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Allowances: Earned or Given?

by Emily Guy Birken

Though my son is not yet a year old, I’ve already spent a great deal of time deciding how I will teach him about money. We’ve already set up a piggy bank in his room where all our spare change goes. We half-jokingly call it his college fund, and we roll up those coins once a month or so to deposit the money into his 529 plan. I sit him on my lap while I balance my checkbook, hoping to include him in the weekly routine for many years to come. And I know that when he’s old enough to handle it, my husband and I will be giving the peanut a weekly allowance.

No one will dispute that giving children an allowance gives them an opportunity to learn about money, saving, spending and delayed gratification. However, there seems to be some disagreement on whether that allowance should be tied to chores—and therefore earned—or if it is simply given each week. Here are the pros and cons to each side of the allowance debate.

Why Kids Should Earn Their Allowance

Pink Piggy Bank

Should children earn their allowance?

If the point of allowances is to teach children about money, then the most obvious reason to make allowances chore-dependent is so that your kids learn that money isn’t free. It’s very easy to imagine that children who do not have to work for their allowances will grow up feeling entitled. In addition, by tying money to chores around the house, children will learn that they can earn more money for more work—a great lesson.

A further positive aspect of the allowance for chores rule is that it can also help children to learn how to become more competent in a job—and to learn that they can ask for raises if they are doing a better job than they used to. Learning these difficult lessons at home will make your child more confident in his first job, and throughout his career.

Why Kids Should Be Given Their Allowance

On the other hand, there are several issues with tying money to household chores. The first is the inflation of rewards for things that your children should already be doing. Being part of a family means doing chores for the good of the family, not because there is a financial reward.

In addition, there are many children who are simply unmotivated by those sorts of rewards. For these kids, no amount of money is worth the ability to ignore tasks. So tying money to chores also ties your hands when it comes to disciplining children for not pitching in.

Finally, appointing yourself as your children’s boss can be tough for parents who aren’t naturally organized. If you pay Junior and Sis for different tasks, will you remember who did what and when? Many parents end up instituting a chart system to keep track of the chore schedule and payment—but if this is not your cup of tea, you may end up teaching your kids that lying about work is a good way to earn money.

When it comes to my peanut, I will probably not tie his allowance to chores. The important thing for our family will be to remain consistent about allowances, and making it clear that our child will use his own money for “wants.”

What are your thoughts on giving your children an allowance?

photo credit: kenteegardin.


Published or updated December 30, 2011.
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{ 4 comments… read them below or add one }

1 Betty

I am teaching my daughter (now 12) that doing chores is part of being a member of the household. Everyone must chip in because everyone makes a mess, wants a clean place to live, and that dog doesn’t feed herself! She has items she is responsible for such as keeping her room clean, certain dishes, and helping with laundary. I have not made a direct line between her allowance and her completing her chores. However, when she does something above and beyond either in the house, her grades, an award at school I bump up her allowance and explain why she got the increase that time.
I am also making her us her allowance for the “extras” (Iconic Boys poster or even more glitter pens). She knows what I supply for her and if she wants something over that she needs to pay for it.

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2 KDB

We’ve tried both and neither has worked the way we want it to. So now we help our kids get small jobs in the neighborhood, or help them sell their stuff they no longer want, or even pay them for jobs around the house, especially those that one of the adults should do but don’t for whatever reason. So it becomes payment, and not an allowance. This seems to teach a better lesson to them about how to make money in the real world.

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3 Bill at FamZoo

Good points on both sides of the age old unconditional-allowance vs pay-for-chores debate. We do something in between with our kids: we pay a regular allowance but we assess penalties to their Bank-of-Dad accounts when they blow off their chores (more of a “chore-fail” chart :-). The idea is to minimize having to check stuff off and still hold them accountable. Here’s the visual:
http://www.flickr.com/photos/famzoo/5580269279/in/photostream

The other thing we do is give them a separate allowance for a specific area of spending that we would normally pick up – like clothing. We agree on a budget and then turn the spending decisions over to them (with some minimal veto power). They have to live within that budget and deal with the consequences of any bad decisions. Here’s a visual for that:
http://www.flickr.com/photos/famzoo/5734793576/in/photostream

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4 Joe

A child should to the rewarded to the degree of participation in the running of the household.

A child that is just given money will sooner or later rebel for there being no fair exchange for that money.

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