Allowances for Kids

A Parent’s Guide to Allowances for Kids

Your kids want to make money and there are plenty of things around the house that need to be done. A child allowance seems to kill both those birds with one stone. Having your children do tasks like cleaning and organizing in exchange for money is a great way to teach them about the value of a dollar. 

They are likely to learn about spending and saving responsibly, which are habits that will benefit them into adulthood. But when should you start a kid’s allowance, how much should you give them, and what chores should they do? These are all questions that we’ll answer right here. 

What is an Allowance?

An allowance is a certain amount of money that you give to someone else for a certain purpose. This is typically done on a predetermined schedule. For your children, this usually looks like giving them chores that you will provide them with regular spending money on the condition that they complete them. 

An allowance is a great way to teach your child important life lessons that they will use throughout their lives. The value of hard work, earning paychecks, and money management are among these valuable lessons they can learn. Keep in mind that how much they learn from having an allowance also depends on how much freedom they have to make their own choices and mistakes. 

When Should Allowance for Kids Start?

An allowance for kids should start around the time that a child starts to bother their parents about buying things. This indicates that they are ready, according to Ron Lieber’s book, “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart with Money”. 

This rings true for many reasons. If your child is starting to pester you about toys that they want, then teaching them about money and how you have to earn those things is an important lesson. That indicates it’s time to start having those conversations about money. 

Pros and Cons of Allowances?

Giving your child an allowance in exchange for completing chores seems like a win-win situation. There are benefits for sure. Here are some of the top pros of giving your kid an allowance:

  • Teaches them about finances, responsibilities, and how poor financial decisions can lead to bad consequences.
  • Your kids have money for things like toys that are non-essential. Hence, they won’t be asking you for money every time they want something.
  • When an allowance is tied to chores, a child will learn how work and pay have a complementary relationship which will help set them up better for their future jobs.
  • It could teach your kids the importance of giving to those that are less fortunate if you tie their allowance system to require donations.
  • Your kids could get into a better college or receive scholarships when getting an allowance as a reward for good grades. 

There are also some potential disadvantages that you should consider such as:

  • An allowance could lead to poor financial decisions when spending their money.
  • When your child doesn’t need money, they may not be motivated to complete their chores.
  • It could undermine the importance of contributing to the family. They may view that every duty deserves a reward instead of doing the task as being part of the family.
  • You may have difficulty with providing an allowance if you are on a smaller budget.

How Much Should You Give Your Kids for Allowance?

You’re probably now wondering what is the appropriate amount of money to give a child as an allowance. There are many different schools of thought here. 

One method is to give them a set amount according to how old they are. For example, a 7-year old would receive $7 a week. As they grow older, so does their allowance. 

Another method is to give them half of their age. That allows both the parent and child to ease into this process of giving/receiving an allowance each week. 

You could also pay your child based on the task or chore they complete. Harder chores will be worth more, while simpler chores will pay less. 

Some parents will base their allowance on their child’s grades. When this is chosen method, it’s important to identify what the requirements are to receive a monetary reward. For example, every “A” could be worth $10 and a “B” is worth $5. 

Appropriate Chores by Age 

Kids are capable of more than we give them credit for at times. However, you should match the chores that they can complete for a reward with what they are capable of doing. Here is a breakdown below of what chores are right for each age range. 

Ages 2 to 3

Your child is a toddler at this age and the main way they learn is through watching others and copying them. So their tasks should be fairly simple things that they can do around the home, like putting away their toys, putting clothes in the hamper, making beds, piling books/magazines on shelves, or tables, or filling up a pet’s food bowl. 

Ages 4 to 6

When they are at the preschooler age, they are still learning primarily by copying others. However, they may be able to handle some tasks without supervision. Clearing the table, pulling weeds, watering plants, matching socks, bringing in light groceries, and putting away clean utensils are chores they can typically help with. 

Ages 7 to 9

Primary schools can take on more responsibility without the need for supervision. They can help with vacuuming, helping prepare dinner, putting away their laundry, raking the yard, assist with bagging lunches, and taking the dog on a walk (with supervision). 

Ages 10 to 13

Middle schoolers or preteens can handle many tasks on their own. They also don’t need constant reminders to be held responsible for them. At this age, they should be able to babysit younger siblings with their parents at home, put the trash bin to the curb, use the washer/dryer, and make easy meals without any help. 

Ages 14 and Up

Once your child is at high school age, they can basically handle any household task you have. Cleaning out the ridge, cleaning bathrooms, mowing the lawn, babysitting younger siblings, caring for pets, completing small shopping trips, and cleaning the kitchen are all additional tasks this age range can handle. 

Help Kids Create a Plan for their Allowance

When you’re setting up your child for their allowance, it’s important that you’re helping to set them up for success. Be sure that they have some kind of allowance and chore tracker that lists out what tasks they need to complete to receive their allowance. This could be as basic as a list that’s put on the fridge. 

Split Money From Allowance Into Categories: Spend, Give, and Save

Another thing to consider is requiring that your child split their allowance into spend, give, and share categories. For example, if they earn $20 a week, you may ask that they spend 50%, save 25%, and give 25% to someone in need, church or a charity. This will help them learn the importance of savings and giving to those in need. 

Distinguish Between “Wants” and “Needs”

Part of the value of giving your child an allowance is that they learn from their spending. You don’t want them to be 20 something when they first learn that money doesn’t grow on trees. That’s why when they want something and don’t have the funds, you need to stay firm on saying they need to save up enough to afford that toy if they really want to buy it. 

Mistakes with Allowances for Kids

Even though it is tempting to try to course-correct your child from spending all the money on ice cream or a toy you know they will tire of quickly, it’s important to allow them to make their own choices. Allowing your child to make mistakes with their allowance will give them the opportunity to learn from it. After all, it is better that they blow all their money on a new video game than buy an expensive, luxury car that they can barely afford later in life. 

Printable Chore Charts

Keeping track of your child’s chores should be easy for both parties. Here are a couple of resources for printable chore chart templates that you can use for your family:

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