Children and Allowance – When to Start and How Much

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Long before we enter the working world, wage disparity can occur in the form of allowance.

I don’t remember talking to my friends about how much allowance they made, but I am guessing the subject probably came up.  As a parent, allowance is definitely something to consider carefully.  You don’t want to give your child too much nor too little.

-“This is an emergency!  I need to know all of your allowances!”

-“Why?”

-“Because you are all still friends, even with different allowances!  I have to know how you do it.”

-“Do we get different allowances?”

-“I don’t know, do we?”

From the kids’ show Arthur, in the episode More! where Arthur’s little sister, D.W., is angry she earns less allowance than her friend.

When Should Children Get an Allowance and How Much Should it Be?

Determining the Work to Be Done


Before you even decide how much to pay your child, you must decide on the work that goes along with the money, or if the child gets the money free and clear without work attached to it.

If you are a follower of Dave Ramsey, you know that he prefers the word “commission” over “allowance.”  He advocates paying children for certain jobs (and if they don’t do the jobs, they don’t get paid) but also giving them other jobs that they don’t get paid for.  They must do the latter jobs because they are members of a family, and everyone in a family helps each other.

This is what we do with our kids.  My son has to clear the plates after dinner because he is a member of the family and can and should help mom and dad with some work around the house.  However, he gets paid for sweeping the kitchen floor after dinner.

Other people don’t like to tie money to jobs around the house.  Instead, kids help out when they can and are able, but they get a certain amount of money each week, regardless.

How Old Should Children Be When They Start Receiving an Allowance

According to Bankrate, “As soon as your child begins to express a sincere interest in material wants (as in, ‘I want that!’), it’s time for an allowance.  Depending on the child, that’s probably around the ages of 3 to 5.”

We started our oldest two children’s allowances when they turned 3.  However, our youngest is only 2 but doesn’t want to be left out, so she has a few small chores she has to do, such as pick up her toys every night, to earn her money.

How Much to Pay for an Allowance

Allowance

What kind of allowance do you give your child?

According to CNNMoney, across all age groups, the average allowance is $785 a year, or $15 a week.  Of course, that varies with age.

The parenting site Kaboose states, “In a national 2005 survey of nearly 1,500 children by the research firm Yankelovich, the range in allowance for 6- to 11-year-olds is $5 to $9 a week.  For 12-to 17-year-olds, the average is $10 to $19 a week, and around 15 percent of 12- to 17-year-olds received $20 to $49 weekly.  (Notably, the study found that fewer than 60 percent of children ages 6 to 17 get any allowance).”

Other experts suggest a dollar per year of age or to pay them half the amount of their age, neither of which formula I feel works well.  For a 13 year old, you could set an allowance of $13 or $6.50 depending on these two strategies.

A better idea seems to be to pay them based on what you expect them to do with the money.

If you expect your 14 year old to use her allowance as fun money, then it doesn’t have to be as large as her friend’s allowance if the friend is expected to buy her own clothes, pay for hot lunches and her entertainment from her allowance.

Our little ones (2 and 3 years old) get 5 cents per chore that they do.  Our 8 year old son gets 25 cents per chore.  He has at least 4 chores a day including small tasks like putting away his clean clothes.  His bigger chores earn him more money.  Once a week he is expected to clean the bathroom thoroughly, and he gets $3 for that task since it is more involved and labor intensive.  All told, he can earn up to $10 per week, but he rarely does because he skips out on chores frequently.

Finally

Determining how much your child is paid for his allowance depends on what you want them to do with the money and your own financial situation as well as your child’s age.

Likewise, your own personal beliefs and philosophy will help you determine whether your child should get an allowance based on work he performs or if he does work because he is part of a family and gets his allowance separate from any chores.

Editor’s note: Though it’s important to be consistent you, as the parent, can change up your allowance system if you feel things aren’t working out well or if situations change.  Another important aspect to discuss is setting up expectations for what your child will do with the allowance (that’s an article for another day).

Do you pay your kids an allowance?  If so, is it tied to specific chores?

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Published or updated June 19, 2013.

Comments

  1. This is something my wife and I have been giving increasing thought to as our oldest is 5 and the next oldest is 3. We’re likely going to start something with our 5 year old this year and agree that the $1 per year of age seems to be a bit much – at least at this stage.

  2. Great overview Melissa! We have been doing exactly this with our four kids. All of them started with chores around the age of four. We expect them to do certain chores around the house just because they are part of the family. They each have other specific chores they are required to do through the week, plus other chores they can sign up for if they want extra money. Our youngest (5) can earn up to $2.50 a week doing the basic chores. Our oldest (12) can get up to $10. I’ve already seen how this has really developed their ideas about money as I’ve watched them give, save and spend what they have earned.

  3. This is an awesome perspective Melissa. You need to establish when it is proper to start giving the kids cash allowances and the amount that you have to give. However, parents must do this with caution since it is not right to be doing this prematurely.

  4. Interesting. Our oldest just turned four and so far we haven’t considered the idea of an allowance but maybe it’s something I’ll bring up with my wife. I like the ‘pay as you go’ philosophy.

  5. Our children had chores and received an allowance. We required them to save 50% of their allowance and any money they may receive. When they became teenagers, I give an additional incentive of matching their savings when it came time to buy a car. It worked well, because my children are successful adults without any consumer debt. and financially responsible.

    • I really like the matching idea to incentivize saving. WIll be implemented soon. Allowance is just another way to instill sane financial habits and attitudes towards money.

  6. Thanks Melissa. We’ve definitely found that associated money gained with effort given has helped our young kids appreciate money in as much as they can at the moment. It’s a strategy we’ll be developing over the years,

  7. At my house my chores are Laundry, Bathroom, Lawn, Garbage, and Dining room. Guess how much I get paid…$0.00 per week. You’re right since your kids are part of the family, they need to contribute, so give them chores. If I do extra chores such as cleaning out the garage or detailing a car, my parents will pay me for my work. You don’t need to pay kids for the work they should be doing already, but you should pay them for extra work. This should make them value hard work and the value of a dollar.

  8. I’m probably a bit bias being that I’m a younger sibling, but one thing I found stupid as a kid & as an adult in my 30s I have absolutely unequivocally NOT budged my stance on is the whole paying different amounts according to age if the kids are close in age once they’re past a certain point, maybe 8 or older. Because I guarantee you that whatever conditions the parents have attached to the allowance aren’t going to be a whole heck of a lot different when they get to a certain point. Nor are their social lives & wants. I finally brought this up to my parents one summer, my sister & I had to each clean certain rooms of the house, & she took the easier rooms & refused to switch with me. So I was getting paid less money for more work. My parents did see the light & decided that from then on, we got paid according to the work we did. Some may argue that’s how it is in the real world when you’ve been working in a place, but at most places I know of, tenure doesn’t usually mean a measly few years or less. Of course there’s no question the older one will protest, as older siblings love to assert their ‘older-ness’ & what goes along with it. Even as a kid I wasn’t like many other kids, like for example when I’d see 17 yr old seniors acting like 16 yr old juniors were immature babies, I always thought that was complete idiocy, heck, even as a first grader I found it idiotic when classmates would treat the kindergardeners like they were babies. And as an adult, a few years seems like even less to me. So I’ll never agree with treating kids all THAT different simply because they’re slightly older, not like it was something they earned.

What Do You Think?

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