Kids and Money: Earning an Allowance from Work and Chores

When it comes to allowances, there are differing opinions among well-meaning and responsible Christian parents. Some parents think that you should just give kids money as they need it. Others think that you should give them a set amount of money or an “allowance”,  not necessarily related to specific chores. Other parents that think that kids should be required to earn any allowance by doing chores.

Personally, I think that are two important potential benefits of requiring your kids to work for allowances

• to help your kids connect working and money

• to create a vehicle for kids to get money so they can learn to manage it

However, that brings up another question: Should you pay your kids for every little chore that they do around the house? I recently read about a strategy described by Dave Briggs, author of a new DVD resource “Raising Financially Freed-Up Kids”. Dave suggests that parents develop three different lists of jobs for their kids.

List #1: Mandatory Jobs for no Pay. These are jobs kids must do just because they’re part of the family. Examples may include making their bed, cleaning their room, setting the table, and feeding the dog.

List #2: Mandatory Jobs for Fair Pay. These are also jobs the kids must do, but they receive fair pay when the jobs are completed and completed well. Examples may include mowing the lawn, washing the car, and shoveling snow.

List #3: Voluntary Jobs for Fair Pay. If the kids choose to do any of these jobs, and if they complete them well, they get fair pay. However, there is no penalty for not doing these jobs. They are strictly optional. Examples may include washing windows or weeding the garden.

If you have been a parent for any time at all, you know that our best plans sometimes aren’t always met with the same enthusiasm from our kids. For instance what happens if the kids do not complete the jobs in List #1 or List #2? Or what if they don’t complete the chores well, or if they complain while doing them?

Should you withhold payment if the kid doesn’t complete a List #1 or List #2 job? Since these are mandatory jobs, not completing them should not be an option. Plus, some kids are not motivated by money, so withholding their pay won’t come across as much of a penalty. Instead, Briggs recommends finding something your kid really cares about and make the penalty connected to that. If the kid loves to play soccer, the penalty could be no soccer for a period of time.

Briggs also recommends giving kids some latitude as to when a more time consuming mandatory job must be done. For example, require that the lawn be mowed sometime between Thursday and Saturday afternoon.

It can also be helpful to use different approaches for different kids. Briggs recommends that parents experiment with paying kids their full weekly allowance at a fixed time every week (“the paycheck method”) or paying a portion of their weekly allowance right when each job is completed (“the commission method”) because some kids are more motivated by one system over the other.

How should you decide how much allowance you should give your kids?

Briggs says, “The biggest single determinant is what demands you are going to make on your kids as to what they have to pay for."  For instance, if you require your son to pay for his own clothes, paying him $20 or $30 to mow the lawn each week may be reasonable.
You can also slowly increase the list of things that your kids need to pay for out of their allowance money. At age eight, they could be required to use their money if they want a soft drink. By age fifteen they could be buying all of their clothes, and by the time they drive they could also be responsible for gasoline and car maintenance.

Each year on the child’s birthday you can increase his/her allowance and add a category of spending that they are responsible for. By the time he/she graduates from high school, your young adult could be responsible for virtually all categories of spending: clothing, entertainment, toiletries (this can be a real life lesson for young ladies!), haircuts, books and music, gifts for others, and their share of the cell phone bill. Working outside the home for a paycheck brings additional learning experiences, and those opportunities should be considered as the child gets older.

Another great learning experience is to have your son or daughter handle the entire family budget for a couple of months before heading off for college – paying all of the bills, reconciled the checkbook, etc. He/she will learn what it actually costs to run a household because real life includes much more spending responsibility than just going to the movies and buying clothes.

Teaching your kids to truly manage money takes effort, but it is truly worth it! The joy of raising responsible, money-smart kids is an unbelievable payoff!