Do You Give Your Kids an Allowance?

Does giving a child an allowance help him learn how to manage money when he becomes an adult?

I believe it does. If a child doesn’t receive an allowance and learn the value of money, I believe he will become a poor manager of his income when he becomes an adult.

Lots of parents don’t even think about teaching their kids about money until they are about to leave for college. I think that is too late.

If you give your kids an allowance they will learn how to manage money. They will make mistakes, but at least you are there to guide them down the correct path.

Giving them an allowance will also help them to stop and think about how they want to spend their money. They will soon catch on that once the money is gone, it’s gone.

I have also noticed that my kids have a greater appreciation for things they purchase with their own money.

I think kids as young as four can begin to learn how to manage money. That’s also a good time to start teaching coins and their values.

Some suggest paying them an amount equal to their age each week. That would mean $6 a week for a 6 year old (or $24 per month). If that is too much, figure out an amount that works best for your situation.

The goal is to teach your child that money has value and how to manage it.

As they get older, create a list of items they will be expected to pay for themselves. This can mean money for clothes, movies, entertainment, candy, etc.

My kids earn their allowances by doing specific chores on a regular basis. However, there are chores that my kids are required to perform that are not tied to an allowance. They are also able to earn extra money by performing extra chores.

Some people don’t think that allowances should be tied to chores, but I believe it gets them into the mindset of earning their pay. When they become adults, no one is going to just give them money. They will have to go to work to earn their paycheck.

We also use the 80-10-10 rule where they are required to give 10% to charity, save 10% and the remaining 80% is theirs to spend.

What are your thoughts on kids receiving allowances? How do you manage their spending? Are the allowances tied to chores? Let me know in the comments below!

Related Articles:

Teaching Financial Responsibility to Kids

Manage Your Student Loan Debt

Why You Need an Emergency Fund

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14 thoughts on “Do You Give Your Kids an Allowance?

  1. So far we haven’t started an allowance with our 8 y.o. She just puts all her money in the bank and never wants to spend it! I would like to teach her this summer about investing and stocks though. I think she would enjoy thinking of a company she knows, like Pepsi/Frito Lay, and following it.

    I imagine when she starts to want things like clothes and such we will start the allowance process.

  2. We’ve always linked chores, and otherwise helping around the house, with allowances. :) My kids are 13 and 9 (and 19 months – but he doesn’t count yet ;) ). The big kids get $5 a week; right now they’re putting most of it aside for spending money, for a trip we’re taking this summer. We don’t just automatically give them $5, though! For any chore they have to be reminded to do, they lose a quarter. Also, if I ask them to do something extra and they have an attitude, they lose a quarter. It works well for us. :D They learn quickly that if the job isn’t well done, they don’t earn the full pay.

  3. I appreciated this article! I do not currently have children, but once my husband graduates from his Master’s program, I hope to be a stay-at-home mother myself. This topic is one that I have been mulling over in my mind. I have heard people mention that you should not tie chores to money (as the children should just help out without incentive), however, like yourself, I still believe kids should become accustom to “working” for things (including their spending money). I like your suggestion, of having chores the children do for pay, and chores that are expected without pay (to contribute to the family).

    • I definitely applaud the fact that you are planning to stay at home when you have children. For some people, they just dive right in and end up having to go back to work shortly thereafter.
      Thanks for your comment!

  4. Thanks Leigh! I am really excited about being a stay-at-home mom (& wife); supporting my family, volunteering, and just living life to the fullest! My husband & I hope to internationally adopt as well, and foster to adopt in the U.S. (once we have more experience with children). When you visited my blog -and I checked your blog out back- I was super excited to see that you were a stay-at-home mom & wife. Most of my closest friends -that I grew up with- are very into the feminist movement. I totally believe in women’s rights, but they seem to see my decisions surrounding children as setting the movement back. Which has been hard. So, I was really happy to see someone else who did (& is doing) what I want to do. I’d love to pick your brain and ask you questions about it someday, if you don’t mind. :)

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