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!”
-“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
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.
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).