Allowance: Sharing Costs Are Teaching Tools for Children

There are numerous benefits to establishing a set amount of money to be earned by your child. Some call it an allowance but I prefer to call it paying your kids for work performed.

As the father of two children, my wife and I battled this dilemma for years, debating whether our children should just receive a weekly allowance or whether there should be some strings attached. We have also worked with our children on what we call "cost-sharing."

The fact is that chores are good for children. Feeding and watering the dog, folding laundry and keeping their rooms clean are just a few of the things our girls - ages 11 and 5 - are expected to do. Sometimes they do those chores well. Sometimes they don't.

And, their pay usually reflects that.

We established a maximum amount that could be earned by each child, according to their ages. For example, our 11-year-old can earn up to $11 per week (a dollar for each year, obviously). Her chores for a week might include: Bathing the dog, helping prepare meals, keeping her room clean and scrubbing her bathroom. Depending on how many of those chores she completes and how well she does the work, she's paid accordingly.

Our five-year-old might have chores consisting of folding laundry, feeding the dog, bringing her dirty laundry downstairs and organizing the pantry. She, too, will be paid accordingly. She can earn a maximum of $5.

We've found that tying our children's allowance to chores has instilled a sense of pride in their work habits. Depending on how well they've performed their duties - and they always know the answer beforehand - they know about what to expect in payment. The practice has motivated them to be thorough and finish what they begin.

Of course, there are still chores they're responsible for completing that aren't tied to payment. They're simply things we feel they need to do to contribute to the overall workings of our household and family.

Payday is usually a fun time for them. Once they receive their money, we ask how they plan to use the money. We encourage them to save part, spend part on something they want, and use a portion of it to give away. This little game has allowed them to think about their money and develop a spending plan.

We don't advocate forcing children to entirely pay their own way in everything they do. We do, however, set boundaries on how much of our family's money we're willing to spend on their extracurricular activities. For example, if our daughter wants to go rock climbing at the local gym - a cost of roughly $20, we might offer to pay $15 of that if she's willing to cover the other $5. This has allowed her to value her money and decide if rock climbing is really what she wants to do that day.

We used the same formula with her summer camp. In the past, she's always been allowed to stay at camp for a one-week session. We paid the $200 cost. This year, she insists she needs to stay at camp for a two-week session, which costs $375. Our agreement was that she pays the deposit ($100) and we'd pay the remaining $275. She agreed and we found that it was really important to her.

We're pretty sure she'll value her time at camp even more this summer.