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Should You Give Your Child an Allowance?

Guest post by Jenae from I Can Teach My Child

To give an allowance or not to give an allowance — that is the question!

Giving children an allowance has been an age-old debate. Critics of allowances say that children are members of a family and therefore should do chores around the house as their way of contributing to the good of the family. Proponents of allowances argue that it teaches children responsibility. What’s a parent to do?

This “problem,” like many problems, can be solved with just a little bit of compromise.

Yes, children need to understand that, as a member of the family, they are expected to pull their weight around the house. Each child should be given chores that are simply expectations — no monetary reward should be given. Even a child as young as 2 or 3 can help set the table and make his bed in the morning.

In addition to a child’s household chores, she can also be given extra jobs around the house for which she receives a small monetary reward.

There are many benefits to giving children an allowance, even as young as preschool-age:

  • An allowance instills in a child a sense of work-ethic. If a child completes her jobs to the expectations of her parents, she will receive her allowance. If she carelessly rushes through, however, she will not receive her allowance. These situations are powerful teachers to children and help them realize that they cannot give a half-hearted effort and expect to receive a full allowance in exchange.
  • An allowance allows children an opportunity to handle money responsibly. When children are given an allowance, they are in control of how that money is spent. Essentially, the money is theirs. If they choose to blow their money on ten packs of bubble gum, they will not have the money to purchase anything else. Over time, a child receiving an allowance will learn that money has value.
  • An allowance teaches delayed gratification. If a child works for his allowance and saves his money to purchase a special toy, he is learning to delay gratification. Once he has saved enough money to purchase that toy, he will have a sense of accomplishment and the toy will be that much more meaningful than if his parents were to just have bought it on their weekly trip to supermarket. Lessons like this one cannot be taught without real-life experience!
  • An allowance teaches a child to give. Prior to giving your child an allowance, a conversation regarding giving needs to take place. Children need to be told that God expects us to give back to Him. Everything belongs to God in the first place, so giving back to Him is just a small way we show our gratitude for the blessings He has given us. How much your child gives is a decision each individual family should make.

You can get started by creating a chart for chores that are family responsibilities and a chart for tasks for which a child receives an allowance.  Once your child has completed the tasks for the week, reward her with an allowance!

Jenae is a wife, mother of two boys, and former first-grade teacher.  She loves finding creative ways to save money, spending time with her family and sharing fun activities on her website I Can Teach My Child.

What do you think? Do you give your children an allowance? Why or why not?

photo by Tony Hall

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  • Whitney says:

    My husband and I have decided that we’ll give our son an allowance separate from chores. I get income from my husband separate from my chores, but I must still do them. It’s my job, just like it’s his job to earn the money or my son’s job to obey us with his chores.

    I heard a good rule of thumb: 25 cents for every year of life a week. I like that. I made three jars to divide that up: one for giving, one for spending, and one for saving. That way, money is just for spending, but is divided early on. Works for us!

    • JavaChick says:

      Whitney, out of all responses – I really love your approach (realistic).
      My parents made me and my brothers “pull our weight” in the family and it was horrible, because then we got grounded, our allowance taken away etc,. Taught me nothing, but to hate my parents.

      I want my children to help me because they like helping, and they have fun with mommy and daddy while cleaning, and bond when cooking. Allowance should be approached like you suggested.

      @ Tiffany – that is something I will definitely consider as well – that really teaches a child that I can spend it on what I want, and I need to manage my candy funds “)

      • Heather says:

        This sounds like a good approach, but you may want to consider an amount more like $1/year of life a week, so that the child has enough money to actually buy something with.
        Also, as the child gets older and grows in responsibility, it doesn’t hurt to give a somewhat larger allowance, but with “bills” the child must budget for. For example, milk money at school, school supplies during the year (probably after Mom takes care of the big shopping trip in August), gradually work in more expensive things such as clothing. Keep in mind that, as a parent, you have 18 years to work yourself out of a job–and a big portion of this is financial responsibility. By the time your child is ready to head for college or their own place, they should already be buying just about all their own stuff, outside of room and board. This lessens the shock & gives them a better chance of being independent from the get-go. It doesn’t hurt at all to work to instill a sense that being financially independent is something to be proud of.

        • laura says:

          LOL Thank you, Heather for the suggestion on the “raise” for those kids!
          I’m 20 and us kids felt we were underpaid.
          We would have to make dad’s coffee for a whole 2 weeks to earn $5.
          Wash the massive mini van with the garden hose for $5.
          Clean our huge kitchen floor for $5………..

        • Heather says:

          Exactly. I’m 38, and my allowance when I was in about 2nd grade was $2/week. As i got older, it went up to $5, and then $10, but with more responsibilities as far as what I did with it. We didn’t have to save, but my folks would match the savings if we chose to do so. Allowance never got above $10/week, because I was earning money on my own by then, and had no need.
          (Allowance isn’t really an issue for us yet, as my oldest is 3)

        • andrea says:

          @Heather, That’s a good idea, but with all my kids and their ages, that would be over $60 a week in allowances!!!! We simply cannot afford that.

        • Heather says:

          @Andrea–The trick is, you give ’em the raise, but you also make them responsible for some of their smaller expenses–and make them proud to TAKE responsibility for as much as possible. By middle school, I was buying most of my own clothes, too. I had allowance, and regular babysitting jobs, so I always had money. Things like tickets to school dances, parts for bicycles, etc. When Goodwill & rummage sales weren’t meeting my fashion desires, I learned how to sew–a skill that has saved me literally thousands of dollars over the years. (Had my parents been buying my clothes, it still would have been Goodwill & rummage sales). And for a kid to be responsible for some of their own stuff is good for self-esteem, too.

    • RACHEL says:

      We’ve been encouraging our girls to do chores for about a year. If they successfully complete tasks, we reward them accordingly (3.00 a week or so) They then save it up in their own ATM’s that their grandma got them and then they get to spend it later on a big item they like… Just last month we took them to NYC American Girl Store where they got to spend their own money… They had over 150.00 to spend!!!!! They had a great time (naturally) But they learned that hard work pays off… truly!

  • Tiffany says:

    We highly recommend the book by Mary Hunt titled “Debt Proof Your Kids”. It is a great resource for teaching your children how to manage money. We will soon be giving our son “management” over a portion of our budget (a portion that we already spend on him, so it’s not an added expense to us). He will receive an allotted amount of money to give/save/spend. The control comes when we tell him that from now on, Mommy and Daddy aren’t going to buy the popcorn at Target or the slushie from the gas station. Instead, those dollars that we normally would spend are being given to him and then he is responsible for whether or not he uses it wisely. We will NOT give him extra money or bail him out or give him a loan. He has to make choices and live with the consequences (positive and negative) of those decisions. He is 4 years old.

  • Kathy says:

    This is incredibly timely! My daughter started kindergarten this morning and was asking last week about an allowance 🙂 We created her chore chart last night and she is very excited to be a ‘big girl.’

    Now to decide how much…

  • Heather says:

    More than once I’ve seen teenagers dressing like ____, and the parent moans, “But she buys those clothes with her own money . . . ”

    Something to keep in mind – maybe set parameters ahead of time on how kids can spend their money? Like family rules have to be kept.
    Mine are still young. So far no allowance. Currently, the 5 and 7 year old can earn money by taking 3 year old to the potty.

    • Heather says:

      I bought my own clothes as a teen, often with my own earned money (NOT allowance, which I really didn’t get anymore by then, as I was making enough babysitting, etc., and times were tough for my family, so I quit accepting it). Mom still had veto power over what I was going to wear out of the house–and I was not going out the door “looking like a hooker”, no matter whose money had bought the clothes.

      Is it perfectly fair? Maybe not, but you are still the parent, and the child still lives in your house. This is an opportunity to teach good taste–and maybe even the difference between looking truly good & being trendy. If you know any ladies that always just look really classy, maybe get one of them to give your daughter some pointers! They used to have a thing called “charm school”–a series of classes that tweens or young teens used to take to teach them how to be ladylike & dress well–even down to how to get in and out of a car without showing anything you don’t want to or bumping your head, posture, etc. Believe it or not, much of the stuff is not entirely irrelevant even today. When I was a kid, I had the book from the charm school my Mom went to in the ’60’s. Some of the info (not tying up the family phone, for example) is obsolete, but not as much as you might think–and I’m thinking we don’t do our daughters any favors by just hoping they’ll pick up these fine points as they go along.

    • Kristine says:

      My mom’s rule was always:

      I don’t have to LIKE what you wear, but I have to APPROVE.

      I plan on using it with my own daughter when she is older.

  • Katherine says:

    I agree with everything Jenae wrote. When I was a child, my parents gave us jobs around the house in addition to the chores we were expected to do as part of the family. As a part of our weekly allowance, we were expected to put a portion of it in our savings account and a portion of it was to be put in the offering plate on Sundays. It became second-nature so by the time I was old enough to take on babysitting jobs and earn money on my own, the habit of saving and tithing was firmly ingrained in my worldview. I didn’t even have to think about it and didn’t really miss the portion of my earnings that I didn’t “get” to spend.

  • Heather says:

    I don’t think that an allowance is necessarily needed to teach kids how to manage money. I’m one of 10 kids. No allowances. We had small amounts of b-day money from grandparents, and summer jobs as teenagers. Now in adulthood, every single one of us does fine with our money. No one is in debt, even though quite a few us have very limited incomes.

    I’m not saying allowances are bad, but just that I think you can teach your kids how to be wise without it. Especially if you can’t afford it.

    • Joanna says:

      I totally agree! I was one of eight and we never received an allowance our entire life. Chores were a fact of life in our home in order to keep it neat and clean. We had a small paper route (once a week paper) as a family and we all earned a few bucks from that. So between b-day/Christmas/paper route, that was our savings/spending money. However, for some reason, most of us didn’t want to spend it! By high school, I was teaching piano lessons and working at a pizza place (along with my two brothers). I had a year’s worth of college saved up by the time I graduated! We were raised to be frugal spenders, and so far, we have graduated from college debt-free and bought cars with cash.
      If my parents would have given us $5-10/week, each, they would have gone broke!
      Without an allowance, my parents instilled in us the desire to save and manage our money correctly!

      • Heather C says:

        I agree with you. My kids have asked for an allowance but they don’t do anything to deserve it. I never got an allowance growing up either and I have done very well with my money. Got my own car, and put myself through a little college as well. My parents didn’t pay for anything. We had chores too but we didn’t call them that growing up it was just called helping mom do the cleaning and we took turns drying the dishes. My son so far has done very well with his money, he is 13 and seems to be pretty frugal. But I think I have a challenge on my hands with my daughter who is 7 she seems to want to give all of her money away. I believe that children learn from example and if you set a good example they shall follow.

    • andrea says:

      @Heather, We have six kids right now including two teens and we don’t give allowances either. Frankly, money is tight and we can’t afford it. Even if we could, I have mixed feelings about it. I do, however, reward them with money for good grades, when they get their report cards.

  • Ellen says:

    yes I think kids should get an allowance, for extra jobs, so they learn how to handle money. My 4 yr and 2 yo. will get like a nickel, to get the bathroom garbage, and my room garbage, to dump in the kitchen on garbage day.They must return the can to the proper room. And that nickel must go into there piggie bank.
    it doesn’t have to be a big amount, just something to teach them.

  • Kelly says:

    I think we need to teach our children to be good stewards of money. Lets face it the world works off of money, to survive you must earn money!! You need to teach your children at a young age that they must work to earn money. Once $$ is earned, then you have to teach them to save, give, and of course spend a little bit!

    It does not have to be a lot, my 4 year old is perfectly happy putting a few quarters into his piggy bank, a few quarters in the collection basket, and then saving up for a new Thomas the Train!

  • ami says:

    Each family has their own way of teaching their children how to manage money.. i teach my daughter the Dave Ramsey way….which is helping me be more accountable for my money, so we both help each other.

    I currently work 2+ jobs, money from my 2nd job is paying down debt, money from the +job (I clean a salon one day a week) my daughter goes with me to clean the salon and I pay her $5 to run the vacuum and pick up the trash. She feels so “grown up” earning her own money. My daughter is 11yrs old, I feel like i am helpig my daughter get started on the right foot now with money and not learn the hard way as I have.

  • Kim Jones says:

    We have used an allowance the way many here have described. Ours are 14, 12, 5 and 3. We have a chore chart ofd required chores that they choose from a list each week. All chores left can be done to earn extra money. They get an allowance each week based on their ages but we go a bit further. On their b-day each child draws up a budget and if asking for an increase, comes with a reason for their raise. This teaches them to budget, live within their means and save money. We started with a savings jar and add a new one each year. We talk about money alot in our house too. I think it is important for children to think about how much things cost so they are prepared. 🙂

    • Natahsa says:

      @Kim Jones,

      Love love love this!!! What a great idea for them to come up with a budget, and an even better idea to present reasons for asking for an increase. This will help them immensely when thrown into the real world one day. Great idea 🙂

  • Amy says:

    We give our 4 year old and 7 year old $2.50 a week each. We decided on that amount because it is easy to tithe! We have our childen put 10% (25 cents) in a tithe jar, 10% (another 25 cents) in a save jar for whatever big future purpose the pick (to be decided now or later), and the remaining $2.00 goes in their “spend” jar, for them to blow at the dollar store, buy a new book they want, or whatever. They are always free to tithe more or save more if they want, too. My son is currently saving for an ipod, and he recently decided not to buy himself some candy because he really wants that ipod! 🙂

  • Abbie says:

    I agree with so many of the comments. There are so many things that my children are expected to do. They will make their bed, help feed/water the chickens, get eggs, help fold clothes, etc. There are certain things that they do get paid for because we feel it does teach wise spending. We also have 1/3 goes to God, 1/3 goes to savings, 1/3 goes to spending. However, our children know that if we ask them to do a chore, they are to do it, without asking for money. If they get paid, it’s a bonus. Our children are 8, 4, and almost two.

  • emma says:

    We have 5 kids ages from 11-2. The older boys are expected to do things without reward such as make their beds, keep thier rooms clean and even keep their bathroom pretty clean. My husband owns a small car lot and when they want to earn a few dollars they can wash cars, sweep the lobby…easy stuff like that. My 11 and 8 year old like to save their money and they end up spending it for something “cool” like a new game or cd.

    We bought a Wi game system and use that as a rewards for when they offer to do extra help around the house. Sometimes they do things like help me with yard work, dusting vaccuuming ect and they can earn play time at the end of the week. I was a bit unsure (felt kinda like a bribe to me) but they love it! They offer to help me out all the time and do so with good attitudes. Plus they get time to play on Wi yet they are not obessed with it (more Wi time means more chores to do). So its been a win win in our home.
    Even our 2 and 3 year olds are learning to be responsible. They both help me make their beds and have gotten into the habit of putting toys away on their own (most of the time anyway). We are not giving them money yet but plenty of praises…plus after we pick up toys before bedtime we do a silly “yay our rooms all clean!” dance. That seems to keep them motivated.

  • Angi says:

    I have 6 children (16,14,12,10, 8 & 15months). We have given our children an allowance off and on through the years, however we have never tied it to work, per say. We have taught our children that there are blessings and responsibilities as being part of a family. Everyone does their responsibilities in order for our home to run smoothly. Everyone also receives blessing from being part of our family, those blessings are sometimes basic like food/shelter/clothes, sometimes wants like gifts, trips, etc. and sometimes luxuries like an allowance. My husband has had several times of extended unemployment or underemployment and when that happens, no one gets allowance, even mom and dad.

    Even during those times, my children still continue with their responsibilities and since we have never paid them directly for their work here at the house, they have never objected to doing a job because they were not getting paid. They have had other objections, just not that one.

    My older boys now mow lawns and have a few side jobs and have decided that they are too tired to do all of their responsibilities here, so they pay their younger siblings to take care of some of them.

    This is just what we do, I would encourage moms and dad to really seek the Lord about what they should do in their families.

  • Reesa says:

    Our big kids are 10 and 12. We have tried so many systems over the years and finally have one we like.

    We feel that chores are just a part of life. Our kids need to:
    -make their bed before they leave the house
    -put their clothes in the dirty clothes (sort if needed)
    -take their pile of clean clothes to their room and put them where they belong. If I fold the laundry – I fold everything for them and sort into a sock pile, pj pile, hanger pile, etc. My husband will give them a huge pile and they to put their socks together and deal with it all.
    -help watch the toddler when I am doing my chores if needed.

    They don’t get paid to do the above items. They lose their internet/playstation/tv/phone privileges if they are not consistently doing their chores. Since we have been trying to sell our house for more than 3.5 years, it is imperative that our house be clean so we can be Show Ready in 20!

    On Sunday, my husband gets $20 allowance (lunch out, concert tickets, cd’s. dvd’s) and the kids and I get $5 each. This is our mad money. If they misbehave, we don’t take this money from them. I only take $5 for me because I leave the house one evening a week to work and need to buy something to use the free WiFi where I go. Usually it is a fruit cup and diet coke at Chick-fil-A. I put the rest into the grocery envelope. I felt like me having $20 a week would turn into many drive thru diet cokes and would be unhealthy for me. Just saying that so you don’t get a bad impression of my husband 🙂

    We make the kids buy everything themselves that they don’t need or we don’t have in the budget. For example, we went out to eat with a gift card this weekend but needed $4 extra dollars when the bill arrived to pay for the $1.99 ice cream the kids got. Guess where that money came from – their purse & wallet. Right there, on the spot. If they don’t have the cash, they don’t get what they want.

    The kids have adapted very well to this new system. The best part is that my husband and I are finally working together on the budget therefore it is actually working and everyone has a positive attitude.

  • Melissa Ceccofiglio says:

    Oh my gosh this post has fallen at my finger tips at just the perfect time too! My son turns 3 This Friday and we have taught him a few simple jobs around the house…and Plan once we are back from our 2 week vacation to really lay it all out and show him how to divide the money in thirds to save some of his allowance spend some and give some. My parents gave me a dollar per week for every year old I was (and every year the jobs increased). My husband and I decided that this would work well for us as well.

    And just to reply to Heathers comment about the teenagers…Oh I sooo know what you mean!! When I was about 14 I was at the mall with a couple friends and we all bought a ridiculous looking outfit…(LOL) once my mom saw it she made the final say that it was going back…even though it was bought with “my money” she explained to me that I still live under their roof and I was not going to be seen walking in or out of her house dressed that way. Yeah I was upset a couple days but I think parents today forget they do have a say in how their kids look. From that point on I stopped using “my money” on clothes…It was just used for food, earrings, music etc….

    Thanks a BUNCH for the post!! I loved reading it and the other people comments as well!! :O))

  • This must be the day to talk about kids and work around the house! I just posted a list of age appropriate chores on my blog today!

    I think your approach is right on! There are some things children need to do because they are part of the family. But, giving them an incentive (like an allowance) allows them to learn to make decisions as well as become wise stewards of money.

    My mother taught me a ton about money but there’s one thing she did early on that has stuck with me throughout the years. As a five year old, she let me work to earn enough money to open a savings account. I would earn a nickel for folding laundry, a dime for dishes, etc. (this was a LONG time ago 🙂 Since I needed to have $5 to open a savings account she agreed to match $2.50 if I could earn that much myself. Because I EARNED the money to open a saving account it really helped me put into practice saving on a regular basis.

  • Jim says:

    Ok…I will eventually offer my son an allowance, but I will ABSOLUTELY NOT give more than 3% cash back on purchases. 😀

  • Anitra says:

    I like a hybrid approach (our children are 2 and not-yet-born, so we still have at least a year or two before we start giving out money).

    Chores: mandatory. Appropriate punishment if chore is not done.

    Allowance: small, but not tied to chores in any way. You get this money to spend however you please.

    Extra spending money: earned by doing special jobs that mom & dad don’t want to do (for me, growing up this was raking/bagging leaves and mowing the lawn). Can be one-time (painting the house?) or ongoing (mowing the lawn).

  • Sara Z. says:

    My situation is complicated and I still haven’t figured out how to do chores and allowances in our family. We are a blended family. I have a 4 year old daughter plus 3 stepkids (12, 10, 6). My daughter is with me all the time except for every other weekend that she spends with her dad. My step kids see their mom every other weekend, but of the rest of the time they spend about 3/4 of it with my in-laws (that’s a story in and of itself) and the other 1/4 with us.

    I haven’t yet found a system for chores, allowance, etc that is fair for all kids. I don’t want to “punish” my stepkids because they aren’t at the house as much, but I also don’t want my daughter to feel that they get all the same privileges as her but are hardly ever there.

    Does anyone have any ideas???

    • MOR says:

      @Sara Z.,

      Blended families can definitely be tough! First, I’d suggest you and your husband focus on doing what you believe to be best for each individual child, rather than what the children perceive to be fair. Certainly you should explain how you make the decision, but treating your kids fairly does not equal treating them the same.

      Second, especially with regards to the stepchildren, it sounds like you’re co-parenting with quite a group (you and your husband, your in-laws, and their mom and her husband, if she has re-married). Ideally, you should all work together to make these kinds of decisions so that the kids have a consistent set of expectations, discipline, and rewards in each of the households that they bounce between. They’re lucky to have so many people who love them, but they’re also in a tough spot with a lot of instability.

      I don’t know your specific family or situation, but, as I mentioned before, I think the absolute key is doing what you believe to be best for the kids, even if that means not treating them exactly the same way, and even if they don’t immediately understand why you make the decisions you make.

    • dee says:

      @Sara Z.,
      Hi, Sara. We just celebrate our 7/12 (7 married/12 since our first date) year anniversary of our blended family yesterday. So, maybe I can help. My 5 blended kids alternate in age (one of mine, one of his, one mine, etc) from 24 to 19. We have/had house rules. Every kid at our house, while at our house:
      1. Does their own laundry. (Starting at age 9)
      2. Makes their bed/keeps their room clean/tidy
      3. Sets the table, helps with dinner, cleans up after dinner (even now it is funny to watch those big adult bodies working in harmony during kitchen clean-up when they are home for the holidays)
      4. Makes their own breakfast and lunch (starting at age 9)
      5. Cleaning the house, mowing the lawn, etc got divvied up depending on who was where when. If you were at our house, you LIVED here and were expected to chip in. I didn’t want any kids to feel like guests, or feel like someone got special treatment for being there less often, or more often.
      And I wanted them to have basic skills when they left for college.

      From ages 5 to 10, they got $5/wk. Starting at age 11, they got $1/year of age. That money had to buy any stuff they wanted, movies out with their friends (when they got older), etc. We did not buy candy, toys, games, CDs, movies, etc except for birthdays and Christmas. They could save or do extra chores to earn that stuff. They gave to charity, saved and spent as they saw fit. (We did talk about their decisions with them.) Great report cards did get a trip to the book store to pick out a book or two. My kids are veracious readers, so books were a huge incentive to them. (That proved a wonderful investment. They all did extremely well on their SATs and got scholarship money for college.) No TV on a school night helped, too.

      When they were old enough to go shopping on their own (around 13), I gave them $x cash/ season for clothes. Our rules were that clothes had to fit, be clean, no holes or private anatomy displayed. They could buy whatever they wanted within those rules and keep the rest of the money they didn’t spend. Talk about creating bargain hunters!!!

      We did the same with college apartments. We calculated a budget based on their rent, utilities and food. Whatever they had left at the end of the year was theirs to keep. Our rules for that were that they had to eat a nutritious diet – no living on just Kraft mac & cheese – and live in a safe apartment. They sure feel differently about “their” money than they do about “my” money. Again great bargain-hunters and great at living on a budget – all 5 of them.

      They have to earn their own pocket money after freshman year and have enough money saved for 6 months’ living expenses when they graduate. We pay for tuition, room and board while they are in school so they come out with no debt. We encourage part-time jobs during school (after freshman year) and full-time summer jobs. Saving some of their “income” toward their goal of 6-months’ expenses gives them practice for the real world and a buffer for when they graduate.

    • Meagan says:

      @Sara Z.,

      We are a blended family here, too! I have no blessings of my own, but I do have 3 step-sons who live with us about half the year. Previously we were on an every-other weekend schedule. One thing we have always believed about our house is that it is *not* a hotel. The kids are *not* on vacation when they are here. It doesn’t matter if the kids are here for a weekend of for a month, their chores remain the same. I think that if all the kids are responsible for the same things (as much as their ages allow) then the chores should be fair. Here is an example of what our kids do: once a week each child is responsible for sweeping and vacuuming the downstairs, once a month they each clean the bathroom, they are responsible for sorting their clothes so I can quickly grab laundry to do, tidying the bathroom two days a week, cleaning their rooms nightly, and caring for their gerbils.

      I do understand that figuring out allowance might be kind of difficult. We’re still trying to figure out their allowance because part of the year they are with us more frequently than others and we haven’t quite ironed that part out yet.

  • We do give allowances based on whether or not we feel that our children did what was expected of them during the week (cleaning up after themselves, helping with the dog, chores). Part of their allowance is tithed on Sunday and the other part is saved so that they can buy something that they want.
    I think allowances are a great way to teach children about money and also about giving.

  • Veronica says:

    My 10 year old twins have had chores – and an allowance based on those chores since they were 4 years old. In the begining, they were simple chores like making their beds – and their allowance was usually a quater per week. Now that they are older, the chores are more advanced like dusting, sweeping, etc. Their “pay” goes up every year. They are required to save 50% of their allowance. Birthday/Christmas money is theirs to spend as they want. We also post the financial penalties if they choose to NOT do their chores. And doing them IS their choice. Loosing that money – or receiving an invoice from Mom – goes a long way. Only one of my kids has received an invoice from Mom for the work that I had to do that was supposed to be their chore. And having Mom take them to the bank to actually get the money out of their savings account to PAY that invoice was earth shattering. I can say – at 10, my kids have more in their savings accounts than most adults I know.

  • Karen says:

    We follow the Dave Ramsey way around here: the kids (we have 3 girls ages 8, 5, & 3) do some things just because they’re part of this family and must contribute and they have other jobs that they get paid a “commission” to do. Those jobs are optional and pay day is once a month based on how many commission jobs they’ve done.

    They each have 3 jars to divide their money as it comes in for whatever reason (commission, gifts, work done for others): Give, Save, Spend. They have control over the spend jar and input on the save jar (for instance, whether it should be moved to long term savings – their bank accounts – or used for a short term wish).

  • Hillary says:

    While I do not think it is wrong for anyone to give an allowance, I just don’t believe it is the only or best way to get the four results pointed out in the article.
    **I do not believe that an allowance teaches children to have a stronger work ethic-it teaches them to only work when they want something. The stronger work ethic comes from working hard because it is their responsibility and because we are all to do our best in everything for God, not because of what we get in return.
    **In my experience, children handle things better when it is viewed as special. Money that can be earned regularly loses its value because ther will always be more or there will always be another chance to earn more from a child’s perspective. Money that only comes around a couple times a year or at special times is of more value to children and is handled with more care than if it were always at their disposal.
    **There are other ways to teach children that money has value-for instance, my children learn about the value of money every time they go to the store. They can choose snacks for X amount-sometimes they can choose one item, or two should they choose something on sale etc…
    **I teach my children to give by having them give time, because sometimes in life we have little to no extra money, but we can always give in other ways. Then, when birthday gifts are given, or if I surprise them with a dollar etc., they can give a portion of that-which they are then thrilled to drop some in the offering at church.

    • Hillary says:

      @Hillary, I just wanted to clarify I am only speaking of younger children-under 10.

    • @Hillary, So true!

      I don’t have money to pay for chores, but even before we were underemployed, we decided against it. My husband is the most frugal person I know, and he never had an allowance growing up. Likewise, I only had $1 a week, and my dad was usually 3 years behind in paying us. My brother got an additional $5 for mowing the lawn. Often, he would tell my dad that my dad could keep the $5; it wasn’t worth it to my brother to mow the lawn. My dad would reply that he could mow the lawn for $5 or he could do it for free, but my brother had to do it anyway.

      My children get birthday money from grandparents on occasion, and they have learned how to spend it wisely.

      They can still learn about wise spending habits, just by example and explanation. The other day, my 7yo son saw a shirt that he liked for $8. While $8 isn’t a bad price for that style of shirt, I pointed out that I could buy him 32 shirts for the same price, if I bought them used at a garage sale (or 16 shirts if they were .50).

      My 8yo daughter wanted to buy something with her birthday money. We went to Michael’s and purchased the items she wanted on sale and one with a 40% off coupon. I forgot to have her hand the cashier the 40% off coupon, though. I asked the cashier afterwards (I saw the coupon in my purse as I was putting the receipt in my purse) if we could still use it. She said sure; she put it in as a return, and then had us repurchase it, and then handed us the difference in change from the coupon. My daughter saw right there how much the coupon helped her!

      All of my younger children are still learning about the value of coupons, though! Thanks to this site, my children think coupons are just to get things for free! 🙂 I’ve tried to explain better exactly what they do, but they have seen several freebies come through the door lately!

      I’ve compared grocery ads with my children, so that they can see why I would buy peaches at .50 a pound from one store versus $1.99 the same week a another store. I think that explaining how to properly use money is a much better teacher than just allowing them to blow money.

      Despite rarely seeing our $1 a week allowance as a child, my brother and I did just fine. We both got jobs as teenagers. My brother saved up enough from his fast food job to pay for a brand-new truck IN FULL, before his 16th birthday. When he was 22, he had saved up enough in his investments to put a considerable amount down on a condo in Southern California. He lated sold that condo for a profit, rented for several years, and just recently bought a house (while waiting for the market to go down).

      I graduated from college debt-free.

      Good spending habits are taught in lots of ways. I don’t think you have to have an allowance to teach wise stewardship. I also think that we can all work to help one another as family members, because you love one another.

    • Heather says:

      @Hillary, I agree! I also think there is a big problem with entitlement in our society these days – not just with kids. I’m afraid that an allowance, if not carefully presented, could contribute to that in kids. Nobody gives me money just because I exist – why should my kids get it just for existing? That won’t happen when they are adults!
      I have many conversations with my kids when we are out shopping about money, its value, and how to make it stretch. We discuss budgeting, etc. They seem to be catching on, and are saving what they do have.
      Also, as a parent, I want to be able to provide for them, especially when young. I buy them what they need, and occasionally what they just WANT. As a teenager, even though I sometimes wished that I had an allowance, I felt sorry for my peers who had to pay their own school fees, and even their own school lunch money out of their own pockets. It just seemed odd to me. Now as an adult, looking back, I am glad that I didn’t get an allowance.
      But it is a issue with many facets to it. I can see pros and cons.

  • Georgette says:

    Chores aren’t tied to allowance in our family. We give our kids allowance until they get their first job – still waiting for that to happen for one of them =) They start getting allowance around the age eight and are given half their age each week. Sounds like a lot at first, but it really isn’t as they get older and want to buy CD’s, DVD’s, clothes, games, etc, etc…… We stop giving allowance when they get their first ‘real’ job which we strongly encourage at the age of 16.

    They’ve learned to save, or not, for the things they want. If they don’t save up and just blow their money on McDonald’s, for example, that’s their decision. It only takes a few times of having absolutely no money to buy the girlfriend/boyfriend a birthday/Christmas/Valentine’s day present for them to learn how to save. And, no, we don’t bail them out of those situations — natural consequences can be the best teacher.

    And now for chores – we are all expected to do our assigned chores regardless of our employment outside the home — that includes my husband and I. If you live in our house, you are expected to help with the upkeep. In fact, my daughter came home for the summer after her first year of college and I put her name right back into the chore chart. No discussions and she didn’t blink an eye. It just makes sense to us that our children, or for that matter anyone who lives in the house, should help keep it clean since we all contribute to messing it up.

    Since chores aren’t tied to allowance, we never withhold allowance for missed or badly done chores. They either get redone or a privilege is withheld. This system works well for our family. Obviously nothing is perfect and there are times when there are struggles to get chores done. But, a teenager without car privileges isn’t a happy teenager!! It’s amazing how quickly they can move when they want to =)

  • shelly says:

    As a child, we could earn an allowance for each chore we did. We earned 5 cents for each completed job (making the bed, putting away our clothes, etc.) My mom decorated 3 jars, Jesus, Save, and Spend. This was such a great way to instill good monetary habits early on. We still give 10% before we do anything else and then save, then last spend. Thanks to the good habits my parents instilled, my husband and I are almost debt free (only debt left is the house, of which we have payed off 75% in 6 years.) Parents are SUCH a strong influence on their children, both in what they say and what they do. I only pray that I can instill the same values in my own children!

  • audrey says:

    I believe a child should definitely have to earn an allowance. There should be some chores that are “no questions asked”. But, allow the child to do extra “above and beyond” chores in order to earn an allowance. What better way to instill good work ethic?

  • Jen T says:

    Just make sure if you’re paying your children an allowance to fall through with it, whatever the agreement is. Try to pay the allowance on the same day/week, and don’t tell them you’re going to give them the money on such-and-such day and not follow through with it. They shouldn’t have to chase you down for their allowance, especially if they’re holding up their end of the “bargain”. Sorry… anger from my own childhood and experiences. =) I enjoy reading everyones ideas – it’s getting the wheels in my own head turning.

    • Jen T says:

      @Jen T, err I meant to say follow through with it, not fall through with it

    • Meagan says:

      @Jen T,

      I agree with your statement, as long as it is possible.

      Our kids know, from personal experience, that as long as Dad and Meg (I’m their step-mom) can afford their allowance we will gladly pay it. However, we’re a one-income, homeschooling family and we simply go through periods of time where it is not always possible for us to be doling out three allowances. I think what helps is that their allowances have never been tied to the chores they do-that is expected because they are family. Our kids have never once complained and are always grateful for what they do receive.

      • Jen T says:

        @Meagan, I don’t disagree with you, because like you said you do it when you can, and it’s not chore attached. You’re still providing for the children. =) For me, it WAS chore attached, and my father had the money to spend $2k plus every month JUST for his various hobbies (nice new laptop dad… could I replace my 2 year old payless shoes that’re hurting and two small for me?), but when it came time to pay my allowance after I already did the chores, I had to chase him down for the money. In this case, he was one of those fathers that made me pay for *everything* with that allowance. My allowance paid for food all day (because he didn’t feed me either.. haha), shampoo/conditioner, clothing (which I could never afford), school supplies, bus pass – everything. I’m just saying from an experience from having a father who always broke his word… it sticks with your children when you make an agreement and then don’t follow it. Of course, *I* had many other issues going on like neglect, etc. etc.. I meant no offense to you Meagan. Like I said, this is coming from my own childhood trauma. =) Lol… but it’s good practice for all of us as parents, to follow through and do what we agree on – to keep our word. Isn’t that what we want for our children?

  • Megan says:

    I grew up very poor and never had an allowance. I was instilled with a self-taught work ethic (my parents not exactly being role models) and a drive to save what I’d earned through determination. My oldest daughter is 4 years old and as of right now I don’t think I’d be giving her an allowance. I prefer to teach her about the value of money in other ways. I’m not sure what age I’ll start with spending vs. saving. I started my first job when I was 15 and used it to pay for my driver’s ed and every car payment thereafter. I never asked a dollar from my mother and am very proud of that.

  • Amy says:

    We have “Citizen of the House” chores… make your bed, pick up your toys, etc that have to be done regardless. These are the things that have to always be done just because you live in our home. There are paying chores as well, but none are mandatory like the Citizen of the House chores.

  • Marissa says:

    I’m 19, I got married last summer and I would just like to share what my parents did at one point when our financial situation permitted:

    They devised a list of tasks, chores around the house that could be done and allotted each one a certain number of stars. Each star was worth a quarter. A really big job like the bathroom would be 4 stars!! for example. We were allowed to choose what we wanted to do and keep track of it and get paid accordingly. I always worked hard to help out and while finances permitted I did earn many stars! I have 2 brothers and I love them very much and I am not trying to sound full of myself, but they would never participate in this system, rarely I should say, because they were lazy and thus they didn’t get to enjoy having a few bucks and to this day I am the thriftiest of the 3 of us and I use my money the wisest- saving, sharing, couponing!

    So allowance can definitely help, and I am all about giving kids who go the extra mile, a little extra, if you can.

  • Robbfamily7 says:

    We use the Dave Ramsey System for kids. They have certain chores that are expected (cleaning up after themselves, making beds, etc) and then they get paid a commission based on extra chores done. Once they get paid they have Save, Spend, and Give envelopes that they go into. I love that it’s very “real life”. We all have things that are expected, we all have jobs that we earn money at based upon performance or skill, and we all need to learn to give and save. You can order the items on his website, very inexpensive. And you get to set the amounts that are paid and how often.

  • Katie says:

    I love lifeasamom’s high fives which I copied and use with my son. My son loves earning money so I give him pocket money on completion of his high fives and then he gets a chance to earn more. He then can spend his money on whatever he wishes (with in reason!).

    He asked for a Wii game the other day and I made he bring down his money box and count out his coins to see if he had enough. He did, but it was just enough! He was really upset when he realised that the game would take all of his money! He asked me if I could pay with my debit card so he could keep his money. When I explained that I couldn’t because the card actually deducts money from my account – he looked shocked. I explained that we all have to make decisions and choices when using money and this was a decision he needed to make himself.

    He wanted then to know how he could get the game and still retain some of his money. I told him he could search on the internet and see if he could get the game any cheaper than the price advertised in his magazine. He was then motivated to search until he found one cheaper. He decided after all that he didn’t actually want the game because a large chunk of his money would still have to be paid out.

    He’s six and I think this was a really good lesson. Given the opportunity to make the decision himself and having that responsibility taught he alot. Plus he doesn’t nag me for the game! So I’m up for an allowance as it provide us parents with an opportunity to teach financial savvy at a very young age.

    My son still has his money safely in his money box – he is even refusing to put it in the bank.

  • Ella says:

    Yes, yes, yes on allowance. We’ve started giving our 5 and 7 year olds chores to earn it. They do other chores too because they are members of the family and need to pull their own weight. I think the most important factor is to make it age appropriate. Too much allowance will just spoil them. We do $1/per year in age.

  • Nancy says:

    I have become a big believer in allowances. Here are our ground rules: each child has jobs to do as part of the family. There are also extra money makers that I want done. If a child doesn’t do a job either in a timely manner or well enough I do it. And dock their pay. (They have then “hired” me to do it. But I set the price.) They pay for all fun stuff like treats at the movie or music or “extra” clothes. Parents have final veto power. Any “loans” come with a promissory note and carry interest.

    Last week I repossesed an ipod.

    I allow them to make “dumb” choices, including spending entire money on junk food. If they get a stomach ache or can’t attend a party because they can’t afford a gift they have just learned a priceless lesson. Better to learn to control themselves now then when they are paying rent or buying cars. We encourage giving and set a good example but don’t require it. Same with saving. But if they want something and haven’t saved they go without. We model saving, paying cash, and giving generously. It took my 12yr old 1 week to start clipping coupons and looking for bargain music. My 10yr old set up a deal with her older sister to do all her chores for a week to collect her allowance to buy a special game.

    We try to make it as “real world” as possible. If they bring home something we don’t approve of they simply lose it. Just as we would lose something “illegal” we bought. They now know to ask first if in doubt and not risk making “bad investments.” Nobody complains about chores anymore and I very seldomly have to do anybody else’s work. Nobody wants to hire me–I’m too expensive! :0

  • laura says:

    What’s funny is these are all moms on here. Allowance was a Dad thing. Mom never would have given us any money! haha

  • Amy R. says:

    I don’t do allowance, but something much more fun! I tell my children (9,7,5) to find things that they see that need to get done. Then we negotiate over the price of the task. This way, they are learning entrepreneur skills along with negotiating. It’s great to see the things they see that need to be done, that I would have never thought of asking them to do. (My 9 year-old son is very motivated.) They do have household chores they have to do as part of being this family. ie: no money for making their beds, brushing teeth, helping with kitchen clean up. They are required to give tithe and then split the 90% between a savings account and their spend money.

  • Carissa says:

    I don’t think the debate is so much whether or not to give them an allowance, but whether or not their allowance is tied to their chores. I like the idea that Love & Logic propagates….children should get an allowance and they should do chores, however they are not getting paid to do their chores. Instead, if they fail to responsibly do their chores, you might use their allowance to hire someone else to their chores for them. So while they do not gain their allowance by doing chores, they can certainly loose it if they fail to do their chores.

  • Chelsea says:

    I grew up in an affluent family, and had chores each week that had to be done before I was allowed to do any socializing on the weekends. This was extremely motivatinal to me as a tween, and only increased as I got older. It was never tied to money.

    As for money or allowances…my parents wavered quite a bit. There was always a struggle of what/when/how much, and usually they just gave in and bought whatever it was I wanted when we were out together. I learned to wait until I was out with Mom so I could ask her to buy something. Dad gave me a credit card at 16 for gas and anything else Iwanted. If I kept my grades up, nothing changed. I played high-level sports, so I was never required, nor did I want to, get a job throughout high school.

    This was absolutely the worst thing my parents could have done for me as a child in terms of handling money. I’m so thankful I didn’t accrue tons of debt in the process, but it has been a long road to recovery in my spending habits and learning to tithe and save- neither of which my parents did consistently. I have a wonderful husband who is a great saver and spender, and he has reformed many of my bad habits. We have two young kids, with another due this fall, and more than anything I want them to learn how to handle money the right way. We are now on the Dave Ramsey plan, which as you can imagine is totally foreign to my parents and my siblings! We are truly the “weird” ones in my family 🙂

    So I’m inclined to follow Dave Ramsey’s plan for kids, though our oldest just turned three so we haven’t set up a system yet. More than anything I want to model to my kids the right way to handle money, and expect the same of them.

  • Kristen says:

    We don’t do allowance, but we recognize that our kids need motivation (my husband sure wouldn’t show up to work out of the kindness of his heart) – so when the kids are doing more than they need to (ie helping mommy by cleaning sister’s room (she’s 2) or picking up the living room, or cleaning EXTRA good when company is coming), we give them coins in their jars. My 7 year old is saving up for a Lego Mindstorm ($279), we’ve told him there is no way that we are buying it for him, because we want him to work hard for it and if he works hard he’ll take care of it (or redecide what to do with those funds once he FINALLY gets to $279). We’re not always the best about giving them money, but we keep our change in a jar and give it to the kids when they’ve earned it – It’s made a HUGE difference when we go somewhere. “Mom can I have this or that?” And if I respond, “I’m not buying it, but if you want to buy it with money from your jar you can.” It’s amazing how quickly priorities change when *they* have to pay for it, and when it’s *dad & mom’s* money. Needs and Wants change really quickly. 😉

  • Lady Dorothy says:

    A couple people have mentioned the Dave Ramsey “commission”. I like this word so much better than “allowance”, for the same reason DR calls it that. Our culture seems to have entitlement issues. In contrast to “allowance”, “commission” emphasizes the work ethic. We didn’t call it that when our children were growing up, but that’s what my children now call it for our grandchildren. I like it so much better. Of course parents still get an allowance — it’s their money to begin with. 🙂

  • Wendy says:

    My daughter isn’t old enough for an allowance yet (just turned 2), but we do plan to give her one. I think charity is really important, though – she’s going to have a set percentage she has to set aside in an envelope for charity, but she will get to decide where it goes. When I was a kid I had to put $0.50/week into the offering plate at Sunday School, and I never felt good about it – it was just one more thing mom said I had to do. Once I got to be a teenager, though, I got to donate my money to whatever causes I felt were best – even if my parents didn’t agree with my priorities! – and I feel like I really learned a lot about giving and giving back.

    If my daughter wants to give her money to the church through the Sunday School offering, fine. If she wants to save it up and give it on random occasions to the new church carpet fund, the Christmas offering, and the local girl scout troop, that’s fine too. It’s important to me that she gets to choose!

  • dana ticknor says:

    As the parents of 11, the oldest being 20, we have never given allowances. My children are expected to pitch in for the good of the family, but we also make sure to always have ‘extra’ jobs for them to do. These range from special spring cleaning chores to things that I just make up to ensure that we always have ‘paying jobs’ (as my kids call them) available. If they are too young for little jobs, they are too young to be spending money! LOL!

    I have not and will not give my kids allowances, and we have a troup of kids with great work ethics. I feel that allowances instill a welfare mentality; getting something for nothing. If my children want something, they need to earn it (just as we do), and learn the satisfaction of earning it. 😉

  • Lisa says:

    We pay commission using the Dave Ramsey approach. We implemented this about 1 year ago and have had fantastic results. Our 4 children, ages 5 – 10 understand the relationship between working and earning money. And it’s not all work and no play. They have lots of fun time. We require that they tithe and ask that they put some away for savings, encouraging at least 10%. We opened a long-term savings account for their car (yes, vehicle) fund. My dad gave them incentive to save for a car by matching their car savings fund each year on their birthday. Our middle child already has over $200 set aside for a car. She just turned eight. And she is not stingy. Just yesterday, she donated 1/2 of her current “spend” money ($10) to a charity raising money for a boy with cancer. Talk about being touched as a parent to watch your child willingly give her $ to help other kids. How rewarding! Chores are possible – even our youngest (starting at age 4) learned how to do his own laundry and helps fill and empty the dishwasher. He LOVES to do this. His favorite treat is the ice cream truck and he knows chores = money for an ice cream. We gift them money for special events – for example, we went to an amusement park this past weekend. We gave them each $20 to purchase dessert, play games, buy souvenirs – however they choose to spend it. We purchased lunch and brought water bottles. It was fantastic to see the choices they made. We watched as they realized how expensive the soda was as lunch ($5 for a small cup!!). They all were more than happy to have water so that they could get ice cream later. They realized why we had to make yes and no choices for games, treats, etc on prior visits. It was so much better when we allowed them to make their choices.

  • Dona says:

    I am one of the few people who give my teens a strict allowance. I have many family members who have picked on us for this…but we have truly reaped the rewards.

    We began giving allowances about 4 years ago. We budget for this amount and each week my husband withdrawals the same amount of cash out and we divy it up. Our older boys get $20.00 every two weeks. But here is the catch…WE PAY FOR NOTHING…we do not pay for gifts to birthday parties…we do not pay for moving nights at the mall, we do not pay for “spending” money at church camp, etc.

    We do pay for their extracurricular activities and we do pay for the costs of camps and now and then a church one to Six flags or something. But when they are at camp or on those events..they better have some spending money.

    When we first began…it killed my husband to watch them blow $20.00 bucks on candy or trading cards. I kept assuring him that it was better to let them blow this money now..and learn from their mistakes..while it is only $20.00 and not a $1,000 credit card. It took about 6 months before the kids caught on that we meant business! Our sons were invited to events, birthdays, movie nights, etc and they were unable to go because they had blown all their money.

    Now 4 years later…they are avid savers. They are also great at budgeting. They both have goals and divy up their allowances to give themselves some blow money..usually they cut it in half and give themselves spend and they sock the rest away. They even check the calendar and make sure they are ready for upcoming events. It really cracks people up to hear them being so responsible with their money. They each now have over $200.00 saved..they both rival each other on saving more than the other.

    The key is TO LET THEM MAKE MISTAKES with their allowances….just be prepared to stick to those mistakes and not give in. It was hard as a momma to say to my son… spent your money and you can not go to the movies. Inside….I wanted badly to pull out some money and hand it to him, but I knew he needed to learn this lesson early in life as opposed to later!

  • Hannah says:

    We don’t give our five chilren an allowance because what does that teach them? Free money is rarely a part of real life.
    We do, however, encourage them to find ways to develop a work ethic that produces an income.
    Our nine year old daughter invested $2 in a box of wildflower seeds earlier this season and has been selling bouquets of flowers to the neighbors for a dollar or two apiece. Two yrs ago our eight yr old spent $20 on some chicks and has been using the money from the extra eggs he sells to buy feed, have spending money, and saving money besides what he gives to church. All the children have the option of doing extra chores around the house for a quarter a job so no one is ever short on a money making venture.
    Anyway, that’s what works for our family. The kids love it and we do too.

  • Lana says:

    I vote no. My kids will not receive allowance even when they are old enough.

    Chorus are part of carrying the load of the family. Everyone should be cooking and cleaning and working outside. If you want to eat, you must learn to work.

    If a kid wants actual cash, they need to learn to apply their skills to business in order to get money. If the family has a small business, that would be a good place for them to earn “allowance” (which you can get a tax reduction on). If the family does not have a business, there are other creative ways to learn to earn money. As a kid my mother taught us to buy cheap items at garage sales and resale at a higher value. Also, I learned to sell cookies and lemonade. Even by seven or eight, you can have your children picking blueberries and strawberries out at farms and selling it at a dollar or two profit to people in the church who don’t want to go sweat.

    There are a very few exceptions where I might consider paying my children for a service (such as painting the house), but they are few and far between….not cooking, weeding, vacuuming, or sweeping.

    And to the person who said they had ten siblings and lived without allowance just fine. Ditto. I saved a large amount of money as a kid without allowance. Perhaps that’s because money meant something to me because it was hard to come by. I learned that a dollar was precious and to spend it wisely.

  • SHANNON says:

    We pay our children commissions. Each task has an assigned monetary value. We also have negative monetary values attached to two other items if they are not completed daily.

    We have a chart for each child and they are responsible for signing for their chores everyday. Everything must be done by a certain time and then Dad and I check the quality of the work. If it’s not acceptable, they are not paid for that chore. We have explained to them that if we pay for a service, we expect that service to be performed and ask them to put themselves in our shoes and ask them how would they feel if they paid money for something and received mediocre results.

    At the end of each week we take the chart down and total the commissions (thank you Mr. Ramsey). Each child must tithe 10%, save 20% and are allowed to have the rest. Each child then takes their tithe money to Church on Sunday and places it in the offering plate. It’s amazing to see how excited my 3 year old gets when she gets to give money to God. She won’t leave the house without her tithe envelope.

    Our oldest daughter has recently opened her own mutual fund. She is 12. She has saved her spending and birthday money along with her savings money and decided to open an account. We’re very proud of her. She looks forward to seeing her statements every month. It was exciting to see her making decisions on how to invest her money when we sat down the the Financial Advisor. The chose to be aggressive. Dad and I have agreed that if she loses money, we will start a savings account to buffer her losses so she won’t have to bear the full affect of the risk.

  • Mchelle says:

    As stated in the article there are many different ideas about this. I can see clearly from both the “do” and the “don’t” perspectives. It would seem that each family has to make their own decision while not judging another family’s way of doing things. I don’t recall a “thou shalt or shalt not give your children an allowance” passage in the Bible. =) Speaking of the Bible, reading the Proverbs everyday can help instill good money habits irregardless of your position on allowances.

    It sounds to me like it is irrelevant weather or not you give your children allowances. Your attitude is far more important. Every person, even children, like to be treated with respect. If you approach them with an “I gave birth to you therefore you will work” attitude they may learn to work but they will probably resent you for it, but if you have an “I gave birth to you and so I will provide you with your every whim” attitude that won’t work either. If you are grateful for their contribution and make them know that they are an integral and needed part of the family then the money really doesn’t matter. You don’t owe your children anything, really, but on the other hand you children don’t owe you anything either. Journey together training them as you go hand in hand and be grateful for what you can give each other.

  • Laura says:

    I started giving my daughter an allowance at 2 years 4 months – not tied to chores – because she was READY for it. Her grandfather gave her a dollar one day, and she planned to take it with her to the mall to ride those little moving cars that you have to put $1 into to make them move. I think they’re a waste of money, so I wouldn’t give her money for them. But I was so impressed that a 2-year-old was PLANNING how to spend her money.
    So we decided to start an allowance so she can learn lessons from spending/wasting/saving/giving. Basically she pays for the frivolous things we won’t buy her, and we’ll be helping her learn to save for bigger things as time goes on.

  • I loved what our Love & Logic facilitator taught us about allowances: Never pay kids to do their chores; however, you can pay them to do YOUR chores. And when they receive their allowance on the designated ‘pay day’, as you get ready to dole out the allowance, you immediately take back a small amount called TAXES. (real life, right?) Then they set aside their tithing, and divide the remaining amount into saving & spending. However, make sure the given allowance is applicable to their choices, such as, if the child hasn’t practiced their piano lesson material appropriately, they pay you back (because you’re paying for the lessons) a pre-determined amount; if they didn’t complete some of their above-and-beyond chores reasonably, and you have to redo it, you reclaim some money back, etc. Also, everything they earn has to cover THEIR expenses outside of the home, such as birthday presents for friends, admission to movies, treats at the store, new Wii game, lunch money, etc.

    Lots to think about. THanks for the great comments!

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