Raising Responsible Kids: Allowances


We’ve been giving the bigger kids small allowances for a few years without much of a strategy.  We would often forget and have to catch up after several weeks, and while the intent was for the kids to give to the church out of their allowances, I admit that we usually dug around in our wallets as the offering plate started around and pulled out one of our own dollars for the kids to toss in.

We have recently refined our approach to allowances, and we started including our youngest in the process.  Of course, at four, she has no concept of money.  If she were our oldest, we wouldn’t have started with allowances this young, but she wanted to be included so we agreed.  She only gets a dollar a week, but does she ever feel like she has arrived, what with her little princess wallet and her weekly allowance.

She has been diligently collecting her dollar every week, and each allowance day she gets out her wallet and takes out all of the money inside and sits on the floor and counts her dollars.  She can tell you at any given time how many dollars are in her wallet.

Yesterday when we were leaving the house to run a few errands, she asked if she could buy a toy with her six dollars.  And I can tell you one thing for certain, you’ve never heard anything so cute as her little preschooler’s voice saying with pride, “my six dollars.”

I told her she could bring her wallet along and we would see what we could find.  I decided to take her to Five Below (a store where everything is, you guessed it, five dollars or less) so that she could easily find something within her price range.

After perusing the aisles and picking up and discarding about 10 options, she finally landed upon a squishy, spiky, plastic ball for $4.

At that moment, the rain stopped, the clouds parted, the sun shone, and the angels sang.

THIS was the toy she had been waiting for all her life.  Or, at least, one worthy of her precious six dollars.

We marched up to the counter and paid the clerk and left with her newest prized possession and two dollars left in her princess wallet.

She was delighted to show off her new ball to everyone who would listen for the rest of the day, although I’m sure the novelty will wear off quickly.  Yes, it’s another piece of junk that will end up in the garbage.  But she had her first experience with saving money and finding something she wanted to buy and paying with her own “dollars.”  Over time, she will begin to understand the value of a dollar.

Is it necessary to start this young?  No.  But kids also deserve more credit than they are usually given in this day and age.  When my grandfather was six, he had his own pony to take care of.  Kids CAN learn the value of money and responsibility when they are young, if they are allowed to do so.

* * *

What’s the Point?

The purpose of giving a child an allowance is to teach them money management.  It’s common to hear adults bemoaning the fact that their kids have an entitlement complex and don’t appreciate what they have.  I, myself, have been guilty of this sentiment concerning my own children.  Kids don’t take care of their things simply because they have too much and they’re given everything they ask for on a silver platter.  All too often, they haven’t learned to work for anything.  So we have changed how we run things around here, hoping to teach our kids responsibility and appreciation for the value of things.

How it Works

1. Allowances are tied to housework or chores. We do chores because we are part of the family.  No one pays me to do laundry or make dinner.  Likewise, the kids don’t get paid for doing their routine chores.  They can, however, earn money for doing extra chores.  For example, we paid my 7-year-old a few dollars to help us in the yard on Saturday while her siblings played with their friends and earned nothing.  This, however, was in addition to her allowance.

2. Allowances are age appropriate. My kids each get a different amount, based on their ages.  Figure out what you are spending on unnecessary toys and novelties and go from there.  It’s probably wise to provide them with a little LESS than you generally spend on them, so they learn that they can’t have everything they want.  They will learn to prioritize and save up for the things they really want.

I buy my kids everything they need, and then if they want candy, gum, toys, video games, then they must save their allowances and buy it themselves.  As they get older, if they want a certain brand of clothing, then they will have to pay the difference between what it is that they want and the acceptable alternative that I would have purchased for them.  I haven’t gotten there yet, though.

I’m not spending more money than I did before. I am just putting the responsibility on them to decide how they spend their discretionary income.  I was never one to buy my kids a lot of toys for no occasion, but now I don’t so much as buy them a pack of gum.  They have to use their allowance. And that is key. You can’t expect them to learn the value of a dollar if you buy them everything they ask for.  Then the allowance is meaningless.

3. Allowances are the child’s to spend freely, but with parental oversight.

Love And Logic suggests letting them have free reign over their money and letting them learn the hard way.

Rosemond takes the philosophy that the allowance is not their money, but rather, it is ours, and we are allowing them to use it to teach them how to spend wisely.  I prefer this philosophy, frankly, and that is the approach I take.

Therefore, when my son begged to use “his money” to buy a treat from the ice cream truck last week, I informed him that it is “my money” that he has in his possession, and no, we were not doing the ice cream truck that day.

I try to let them to spend their allowance how they want, within reason.  I do guide them somewhat, but the only way they will learn is for them to make mistakes.  Basically I have veto power, but I allow them a lot of rope.

We also don’t make them divide it up into giving and saving and investing and all that jazz.  We do teach them to give 10% to the church on Sundays, but beyond that, their allowance is meant to be spent, or perhaps a better word is managed.  Of course, they will learn to save up for bigger items, but we don’t put any specific portion into the bank.  When they get checks from relatives for holidays, those go into their bank accounts, and once over the past couple of years, my son collect enough allowance that he decided to put some into the bank.  Which was probably a clue that he was getting too much allowance, or, more likely, that we were still buying him too many incidentals.  As I said above, we have refined our allowance system, and it seems to be more useful now.

But back to the point — the point isn’t to save for college.  The point is to learn how to spend and save and manage money on a daily basis.

* * *

Here’s a real life example where I did let my son make his own decision about how he spent his money, even though I had a strong opinion on the matter.  I’m so glad I did.

A few weeks ago, my son had saved up enough to buy a video game.  We went to Game Stop, his wallet in his pocket, to look around.  It didn’t take him long to find what he wanted — the newest Pokemon game for his DS.

We went to the counter to make the purchase, and they guy behind the counter asked him if he wanted to reserve the new Pokemon manual coming out in a few weeks.  I looked over at my son, giving him the opportunity to make this decision for himself.

The store clerk got right down on my son’s 10-year-old level and explained with great enthusiasm that this book held all the keys to the Pokemon games, that it would give him all kinds of information, and all he had to do to reserve it was to pay $5 today and then when he came to pick it up, it would be $15, and that was 20% off the retail price.  This guy was a born salesman, and my son is 10.  I was pretty sure he was going to fall for it hook, line, and sinker.

My momma bear instincts wanted to say a chilly no-thank-you and walk out without the game or the reservation for this fabulous Pokemon resource.  I rather resented the hard sell, but then again, I suppose I did open the door for him.  Instead of intervening, I just stood there and looked inquisitively at my son, feigning nonchalance, to see what he would say.

“So,” the clerk wrapped up.  “You wanna do it?”

My son contemplated for a second and then shook his head and said, “Nah.  20 bucks is a lot of money.”

I couldn’t have been prouder.  And between you and me?  I thought he was going to reserve the book.  I was so relieved when he did not.  He had $20 left in his wallet, so technically he could have afforded it.  And incidentally, if he had decided to reserve it, I would have had him set that money aside and save it so he had it when the book came in.  Although first I might have asked him a few leading questions, to get him to think carefully about spending that much money.  Fortunately, he made the wise decision on his own.

* * *

As an aside, I keep their wallets for them. I don’t trust them to not lose them, and I fear that if they are in their rooms, a friend might be tempted to borrow something and not return it.  It’s just easier if I hold onto them, and they ask for them when they want to buy something.  It also helps me keep tabs on what they are spending as they get older and have more freedom.

I should also add, this is by no means the end all be all to allowances.  This is what we’re doing based on the few books we’ve read that address the topic; I’m sure there is room for tweaking.  I’ll keep you updated if we change anything major.

Do you do allowances?  How does it work in your house?

See all posts in this Raising Responsible Kids series.

Disclaimer: I am by NO MEANS a parenting expert of any sort.  I am just sharing some things I’m learning as I navigate the muddy waters of motherhood.  I figure, if they work for me, they may work for someone else.  Good luck!

Disclosure: All links to books are Amazon affiliate links.

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30 Responses

  1. We give our kids $2 for allowance if they memorize a bible scripture each week. I put a scripture on a recipe card in their bathroom each week and if they can recite if for me on Sundays……they get $2! They love it. We aren’t crazy Christians by any means…. but this seems to be a good way for our family to get the Word into them.

    We give extra allowance for big things like yardwork. We also believe they do chores every day just because they are part of the family.

    We are having a garage sale in a few weeks. I will let them have their own table with some of their own toys. We are going to Disney in the fall and I want them to have some money they can spend themselves.

    And I won’t lie. We have bribed them to try different foods for $ before. It’s hilarious!

  2. Even though you aren’t an “expert”, there is no encouragement equal to that of a real mom. Thanks for sharing! When school gets out for the summer we are going to implement all sorts of new policies around here!

  3. I have a funny story on this one. My approach is very similar to yours however we do start them young and we do the 1 dollar per year of age gig for now. My oldest will be 10 soon and I will be adjusting hers to allow for more of her own spending. That said, My four year old will also be 5 soon. I made a decision to switch her allowance to $5 and my big girls to $10 a tiny bit early because I was tired of fumbling around all those 1’s each week. When I told them my 9 year old was of course fine with it. My four year old looked at her $5 dollar bill and cried…she wanted 4 dollars…She had to have 4 dollars because by golly four looks like more than 5 right? So I gave her $4. and before her birthday I think we have to have a more serious money talk!!!

  4. We just started giving our oldest an allowance. I don’t think she really gets it yet. She knows that the money is hers and she can save it up and spend it. I’ve done the same thing with her birthday and Christmas money in the past. She loves being able to take her money to the store and pick out what she wants. I’m hoping it works well with her. We also just started assigning her chores, but I still have to remind her to do them every day.

  5. My almost 11 year old gets paid 20.00 every two weeks and she gets her money on “payday” when Dh and I also dole out our cash spending $$ for the next few weeks. The money isn’t strictly tied to her chores, but if the chores are not done then no $$. I guess we are in the grey zone there, but I look at it this way….yes, in the real world you don’t get paid as a grownup for not doing your chores around the house. It is an expectation and part of how the world spins. BUT as a grownup you DO get paid for the job you go to. You have to tend to that job, have initiative and get the job done within the time constraints and do it well and then you either get paid or fired. One of our goals for DD is to help her be ready for her first job or career or whatever and that starts at home.

  6. Wow! This is a subject I know we’ll have to tackle eventually but hadn’t put much thought into yet. Thanks for such a thorough rundown. Based on what you wrote, I could see us doing the same thing with one small adaptation. Rather than taking my daughter to the store to find something she wants to buy, I think I’d rather tell her to wait and make a list of things she wants when she sees / thinks of them.

    That way “hopefully” she decides she wants something before she has the money to buy it, and she starts from the beginning saving for something really important to her. I’ll probably start the list for her, by adding a couple things that she says she wants before we start doing allowances.

    Thanks again. Just reading this post has helped me think through and prepare for an important event in my children’s lives!

  7. We have recently started giving our 12 and 10 year old daughters a bit more pocket money – but with conditions attached – it has to cover ALL additional expenses – youth club, tuck shop, sweets or magazines and like you any clothes which are above and beyond what I consider necessary.

    It has been going about 2 months.

    In addition, anything they manage to save before our summer holiday to New England, we will match so they can double their savings.

  8. Our kids are 19, 18, 16, 10. We’ve never done allowances. We’ve always worked in ministry, and have never been able to afford extra money to give to the kids to spend. They seem to understand this. Neither my husband nor I ever got allowances as children, so we don’t feel this is really required family culture, or necessary. Our kids get money on birthdays & Christmas, and if they find jobs to do. Occasionally I’ll pay them to do jobs around the house that are above & beyond their normal chores.

  9. I’ve talked about our policy elsewhere, but I’m not one to keep my mouth shut. 😉

    We are Dave Ramsey fans and we have implemented his commission system, somewhat. Our kids get paid for chores. We try to remember to pay them every two weeks because that is when Husband gets paid. When we first started doing this we paid them for some chores that they now do because it is part of their role in our family. For example, we would give them a mark (worth a quarter) for cleaning their room when we first started this, just to help them tie the concept of work to money. Now, however, they clean their rooms because it is expected of them. The standard chores that can earn a mark are sorting/folding/putting away laundry, vacuuming the kitchen, dusting, and my girls earn money helping look after the toddler at soccer and tee ball games. BUT–these are chores that will get done no matter what, so if they have a bad attitude about it, they don’t get paid. So basically it is their choice to do the job with a good attitude or not. My 4 yo gets a mark for helping me unload the dishwasher (he hands me the dishes he can’t put away), whereas my big kids would not get that.

    They all have to clear their plates at the table. They all have to pick up the living room every evening. These are some of the things that are just part of being in the family. I don’t get paid to do the dishes, cook , do laundry, etc. but I do have access to money to spend on things for myself for fun, so I think it is fair to pay my kids for some things. We’re trying to help them understand that money is earned, not deserved.

    We do split their money–10% give, 10% save, 80% spend, roughly (not exact since we pay in quarter increments). The save is for long-term saving, the spend can be used whenever, but they realize they have to save up spend money for bigger purchases. And, like you, we don’t buy them the wants anymore, we tell them to do more chores and save their money. They are used to hearing no now. 🙂

    1. Nicole, that’s interesting. I’ve never read Dave Ramsey’s books, but I know he’s highly regarded for financial advice. I’m interested in his different approach to paying for chores.

      What would you say they earn every two weeks? We decided to give ours $1, $3, and $5. I expect that’s kind of low, but it seems to be enough.

      1. I emailed my response, but I’ll put it here too. On average each kids gets 2-4 dollars per pay period, just depends on what went on during those weeks. We will sometimes give an extra mark for a harder job, or if we want to reward them for an unexpected good choice (this is only once in a while though).

        Dave Ramsey’s approach is pretty common sense stuff, he just has a very effective way of getting it across and helping people implement it, I think. One thing he did with his kids was tell them he would match whatever they saved for a car when the time came. His oldest took him up on it and got a decent car, and when the other kids saw that they kicked their savings into overdrive and he had to put a cap on what he would match! I like that idea for when my kids get older.

        Also, once his kids got old enough to manage a checking account, he and his wife stopped paying for anything for their kids. They figured out what they spent on them in a month and gave that to them each month to manage. They had to buy their own clothes, pay for food that was not from home, pay fees for sports, etc., and so on. This taught them how to manage their money and to see what Mom and Dad were spending on them in a given month. I think that is also something we will be implementing when our kids are older.

        1. Loving that idea. My parents did that at some point. I remember my dad helping me balance my checking account. Oh that was FUN. NOT. lol

  10. We do allowance, but it isn’t consistent by any means. The kids can earn money doing things above and beyond their normal daily/weekly chores. We are more consistent in the summer months, but for some reason the school year is full and it just slips our minds.

  11. Wonderful job with this. I agree with most of what you said here. 😉 We do give allowances–I wrote about it on my blog if you’re interested: https://mylifeonthewildside.blogspot.com/2010/02/intentional-parenting-part-4.html. My girls are older than your kids, of course, so our allowances are much bigger because we expect our kids to pay for clothes and entertainment and pretty much everything.

    I love the story about your son. That’s pretty much been our experience too. Making kids responsible for their own money makes them, well, responsible. It’s funny, though, how each child’s money-mentality is formed. One of my kids saves to buy more expensive clothes–she’d rather have fewer pieces of higher quality. Another has become cheap, cheap, cheap–she’d prefer to buy her clothes at Target. Neither is wrong–just different. That’s so interesting to me.

    1. I’m going to read your post asap. I’m curious where we diverge. 😉 I have to add, this is in no way set in stone for us; it’s just based on what we’ve read and what seems to be working at the moment.

  12. We’ve been so haphazard about our daughter’s allowance. She started getting one at 5 with all the caveats mentioned in Jo-Lynne’s post (gum, toys, stuffed animals, etc., were all supposed to come out of her allowance) but we’ve really fallen off the wagon (and gone back to buying her more than we should). She’s been asking about it now (she’s 7), and my husband and I have come up with our plan: $7 ($1 per year of age), out of which she must give 10 percent to charity (generally the church offering plate). We’ve promised her some bang for her buck, however, in that we will match a portion of whatever she puts in her bank account for long-term savings (like an employer’s 401(k) match). She’ll get a little extra for doing chores outside her normal ones. Now, we just have to stick to the plan. I really believe that an allowance, if given consistently with clear expectations, can eliminate that “entitlement complex.”

    Incidentally, a friend of mine makes her kids use their allowance money to “buy back” toys and clothes from her when they don’t clean up after themselves–she just picks up whatever is left on the floor and “repossesses” it until the end of the week, at which point they have to decide if they want it back and pay her for it. I take toys, too, when my kids don’t want to clean them up, but I end up giving them back the next day without penalty. I’m going to try a payback approach once the allowance is in place.

    1. Liz, my post was long enough, so I didn’t go into that, but we do the same — they pay us when they leave shoes or coats outside overnight (drives me NUTS – it’s so irresponsible) and I have threatened about the picking up of toys around the house, but I never had to follow through. I also have told my kids they will pay me to “chauffeur” them to school if they miss the bus.

      I really like the matching idea. I think I may implement that.

  13. I just wanted to mention that I love your Raising Responsible Kids series! I don’t have much to comment on or contribute, since my little one is only two, but thinking about some of these issues now can only help me be prepared as she gets older. Thank you for sharing your insights!

  14. JoLynne,

    I’ve really enjoyed this series. I’m not a mom (not close! I’m 24!) but I think you are such a great example of a thoughtful mom that follows through with teaching your children responsibility.


  15. What to do for allowances is always an interesting topic of discussion for a group of moms. I just love the fact that there are so many different ways to do it. Here’s what we did, and it seemed to work great for us. We started by doing what our parents did which was give 10 cents per year of age per week. (Our five year old got 50 cents a week.) I had trouble remembering to pay them every single week, and it really didn’t go very far, so we switched to $1 per year of age per month. (Now the five year old got $5 a month.) Although we did have separate jars for spending, saving, and tithing, allowance wasn’t tied to doing chores. We figured it was a tool to help us as parents with our responsibility to teach them wise money management. And, we figured they should have learned the lesson by the time they were twelve, so that’s when allowances stopped in our house. If they wanted personal spending money after that, they needed to find a lawn mowing or babysitting job. And they did.

  16. We give allowances of $5 for the 11 yo and $1 for the 5 yo.
    They are based on chores…extra chores, not the making the bed put away your stuff basic chores. For the 11 yo if he has to be reminded or gives any attitude about a chore he gets $1 deducted. (that only had to happen once 😉 )
    He has 2 savings accounts where he usually puts $5-$10 a month away. He is saving for a CAR!!
    His local bank acct he uses to get money for gifts for friends or to save up for big ticket items. We will kick in 50% of some of these things…like a baseball pitchback.
    We also supervise the spending. A new rule we have is you cannot take more than 30% out of your bank account at one time.
    This proved helpful when he announced he wanted to get an ipod touch! So he saved extra $, sold some DS games etc and took a little from savings. Of course he had to wait about a month, but it deferred that instant gratification. He gets to pick it up today.
    Both my boys see me look for sales, use coupons etc., so it helps them see how they can make their dollar go even further, and sometimes they have to wait to get the best deal.
    I want to teach them money skills now so when they are teenagers they are not conspicuous consumers!

  17. We do not tie allowance to chores. We give them $1/year old/every 2 weeks. This is way less than I would spend otherwise.

    I do not give them cash-we use an online accounting system. I know many people think that cash in hand is easier to teach with, but not in my house. I think they get it from me-they see cash and run to spend it! LOL

    I also find it’s easier to break their allowance into their accounts for giving, and college as well. 70¢ is easier to move virtually versus physically.

    We do allow them to earn extra for extra chores, and we’re experimenting with a points system right now for behavior. They keep all their points or earn back lost points and they get their allowance. So far it’s working well.

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