from school, or a new video game. I have found that they want far fewer things when they are the ones paying!

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11 Becca Filley October 21, 2010 at 12:01 pm

Our daughter is 9 and gets $5.00 a week. This is tied to her chores. She knows everyday she must unload the dishwasher, make her bed, and feed the cat. If I have to ask her more than 2 times to do them, the $1.00 for that day is taken away.
She must always put at least half into her savings account each month, and now that she sees it adding up, she usually just asks me to put all of it in the bank. She earns prizes at the bank so its like an added bonus for her.
We started giving her 2.00 a week when she was 5, but she didn't really have set chores until she was 7.

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12 Reina October 21, 2010 at 12:02 pm

I have four children ranging from 6 to 13 years old. My kids have specific days for specific chores. Monday they do the laundry (laundry, folding, putting away). Thursday and monday is garbage 9older kids gather the garbage and take it out, youngert kids bring the garbage cans back inside), Friday they pick up dog poop (we divide the yard for sections for them), and Saturday they need to clean thier rooms, bathrooms, and "their" family room (it is all in the basement), and vacuum. They also need to help in the kitchen daily - mostly unloading, loading dishwasher, sweep the floor and wipe down the counters. If they do their chores in timely manner they get their allowance Satuday night (it is very minimal - around $5). If not...they still have to do the chores next day, but they do not earn the allowance. They can also earn extra money...mostly doing yard work (mowing lawn, raking, ect..). This works very well for our family, the kids learn how to take care of the household, adn older they are getting more helpful they really are! They also do very well having same chores consistantly - often they do them without even reminders (becasue they want to be done with it).

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13 Kristen October 21, 2010 at 12:04 pm

We don't give a set amount each week, but have jars for each of our three kids (ages 7, 4 & 2). When they get $ from grandparents, etc. in the mail, they go in there. If they do extra jobs around the house, we'll add to the jar. It's amazing how quickly, "Mom, I HAVE to have such and such" is quickly removed from their priority list when I answer, "Sure! You have enough money in your jar for that." My 7 year old is saving up for a Lego Mindstorm and he is over 1/5 of the way there. I am amazed at how much he's willing to forego because he has that as a priority. And makes them realize that extras don't necessarily come out of Daddy & Mommy's "jar" ;)

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14 Thomas October 21, 2010 at 12:06 pm

My daughter started her allowance around 6 years old, she got a certain amount per week ($6). Out of that amount she tithed 10% and saved 20% she kept up with the bank book so she was excited about it. The rest was her money to spend ANY way she wanted. A lot of things she wanted went away when she had to pay for them. It was not tied to chores, I didn't want her to think she could give up the money and not do chores.

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15 Lisa October 21, 2010 at 12:07 pm

We use http://www.firstkidbank.com to track allowance and I highly reccomend it. You can set it up to be based on whether or not chores get completed, or as an automatic "deposit." It's all virtual so no real money is exchanged. It let's your child save and keep track of his 'cash' without having actual cash around. I can check his balance on my phone if we're out and he wants to buy something.

We base our son's (6) allowance on him doing a few minor chores and his getting ready in the morning/for bed without us having to nag him.

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16 Kerrie October 21, 2010 at 12:14 pm

I'm just starting allowances. My oldest is 6 and wants to do everything and doesn't understand we can't even if we have the money. That is the main purpose I'm doing.

I'm teaching my kids to give 10% to the church (or charity if you don't have a church) and 20% for savings like college or something. And then I have other banks that they can put in what ever they want. In my church we pay for our own missions (if you can't afford it you can still go) So we will have a family mission fund bank they can donate for anyone who wants to go on a mission. We have a disney bank that my daughter has been saving money for forever (a few years ago I told her it cost money to go to disney world, she found a dime on the floor and said, "Yay! We can go now!" So I gave her a bank, and told her when it reached the top we could go. Let's hope I'm ready when she is.) And then she has a special items bank. It counts the money as she puts it in. When she decides if there is something specific she wants we'll write it on a label with the amount she needs to save.

So...
*10% tithing (or charity if you prefer)
*20% savings (could be more if you can give your child more money a week)
*Special Item Savings (they can put what ever they want in it)
************
Then they can help the family reach a goal which will make them appreciate it even more. For us:
*Disney Vacation
*Family Mission Fund

I know it sounds complicated, but so can be the real world. I feel the younger they start learning about how to handle money the better. You'd be amazed at what your kids can learn. And the better prepared they can be for life with habits they have learned since they can remember. So saving will be second nature to them.

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17 Becky McGarvey October 21, 2010 at 12:16 pm

Until my kids are old enough to work outside of the home, they will NOT be receiving money for their work. One of my kids is 17 and she has started her own cleaning business for which she receives payment from friends and family. If they get "birthday money" or "Christmas money" they use that for wise investments they would like to make throughout the year. This summer my 11 year old bought supplies for a lemonade stand and she made profit that way.

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18 Rebecca October 21, 2010 at 1:02 pm

My three year old gets "commission" (paid for work done) as opposed to an "allowance" (money just for "breathing"). There are certain things he has to do because he lives in our house (for example, making his bed, helping clear the table after dinner, and picking up his toys). Other things (helping put away groceries, helping take out the trash, helping Mommy with housework, and a few others) are listed on his sticker chart. He gets a sticker for each thing he does and on Saturday, he gets $1.00 if he has at least 12 stickers (avg. of 2 things a day). If he has at least 15 stickers, we give him the $1 plus a 25 cent bonus. He takes 15 cents to church the next day for offering and the rest goes into his "toy budget." (On Monday, we took him to make his first purchase--Henry from the Thomas the Train series. He was so proud to walk out of the store with HIS bag and his receipt.) Sometimes he doesn't want to do a job on his chart when it's time to do it and I'll say, "Well, I guess I can do it and I'll get your sticker." He immediately will come and do it right away. It's great motivation to do work and he's beginning to learn the value of money. The things on his chart will change from time to time and the amount he gets will go up as he gets older. Also, we take the money for his commission from our clothing/toy budget. Basically, he's working to earn the privilege to spend a very small part of our family budget how he wants to. By taking it out of our family clothing/toy budget, we don't have to find room in our budget for his commission. Others may not agree with how we do things, but this is what we've found works for us (and it greatly reduces the "gimmes"--I want this toy, I want that toy--now we say, you'll have to save your toy budget.) We, of course, provide clothes, food, shelter, etc., and even a few toys for no special occasion in addition to b-day and Christmas presents. Our purpose is to teach him the value of money and the joy of saving up to buy something he wants.

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19 christy October 21, 2010 at 1:14 pm

I have a 6 and 3 year old, they each get $10/week for allowance, they don't have to do chores to get it. That is their money and they don't have to spend it for anything they want. If they are naughty, I do take money away. They like to deposit every week to see their savings accounts grow!

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20 angie October 21, 2010 at 1:41 pm

My 3 boys do not get allowance. My now 9 yr old started selling candy bars when he was 7 yrs old. He has expanded to other candy and ice cream treats. He saves a certain percent in a savings account for college, and to continue his business. He is allowed to spend a certain percentage of it on whatever he wants. My 7 yr old has now started his own business selling soda. He saves and spends the same way his brother does. Once my 3 yr old gets older, he will probably do the same thing. It is very nice that they have their own money that they have earned. They still have chores to do at home; and it has been explained to them that I am not paid to do chores, so they are not either. Having their own businesses has made them more aware of how to save and spend money; and also to value the things they buy. They treat the things they buy better since they worked hard to buy them. Now they save up for something they really want and I get less of "I want it!" at the store.

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21 Terri October 21, 2010 at 1:41 pm

When I was growing up, my parents made it clear to my brother and me that there are certain contributions that we were to make just because we were part of the family (e.g., making our beds, keeping our rooms clean, etc.). However, we DID get allowances commensurate with our ages for doing special things like weeding the garden, washing the cars, etc. I think it's very important, probably more so than ever, to teach kids the value of money and to tie getting a dollar to the work associated with it. Too many kids feel entitled to getting whatever they want with minimal (or no effort) because their parents haven't taught them to earn what they want, and the value of sacrifice in order to get it. Bottom line, allowance is important but so is having kids contribute to the family for no reason other than because they're a part of the family.

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22 Jilly October 21, 2010 at 1:45 pm

We just started doing an allowance with my 5 year old. He gets $5 a week, which he usually saves up and spends every 2 weeks. There are certain 'chores' that he must do: cleaning up after himself, putting toys away, clearing his dishes after dinner etc. The allowance is mostly for him helping with other jobs: taking the recycling out to the bin each night, helping with laundry etc. We also put any spare change in the house into his bank.

We don't make him save or give away any of his money. He makes those choices on his own. He knows if there is something he wants that costs more than 1 week's worth of allowance, he needs to keep saving for it. He also took it upon himself to donate all of the change in his bank to the Leukemia and Lymphoma collection for his school.

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23 Stephanie October 21, 2010 at 1:55 pm

We do give allowances and do not tie them to chores, but like others, sometimes give extra money for extra chores. When trying to decide how much to give, we settled on what I read somewhere...$1 per grade. So we start with 50 cents per week in kindergarten, $1 per week in first grade, etc, $2 per week in second grade, etc. When they get to be in 12th grade, it will be up to $12 per week, but they will responsible to pay for more things by that point in their life. Anyway, hope that helps someone...I appreciated reading other people's ideas!

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24 cwaltz October 21, 2010 at 2:07 pm

All of my children have a base allowance. They get $10 every 2 weeks. This money is specifically so they can learn to manage money. I don't dock this money at all except for if an individual damages property(They receive a half allowance until the item is paid for) . Additionally each child can earn up to $10 additional dollars every 2 weeks for specific chores(in addition to the one they are required to perform daily) around the house. This way they learn that extra effort is rewarded.

My older 2 get a clothing allowance. I let them buy what they want after setting a specific budget. Anything over that amount comes out of their own allowances. If they are thrifty then they can pocket the extra(My son used to love to hit the thrift stores so he could keep the extra for video games). I do set specific standards on what is and isn't acceptable(They are pretty good about this since they have seen me cull worn or stained products from their wardrobes and their siblings.) This was the last year of this for the oldest though. He's now 18 and gainfully employed.

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25 zelia October 21, 2010 at 6:15 pm

Good topic. I've changed my mind on allowance. I used to think of it as paying kids but now I see it as a critical tool for kids to learn about money. With the financial mess we have today, the sooner they learn the better. I see the difference it makes as long as lessons go along with allowance. Money expert Jean Chatzky turned us on to http://www.threejars.com. After comparing it to some of the other online programs it works best for us and makes it easier. I would recommend you check it out but more importantly I encourage parents to get ahead of the kids and money issue and save kids heartache down the line.

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26 Eleaves October 21, 2010 at 7:17 pm

My children do age appropriate chores as members of the family. They can do extra chores, like help with the leaves, etc. for money. I also homeschool and we have a 4 day schedule. They get a quarter for each day that they are on time for school and have a good attitude during it. If they're late or have a poor attitude they get an X for that day and no quarter. Hopefully that will help them get ready for the real world when you're late to work, your pay gets reduced.

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27 Karina House October 21, 2010 at 8:54 pm

We give a small allowance, not tied to chores. When my son turned 8, we upped his allowance to $1 a week per age, so he gets $8. However, he is responsible for tithe, giving, saving, and gifts. He made a list of everyone he wants to give gifts to, and the occassions (birthday, Christmas, Mother's Day, etc) and how much to budget. Then we added it up and divided it by week - so now he saves $4 per week to cover his gifts to family. He still gets about $1 a week to spend on whatever he wants and he saves up for things. Any extra money he earns or gets from Great Grandma he can spend. It's a great way to start him learning how to budget, and the value of his money. As he gets older I'm sure we'll add in things like clothes and such, but he just doesn't desire those things now.

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28 kathy October 21, 2010 at 10:18 pm

I have doing allowances for 7 years now. As most everyone else. The kids are expected to do certain chores as members of this family. As they get older I give them more responsibility to use there own money for. My oldest will enter jr high next year and he will be given a monthly budget to cover everything (we will make adjustments as needed) he will have to think about paying for school lunches, outings with friends, annuals, club memberships. If he comes up short he can get a loan but it will be deducted and he will have to decide what to give up the next month to cover the cost. When he enters 9th he will have a debit card to use to learn how to balance his checking and building a budget for gas, dates, and outings with friends. It's amazing how over the last year I don't float loans for toys, electonics. If we get to the register and they don;t have enough they have to decide what to put back. One thing I have taught all 3 is to check prices at several stores before buying. They now want to check toy's r us, target and walmart before they spend their money. Another thing they have started doing is checking the Sunday paper ads to see if something they just brought went on sale. If they see that a store put something on sale they just brought they ask me to take them back for a "price adjustment". They have learned to check for coupons online before buying.

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29 Jennifer October 27, 2010 at 4:26 pm

I read Trent's post, and another one regarding allowance on another financial blog and I have to say.... I find the idea of not paying children for chores very strange. My daughter is 16 and she's been paid for her work ever since she was a toddler. That's the way the world works - you do your job, you get paid. You don't do your job, you get fired!

Perhaps the problem is the definition of the word "chore". To be sure, there are things all of us must do that are simply a part of living - making our bed, putting dirty clothes in the hamper, etc. I don't call those things "chores". The work that must be done around the house so all of us can live in a clean, organized home, are chores. Dusting, vaccuming, raking leaves, etc.

Who pays me to do those things? I do! Every time I go for a girls' night out, or for a weekend getaway, or anything else fun, I'm "paying" myself for the hard work I've put in around the house. A child has no way of rewarding himself for that work except what his parents extend to him. And that's where an allowance comes in.

An allowance is absolutely critical to teaching a child how to handle money. And that starts with the knowledge that you get paid to WORK, not simply to exist.

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