An Answer for Every Allowance Question

Cheryl Lock

An Answer for Every Allowance QuestionAllowance is a tricky topic. There’s a lot to figure out, like what age to start, what amount to give out, and whether or not to tie it to chores.

To help you wade through all your options, we consulted with Ellie Kay, family financial expert and author of “The Sixty Minute Money Workout,” to answer all those pressing questions concerning allowance.

LV: Should you ever tie allowance to chores?
EK: No. Kids should learn to do chores as part of a good work ethic, and because they are part of the family, not because of how much they are getting paid to do them. As a mom, I wanted my kids to take out the trash because I said so. If I paid them for chores, then a simple request might turn into, “Well, how much will you pay me for that?”

LV: At what age should you start giving out allowance?
EK: Every kid develops at a different rate, but most can understand the concept of an allowance starting at around six years old.

LV: How should you help your child manage that money?
EK: When your child is young, she will need your help to learn how to save. Start teaching her the rules as soon as she starts getting money: For example, put 10% in savings, give 10% to charity and manage the other 80% wisely.

If your kid wants a toy, make her save up to buy it for herself. “Kids take much better care of an item they’ve invested in through hard work and saving,” says Kay. “This will eventually translate into a good work ethic later in life.”

LV: How much allowance should you give?
EK: This is going to vary from family to family based on budget, but it should be tied to how old kids are. So, while older kids may get more money, they’ll also need to start paying for more things out of their allowance. A good rule of thumb is to give a dollar per year of age. For example, that would mean an eight-year-old might get $8.

Additionally, while weekly allowances tend to be the norm, we also think it’s fine to do it every other week. Just be consistent, so your child knows he can count on the same amount on a regular basis.

LV: If I’m not paying her to do them in the first place, what should I do if my child isn’t doing her chores?
EK: We don’t pay our kids to do chores, but we do pay other family members to do chores when one child isn’t doing hers. For example, when my son was 10, he left the house without making his bed for several days in a row. So we had his 7-year-old sister make his bed for him. On allowance day, we gave our son his allowance, and then he had to turn around and give his sister 50 cents for every day she made his bed.

Not only did he lose money, but he also had the pain of giving his money to his sister. He never left his bed unmade again.

LV: I’ve already been paying my child to do chores. How can I transition into not paying him for them anymore?
EK: Call a family meeting where you sit down and explain the new policies. Tell your child that you are going to give an allowance that isn’t based on chores, then outline the consequence for not doing them (as above with my son). Stress that allowances are a privilege and not a right. Also stress that kids are expected to do chores because they are a part of the family, but they can do special jobs (as determined by you) that go above and beyond their normal chores for additional money.

  • Bill Dwight @FamZoo

    Clever twist to have the sibling who did not do complete chores pay the other – hadn’t heard that one!

    While age-based allowance is very, very common, I prefer to base the allowance amount on a rough budget that documents what the child is expected to purchase/save/give. That way, it isn’t arbitrary (and it’s a good intro to budgeting). More info here:

  • John Butchum

    We use to rotate chores– keeps everything fair, is free, no one has to do anything like schedule or assign, it just rotates the chores.  The kids no longer whine, they seem to like checking the chores off their lists, and they like it that WE share in the rotation, so they get to pass chores to US too!  

  • Jess

    I saw this on line from a friend today:
    Want today’s Wi-fi password? 
    1. make you beds
    2. vacuum downstairs
    3. walk the dog 

    I thought it was an interesting cute Idea for tweens and teens. 

  • Tom

    I’m really new to the allowance thing and never got one as a kid.. So with my 5 and 7 yr old children.. If allowance is not based on chores.. What is it based on?
    Thanks for the allowance wisdom..

  • Jen

    It’s a stretch to claim you aren’t tying allowance to chores when you make your son use his allowance to pay his sister for completing his neglected chores. Besides, you’re not saying that receiving an allowance is a right that children deserve no matter how they behave, are you? In my opinion, receving an allowance is a privilege. Performing chores is an obligation. When you don’t fulfill your obligations, you lose your privileges. I give my daughter a weekly allowance. I do not pay her to do obligatory chores. I do, however, dock her allowance, ground her, revoke treats, or dole out other appropriate punishments as consequences for bad behavior. It works. The child is helpful, happy, well-behaved…and has a little pile of money in her dresser drawer.