Most of us would probably agree that allowances teach kids good money-management skills. The tricky part is setting up the allowance so that kids learn about earning and budgeting money. How much is fair pay for an allowance? Should all chores be reimbursed? Which chores should be paid for? What items should kids spend their allowances on and what should parents buy? Here's a Q-and-A guide to answer those questions.
Should all chores be reimbursed?
No. A child should not be paid to care for his own belongings (clean the room, care for his pets, pick up his toys in the family area). Just as it's not healthy to wait on a child and do everything for him, it's not healthy to teach him to expect payment for every task done. Children should not be paid to do homework, either, but a rewards are a nice way to praise them. Taking a child out for ice cream or buying her a new book; those are good rewards. I don't advise setting a price tag on grades, though. That's not setting him up for real-life experiences; no one pays adults to clean up their own messes and practice self-care.
What chores should be done non-gratis?
Besides self-care chores, kids need to learn that some chores are done as part of family home maintenance. Before and after meals, for example, each of our children helped with before-meal preparation and after-meal clean-up. They also assisted with laundry and general clean-up. These are not paid chores; they are part of family life.
What chores should be paid for?
I pay a set weekly allowance. After self-care chores and family chores, my children have certain paid assignments. This varies with the age, schedule, season and interests of the child and our evolving family structure. As our children get after school jobs, the younger ones take over the parent-paid tasks. Right now, our youngest daughter folds all the family clothes and distributes them to peoples' rooms. She also vacuums the house weekly. Yard work, shed and basement cleaning, painting and home repairs are paid, were usually paid, too. To earn extra money, I pay her to knit washcloths for us. When our eldest daughter was home, babysitting for siblings was a paid-for task. Older kids should not be expected to provide large amounts of child care without reimbursement. They also take better care of their siblings when they are paid. Our kids agreed that their sister was the best babysitter they had.
How much should kids be paid?
To answer this question, parents first need to determine what kids are going to be expected to pay for with their allowances. I pay $8-12 a week for depending on how much work was done. I usually give a tip if the work is well-done.
What should kids have to pay for?
25 percent goes to long-term savings, 10 percent for short-term savings for specific items and 10 percent for tithing or donations (to encourage generosity). For the short-term specifics, kids have to save for a few cycles before I allow them to make the purchase. Occasionally, I'll float a loan but I don't encourage spending ahead of earning). From the remainder of the allowance, our children paid their portion of the cellphone bill (if they chose to have one). Movies, after-school trips to coffee shops and birthday presents come from the allowance. I'll buy basic cosmetics, clothing and needs, but specialty items must be paid for from the allowance. I provide the necessities and a few treats; they pay for their luxuries. I encourage choice-making, tracking expenses and comparison shopping.
Using these methods, I've raised four money-savvy, penny-pincher kids who know how to spend wisely and save. For a more comprehensive look at kids and allowances, I recommend From Piggybanks to Paychecks, by Angie Mohr.
