Children, Allowances and Chores: Setting an Allowance for Your Child

Allowances are an excellent way to start teaching children about money. Children need to learn the value of money, and learning the value of saving money as well. As a bonus, allowances and money management can help with math skills!

Many people believe that chores should not be used as a basis for allowances. Rather, chores have an importance all their own in that they teach children to be responsible members of their families.

Some families do believe in a connection between chores and allowances. In that sense, it is the completion of assigned chores that will earn the allowance.

The most important things to consider might be which will be the best way for a child to really learn about money. A set regular amount of money given each week will help teach children about saving and spending. If an allowance is based on chores, and chores are not completed, the allowance will not be given. Consider that a child may not learn as much about money management in that situation. And chores in themselves might become an issue, overshadowing the valuable lessons children can be learning about managing money on a regular set basis.

Ultimately, every family needs to discuss and decide which methods will work best for them.

Here are some tips and ideas for allowances and chores

Chore Ideas

Empty trashcans inside the house

Take garbage cans to the curb on trash collection day (older children)

Keep bedroom clean

Make bed

Set the dinner table (or breakfast/lunch)

Clear dishes

Wash dishes (older children)

Wipe counters and sink down

Put away groceries

Another variation of assigned chores could be letting the child prepare a list of jobs that he/she is willing to do for that week, and the cost for each job. Parents and children can decide on the best choices together, make a list and put it up. As each job gets completed, you can pay your son or daughter on the spot, allowing them the fun of adding their earnings to a jar or some special box. At the end of the week, they can count their money earned.

Allowance Amounts

A dollar for each year of age seems a common allowance amount, with a raise on every birthday. I know some parents who decided on one half the child's age as the amount. A good rule of thumb is to figure out about how much money you already spend each week to buy this or that for your child, and use that amount as a guide.

Another idea is to set the allowance amount you think is fair, with the stipulation that an agreed proportion of that amount goes into a savings account. The remaining money should be the child's to spend as he/she wishes. At the end of the year, parents can match the amount of money the child has saved.

Starting Age for Allowance

Families will have different ideas on this issue as well, but keep in mind that even preschoolers can learn the value of "A penny saved is a penny earned!"