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Allowance for My Child
Build Kids' Money Management
Skills
Compiled by:
Table of Contents
Hold a Family Summit on Allowances for Kids
Set the Right Amount for My Kid's Allowance
Help My Child Create a Spending Plan
Worksheet: Spending Plan
Create an Allowance Both My Kid and I Will Love
Real Life Story: Making Allowances
Allowances 101
Is My Kid's Allowance Working?
Am I Paying the Right Amount for My Kid's Allowance?
Choose the Best Allowance for My Child
Build Kids' Money Management Skills
Do I need this EduGuide?
Yes, if you want to develop a kid’s allowance system that teaches your child finance skills that will carry over into adulthood. This
2 EduGuide can help you determine how much allowance money for kids is best and solve parents’ problems making an allowance
ONLINE EDUGUIDE www.EduGuide.org
system run smoothly.
Am I Paying the Right Amount for My Kid's Allowance?
Choose the Best Allowance for My Child
Build Kids' Money Management Skills
Do I need this EduGuide?
Yes, if you want to develop a kid’s allowance system that teaches your child finance skills that will carry over into adulthood. This
EduGuide can help you determine how much allowance money for kids is best and solve parents’ problems making an allowance
system run smoothly.
How does it work?
l Quizzes help you know where you stand.
l Articles give you the background information you need to make a decision.
l Real Life Stories tell the experiences of real parents and real kids.
l ShortCuts help you take immediate action. Choose one or go through them all.
What will I learn from this EduGuide?
l How to set up an allowance system the whole family can live with, including how much to pay and what to expect in return
l How to help children set up a budget and spend allowances wisely
l How to solve common problems parents and kids have with allowances
Quick Solutions
l What can I do in fifteen minutes? Take one the quizzes in this EduGuide, “Am I Paying the Right Amount for My Kid’s Allowance”
or “Is My Kid’s Allowance Working?” to figure out how well your family’s allowance system is functioning.
l What can I do in an hour? Read the ShortCut “Help My Child Create a Spending Plan: A Simple Budget Teaches Practical Life
Skills” and discuss the information with your child. Help him or her get excited about creating a spending plan.
Hold a Family Summit on Allowances for Kids
Things to Do Before the Summit
1. Two weeks ahead: pick a date. Write it on a calendar everyone in the family can see. Explain briefly that the meeting is about
each kid’s allowance and make sure everyone knows the meeting is mandatory.
2. One week ahead: make copies of the Spending Plan Worksheet for each family member. Ask everyone to have the
3 worksheet finished in time for the meeting.
ONLINE EDUGUIDE www.EduGuide.org
3. One week ahead: tell everyone to keep track of all their expenses for the week on the Spending Plan Worksheet. Ask them
to keep notes on what they spend money on, what other people spend for them, and what things they need money for but can’t
Hold a Family Summit on Allowances for Kids
Things to Do Before the Summit
1. Two weeks ahead: pick a date. Write it on a calendar everyone in the family can see. Explain briefly that the meeting is about
each kid’s allowance and make sure everyone knows the meeting is mandatory.
2. One week ahead: make copies of the Spending Plan Worksheet for each family member. Ask everyone to have the
worksheet finished in time for the meeting.
3. One week ahead: tell everyone to keep track of all their expenses for the week on the Spending Plan Worksheet. Ask them
to keep notes on what they spend money on, what other people spend for them, and what things they need money for but can’t
buy.
4. One day ahead: pick a comfortable, quiet location for the meeting. Turn off the TV, the computer, and the cell phones.
Choose a setting where everyone can talk and listen easily.
5. Day of the summit: make the meeting fun. Order a pizza or make popcorn to get everyone in a cheerful mood. The topic is
serious, but the meeting doesn’t have to be.
How to Conduct a Summit on Allowances for Kids
1. Start the meeting by reviewing each person’s Spending Plan Worksheet. After all family members have had a chance to
share, ask people to name any unusual expenses they listed or any usual expenses that were not listed. Discuss whether the
list is fairly typical. Take a look at what items each person wanted to purchase but was unable to.
2. Discuss why saving is important. Ask each family member to give a reason that saving is important. Be sure to cover setting
up an emergency fund, saving for college, and using savings as a way of avoiding debt. With younger children, pick a larger
item on their want list and figure out how long would it take for them to save up for it (for a ten dollar item, saving two dollars a
week would take a little more than a month). For older children, talk about some of their longerterm goals. For example, do
they want a car for their junior or senior year of high school? How much would they need to save between now and then?
Determine together what might be a reasonable amount to set aside for that goal.
3. Talk about your family’s values regarding giving. Are there charitable organizations that your child is passionate about?
Discuss giving as a family value and also the role you feel giving should play in family life. Talk about the best way to give and
let each person establish an amount he or she feels is appropriate.
4. Establish an amount for allowances. Determine an appropriate amount for allowances and discuss how allowances will be
paid (in cash, by check, directly into a bank account, on a particular day, etc.)
5. Create a spending plan for each person. (See the ShortCut “Create an Allowance Both My Kid and I Will Love.”) Ask your
children to have the spending plan ready to show you by the time they are due to receive the first allowance after the summit.
6. End the meeting on a positive note. Talk about what everyone has learned from the meeting and what strategies you will use
when you meet next time.
After the Summit
Review each child’s spending plan. Be prepared to help out if asked, but don’t dictate how the child should spend. Rather, offer
yourself as a resource to answer questions and help set up any system that might benefit the child such as a jar for savings or
envelopes in which to put money.
Set the Right Amount for My Kid's Allowance
Five Options to Help You Decide What Is Fair, Reasonable, and Affordable
Setting the right amount for a kid’s allowance doesn’t have to be guesswork. Choose from the following options to determine a fair
rate.
1. Age Many families with preK and elementary school age children provide a weekly allowance based on the age of the child (either
fifty cents or a dollar per year of age). With this method, for example, a tenyearold would earn either five or ten dollars a week.
Some parents give kids one dollar per grade level per week (a fourth grader would earn four dollars a week under this system). As
children get older, many families switch to an allowance system that takes actual needs into account.
2. Peers Some parents base the amount on the going rate for allowances in their area. If this method seems fair to you, ask the
parents of your child’s friends what they pay their children and set your child’s allowance at a similar rate.
3. Budget In order to teach money management skills, some parents let their older kids pay for the expenses parents would usually
pay with allowance money. To figure out an allowance amount using this method, record everything you spend on your child for a
month. Determine which expenses your child will be responsible for and which ones you’ll cover. Subtract the expenses you’ll pay and
average the rest. Decide whether you want to include money for savings and for charity. When you arrive at a figure, make sure your
child understands exactly which expenses he or she is responsible for.
4. Your Childhood Allowance You can choose an allowance amount based on the amount you received as a child, especially if you
think that allowance was effective in teaching you money management. Use an allowance calculator to calculate an amount that is
equivalent to the purchasing power of your allowance when you were a kid.
5. Payment for Chores Some experts claim that chores and allowances should be separated (one is meant to teach family
responsibility, the other to teach money management). But other experts argue that money should be earned not just handed out.
One compromise between these two conflicting opinions is to provide a set allowance and mandatory chores. Additional chores earn
extra money. For example, a child may be expected to make the bed, set the table, fold clothes, and take out the garbage. If the child
wants to earn extra money, parents might agree to pay two dollars for scrubbing the bathtub or five dollars for washing the windows.
Help My Child Create a Spending Plan
A Simple Budget Teaches Practical Money Skills
A kid’s allowance is a great tool for teaching kids money management, but creating a spending plan, or allowance budget, with your
child enhances the learning. Follow these ten steps to create a spending plan both you and your child can live with.
1. Use the Spending Plan Worksheet to get your thoughts on paper.
5 ONLINE EDUGUIDE www.EduGuide.org
2. Help your child make a list of expenses. Try not to pass judgment on choices (it’s your kid’s money, after all), and don’t forget
everyday expenses such as club dues, MP3 downloads, and bus fare.
extra money. For example, a child may be expected to make the bed, set the table, fold clothes, and take out the garbage. If the child
wants to earn extra money, parents might agree to pay two dollars for scrubbing the bathtub or five dollars for washing the windows.
Help My Child Create a Spending Plan
A Simple Budget Teaches Practical Money Skills
A kid’s allowance is a great tool for teaching kids money management, but creating a spending plan, or allowance budget, with your
child enhances the learning. Follow these ten steps to create a spending plan both you and your child can live with.
1. Use the Spending Plan Worksheet to get your thoughts on paper.
2. Help your child make a list of expenses. Try not to pass judgment on choices (it’s your kid’s money, after all), and don’t forget
everyday expenses such as club dues, MP3 downloads, and bus fare.
3. Classify each item on the list as a need (an unavoidable expense such as lunch money) or a want (a new purse, a video
game).
4. Assign responsibility for each item on the list. Who will pay, you or your child? Explain that responsibility means that your kid
will have to keep track of expenses for each item assigned to him or her.
5. Brainstorm possible unexpected expenses such as a birthday party gift or replacing a damaged backpack. Decide whether
you want to set up a fund to cover such expenses.
6. Plan for large purchases such as summer camp tuition, athletic equipment, and optional schoolrelated items (a yearbook, a
class ring). Use a school calendar to note anticipated expenses.
7. Talk about savings. Buy a piggy bank for young kids, or open a savings account and teach your child how to deposit money
regularly. Talk about the difference between shortterm savings for small items such as snacks and longerterm savings for
major purchases.
8. Talk about charity. Share your values about giving of time, talents, and money. Talk about how kids can help others, for
example, by spending some of their allowance to buy items for a local food pantry or by putting their change in an animal
shelter collection container.
9. Write down the plan, sign it, and date it.
10. Evaluate the plan after a month or so. How is it working? What has your child learned from it? Is there anything he or she
wants to change? Note: Once your child's budget is up and running, check it yearly at the beginning of the school year or on
your child’s birthday to identify unexpected expenses and make necessary changes.
Worksheet: Spending Plan
Record all expenses for one week.
6 ONLINE EDUGUIDE www.EduGuide.org
your child’s birthday to identify unexpected expenses and make necessary changes.
Worksheet: Spending Plan
Record all expenses for one week.
Notes on Using Your Practical Money Skills
List items that you wanted to purchase but did not:
List items that you might typically purchase but did not in this particular week:
How much money did you put into savings?
How much money did you share with others or give to a religious or charitable organization?
Spending Plan
7 ONLINE EDUGUIDE www.EduGuide.org
My current weekly allowance is: __________________________________________
Spending Plan
My current weekly allowance is: __________________________________________
Weekly Expenses/Spending Amount
Each week, I plan to put into savings: ______________________________________
Each week, I plan to give to others: ________________________________________
Create an Allowance Both My Kid and I Will Love
How to Solve Common Allowance Problems
These solutions to typical allowance problems will help you create an allowance system the whole family can live with.
Problem: Money is very tight. I can’t afford to pay an allowance.
Solution: If the family budget is so lean that paying an allowance seems a huge hurdle or a financial crisis keeps you from being able
to pay the agreedupon amount, consider these ideas:
l Base the allowance on what you already spend on your child. Then tell him or her exactly what the allowance is expected to
cover, for example, lunch money, toy purchases, or movie tickets. That way you don’t have to look for extra money in the budget
because you are simply transferring the financial responsibility to your child.
l It is reasonable to cut allowances when the family is undergoing financial hardships. Adjusting an allowa helps teach your
child how to save when times are tight.
l If you have to temporarily suspend allowances because of unexpected bills, medical problems, unemployment, or any other
reason, explain why this step is necessary. Also, keep track of missed allowances and try to repay them after the emergency
has passed.
Problem: The child’s other parent and I can’t agree on our kid’s allowance.
8 Solution: Parents often have very different ideas on the amount of allowances, what they should be based on, and how frequently they
ONLINE EDUGUIDE www.EduGuide.org
should be given. Like any other parenting issue, this one can require discussion and compromise. If you can’t reach a compromise,
consider letting kids have separate arrangements with each parent. Keep each other informed, but let the child know that any financial
Each week, I plan to give to others: ________________________________________
Create an Allowance Both My Kid and I Will Love
How to Solve Common Allowance Problems
These solutions to typical allowance problems will help you create an allowance system the whole family can live with.
Problem: Money is very tight. I can’t afford to pay an allowance.
Solution: If the family budget is so lean that paying an allowance seems a huge hurdle or a financial crisis keeps you from being able
to pay the agreedupon amount, consider these ideas:
l Base the allowance on what you already spend on your child. Then tell him or her exactly what the allowance is expected to
cover, for example, lunch money, toy purchases, or movie tickets. That way you don’t have to look for extra money in the budget
because you are simply transferring the financial responsibility to your child.
l It is reasonable to cut allowances when the family is undergoing financial hardships. Adjusting an allowa helps teach your
child how to save when times are tight.
l If you have to temporarily suspend allowances because of unexpected bills, medical problems, unemployment, or any other
reason, explain why this step is necessary. Also, keep track of missed allowances and try to repay them after the emergency
has passed.
Problem: The child’s other parent and I can’t agree on our kid’s allowance.
Solution: Parents often have very different ideas on the amount of allowances, what they should be based on, and how frequently they
should be given. Like any other parenting issue, this one can require discussion and compromise. If you can’t reach a compromise,
consider letting kids have separate arrangements with each parent. Keep each other informed, but let the child know that any financial
negotiations must be made with the parent paying the allowance. This is especially important for parents who are separated and have
joint custody arrangements.
Problem: I keep forgetting to pay my kid’s allowance.
Solution: Take paying your child’s allowance as seriously as other financial obligations. Try one of these ideas:
l Link the allowance to your payday and get the money for your child’s allowance when you cash your check.
l For older children, set up a bank account with a debit card. If your paycheck is deposited automatically, have some of it diverted
into your child’s account. This will help encourage savings and let you teach your child finance skills like balancing a bank
account.
l If you keep a calendar, mark allowance dates on it to remind you when to pay.
l Set up a reminder on your cell phone or in calendar software.
l Pay a small penalty (a quarter or fifty cents) for each day the allowance is late. This will demonstrate to your child what happens
when people are late paying their bills.
Problem: My kid keeps losing allowance money.
Solution: As tempting as it may be, don’t make up the money. Instead, do the following:
l Help your child search for the money.
l Help your child figure out why the money was lost and come up with possible solutions for next time. For example, if your
child’s pocket has a hole in it, he or she could buy a wallet with the next allowance.
l Provide your kid with something to keep the money in such as a bank, an envelope, or a jar.
Problem: My child makes poor financial decisions, so I have to decide how to spend the allowance.
Solution: Many parents have trouble relinquishing control over how allowance money is spent—especially when a child spends
wastefully. Unless the purchases are unsafe or violate your family’s values, don’t interfere. Let your kid make mistakes and learn from
9 ONLINE EDUGUIDE www.EduGuide.org
them. After all, making mistakes now with small amounts of money is far less costly than similar mistakes would be when your child
grows up.
Problem: My child makes poor financial decisions, so I have to decide how to spend the allowance.
Solution: Many parents have trouble relinquishing control over how allowance money is spent—especially when a child spends
wastefully. Unless the purchases are unsafe or violate your family’s values, don’t interfere. Let your kid make mistakes and learn from
them. After all, making mistakes now with small amounts of money is far less costly than similar mistakes would be when your child
grows up.
Don’t rescue your child when he or she has misspent an allowance and doesn’t have money for something important. For example, if
you expect your child to pay for lunch from an allowance and the money is gone, have him or her make a lunch to take to school.
Problem: The allowance doesn't cover special expenses.
Solution: Consider teaching your child to manage larger amounts of money by giving a special allowance for specific expenses. For
instance, you could set up a gift allowance for birthday and holiday gifts.
Clothing allowances are a good way to teach older kids how to manage substantial amounts of money. Give your child the money you
would spend on clothes for back to school or the school year and explain that the money is only to be used to buy clothing. Make sure
he or she understands that you won’t be adding any more money to the budget later. If your child asks for advice, give it, but let him or
her make the spending decisions and live with the consequences.
Problem: When my kid doesn’t need money, he or she doesn’t do chores.
Solution: Give your child a set number of unpaid vacation days a year. Explain that there is no penalty for not doing chores (other than
not getting paid) for this number of days, but after that, there are consequences such as decreasing the amount of the allowance until
your child demonstrates reliability. For example, if your teen has used up the vacation days and decides not to launder the family
towels, you could dock the clothing allowance.
Another tactic is refusing to do a chore that your child expects from you such as driving to sports practice or packing a lunch. Point out
that since your child isn’t keeping his or her part of the bargain, you’ve decided not to keep yours.
Problem: My kid spends the allowance immediately.
Solution: This problem will likely solve itself if you don’t intervene. This means not giving advances on future allowances or paying for
things the allowance is meant to cover. Let the child experience the consequences of being broke. Your child may be more careful the
following week, or it may take several weeks for the lesson to sink in.
If the allowance system is set up for the child to add to savings and give to charity, you’ll need to address the consequences of
“borrowing” from the other allowance accounts. One tactic is to let the child can draw money out for specific expenditures and pay back
extra money. Since your child is managing the money, let him or her decide on and enforce the penalty.
Problem: My child complains that the allowance is too small.
Solution: This is a great opportunity for your child to learn financial negotiation skills. Have your child to make a formal proposal for an
allowance increase that includes the following information:
l Why the increase is needed
l A list of expenses
l How the increase will be spent
l What additional chores the child is willing to do to get the increase
After you read the proposal, explain why the allowance is at the current level. Let your child respond. Based on your child’s proposal
and the negotiations, decide whether or not to increase the allowance.
Problem: My child lends money to siblings or friends who don’t pay it back.
Solution: This is a lesson that can be very difficult for a child and the parent who wants to cultivate generosity and kindness. These
steps can help.
l Find out exactly what happened.
l Listen carefully to your child’s explanations and feelings about the incident.
l Discuss the damage lending can do to a friendship as well as praising your child’s generosity.
l Help your child find a solution.
l Discuss what your child will do differently next time.
If the loan was made to a sibling, include that sibling in the discussion. If possible, try to lead your kids to an equitable solution such
as the borrower’s next allowance getting paid directly to the lender—with interest.
Real Life Story: Making Allowances
A Mom Introduces Her Kids to the World of Money
Marie Marfia
The experts say that giving your children an allowance helps instill a sense of the value of money. Children’s allowances encourage
them to establish spending priorities, set goals, and save up for what they really want. With this in mind, I dutifully offered my children a
dollar a week when they were young and then waited for the miracle of fiscal responsibility to take root in their brains.
An allowance would have been a more effective training tool if I'd actually paid my kids. Frequently, I’d forget to get cash before payday
and then offer to take the kids shopping at Goodwill instead of paying them in cash. At the store, the kids' purchases would eerily
reflect their frustration with the paymaster. Nick would pick out a toy that transformed into a weapon of mass destruction. Sam would
get something sad eyed and fuzzy, and Alice would fall in love with a bridesmaid's dress that cost twenty times what I owed her.
Eventually, the kids got tired of shopping at thrift stores. Alice went to work at the bedandbreakfast down the street, and the boys got a
paper route. Once my children had a taste of regular paychecks, allowances went by the wayside. Now it's interesting to see how their
experiences with the world of money have shaped them.
Alice is frugal, works hard, and budgets for expenses. I think this is a natural reaction to being raised by a spendthrift who prefers
reading "Best of Craigslist" to actually working and who balances her checking account by intuition. However, a bad example is still an
example, so this counts as good parenting.
My youngest son, Nick, is an opportunistic money manager. There are things he'd like to have, but, if at all possible, he'd rather
someone else pay for them. And though he's willing to wait for what he wants, his patience has its limits.
"Mom, when's my birthday?"
"In 364 days, Nick."
"Oh. When's Christmas?"
Sam doesn't care enough about money in my opinion, which explains why I frequently find dollar bills scattered in his dresser
drawers, balled up under his bed, or being used as bookmarks in his favorite novels. I have told him that this behavior will not earn
interest on his money, but he only rolls his eyes at me and says that I'm not being properly philosophical about money.
"You shouldn't think that there's not enough money, Mom. You should think of it as sufficient for your needs."
It's not that I don't get what he's saying, it's just that I don't understand how philosophy will persuade the universe to put money in his
college fund.
When I was young, I didn't get an allowance. If I needed money to go somewhere, like a dance or a ball game, I'd ask my dad for it.
"Dad, can I have three dollars?"
"If I had three dollars, I wouldn't speak to you."
"Please?"
He'd reach into his pocket, and I'd hold my breath, wondering what might come out of said pocket. Sometimes there were a couple of
singles, sometimes a twenty, sometimes nothing but a handful of loose change. With Dad's pockets, you never knew. My many
siblings might have cleaned him out already, he might have had to cover an overdraft on the checking account, or there could have
been a closing on a house the day before. Growing up, it was feast or famine at our house.
11 ONLINE EDUGUIDE www.EduGuide.org
Last week the subject of allowances came up again. I asked Sam whether any of his friends still got one. He looked embarrassed.
He'd reach into his pocket, and I'd hold my breath, wondering what might come out of said pocket. Sometimes there were a couple of
singles, sometimes a twenty, sometimes nothing but a handful of loose change. With Dad's pockets, you never knew. My many
siblings might have cleaned him out already, he might have had to cover an overdraft on the checking account, or there could have
been a closing on a house the day before. Growing up, it was feast or famine at our house.
Last week the subject of allowances came up again. I asked Sam whether any of his friends still got one. He looked embarrassed.
"Yeah, I think Kerrian does."
"So, how much is it? Like, five bucks or something?"
"Uh, no. Actually, it's more like fifteen or twenty."
"What? A week? Are you kidding me?"
He shook his head and smiled, and I thought it best to leave the subject alone for a while. My kids are very understanding as far as a
dollar a week goes, but I hate to think what they'd pick out at the Goodwill store if I owed them each twenty dollars come payday.
Marie Marfia is a sometime blogger, allthetime worrier, and workathome graphic designer who lives in Jacksonville—Florida's first coast. She writes about
her family because her family is what she cares about most. Her Web site is http://www.dancingmac.com.
Allowances 101
Parents United
Bridgette Redman
“What is important for kids to learn is that no matter how much money they have, earn, win, or inherit, they need to know how to spend
it, how to save it, and how to give it to others in need. This is what handling money is about, and this is why we give kids an
allowance.”
Barbara Coloroso
Before you start handing over the dough to your eager spender, be sure that you and your child’s other parent are in agreement on the
question “Are we ready to give our child an allowance?” Take some time to talk together about your attitudes toward money and what
you want to teach your child about money. Were you taught that money is the root of all evil or the only thing you can count on in life?
How do you each handle money? Who is a spender? A saver? If parents live apart, who will give the child an allowance? How will you
split this obligation?
If you disagree, work out your differences before you put your child—and the very loaded issue of money—between you (see “When
Parents Discipline with Different Styles”).
1. What is a good age to begin an allowance for kids? Children should know how to count and be able to recognize units of money
before they get an allowance. Begin an allowance either when the child starts school or when he or she begins to show an interest in
money.
2. How much should I start with? Give your kids enough money to be able to make small purchases every week but not so much that
they can purchase everything they want as soon as they want it. Look at what you can afford and factor allowances into your budget. It
is best to under promise and over deliver.
Though they don’t get a vote in the matter, be sure to talk with your children about the allowance amount and why you chose what you
did. Explain to them what you expect them to pay for versus what is money that they can choose how to spend.
3. Should children’s allowance be associated with household chores? This is a huge question that divides experts as well as
12 ONLINE EDUGUIDE www.EduGuide.org
parents. Experts who advise against basing an allowance on chores argue that chores are meant to teach family responsibility while
allowances are meant to teach money management. It is possible that some essential household tasks (such as feeding the dog)
Marie Marfia is a sometime blogger, allthetime worrier, and workathome graphic designer who lives in Jacksonville—Florida's first coast. She writes about
her family because her family is what she cares about most. Her Web site is http://www.dancingmac.com.
Allowances 101
Parents United
Bridgette Redman
“What is important for kids to learn is that no matter how much money they have, earn, win, or inherit, they need to know how to spend
it, how to save it, and how to give it to others in need. This is what handling money is about, and this is why we give kids an
allowance.”
Barbara Coloroso
Before you start handing over the dough to your eager spender, be sure that you and your child’s other parent are in agreement on the
question “Are we ready to give our child an allowance?” Take some time to talk together about your attitudes toward money and what
you want to teach your child about money. Were you taught that money is the root of all evil or the only thing you can count on in life?
How do you each handle money? Who is a spender? A saver? If parents live apart, who will give the child an allowance? How will you
split this obligation?
If you disagree, work out your differences before you put your child—and the very loaded issue of money—between you (see “When
Parents Discipline with Different Styles”).
1. What is a good age to begin an allowance for kids? Children should know how to count and be able to recognize units of money
before they get an allowance. Begin an allowance either when the child starts school or when he or she begins to show an interest in
money.
2. How much should I start with? Give your kids enough money to be able to make small purchases every week but not so much that
they can purchase everything they want as soon as they want it. Look at what you can afford and factor allowances into your budget. It
is best to under promise and over deliver.
Though they don’t get a vote in the matter, be sure to talk with your children about the allowance amount and why you chose what you
did. Explain to them what you expect them to pay for versus what is money that they can choose how to spend.
3. Should children’s allowance be associated with household chores? This is a huge question that divides experts as well as
parents. Experts who advise against basing an allowance on chores argue that chores are meant to teach family responsibility while
allowances are meant to teach money management. It is possible that some essential household tasks (such as feeding the dog)
could get skipped if a child decides to do without an allowance that week.
Other experts argue that giving children money for nothing creates a sense of entitlement and that money should be earned, not
simply given. They suggest giving an allowance based on how much responsibility the child has around the house.
Whichever plan you choose, explain your reasons and expectations carefully. One compromise between these two conflicting
opinions is to provide a base allowance amount that does not change coupled with basic chores, which are not negotiable. For any
additional chores, a child can earn “extra” allowance. For example, a child may be expected to make the bed, set the table, fold
clothes, and take out the garbage. For extra money, parents might agree to pay two dollars for scrubbing out the bathtub or five dollars
for washing the windows.
4. Should I require my kids to save some of their allowance? Many family experts say it is better not to force children to save money
from their allowance. Saving should be encouraged, but the point of an allowance is for kids, not adults, to manage the money.
If an allowance amount is set based on a child having something to save and no saving is happening, consider after a set period
informing the child that since the money is not going to the intended cause, that the allowance amount will be lowered. However, tread
carefully and don’t institute this consequence for one or two missed weeks, but only if the behavior is consistent.
13 ONLINE EDUGUIDE www.EduGuide.org
5. How can I set up my child for success? Review your child’s allowance on a regular basis—at least once a year. Determine
from their allowance. Saving should be encouraged, but the point of an allowance is for kids, not adults, to manage the money.
If an allowance amount is set based on a child having something to save and no saving is happening, consider after a set period
informing the child that since the money is not going to the intended cause, that the allowance amount will be lowered. However, tread
carefully and don’t institute this consequence for one or two missed weeks, but only if the behavior is consistent.
5. How can I set up my child for success? Review your child’s allowance on a regular basis—at least once a year. Determine
whether the child’s needs and costs have changed.
Don’t rescue your children when they make money mistakes. Rather help them figure out a solution. Explain that having and spending
money is a privilege and that responsibility is part of the package.
For teenagers, consider giving a monthly allowance so that they can learn to budget money over longer periods of time. You may wish
to set up a separate allowance for some items such as clothing or gifts. Make it clear that your teen will then have to keep track of the
money to pay for each item assigned.
Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.
Is My Kid's Allowance Working?
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/43/view/StepTakeQuiz/Default.aspx
Am I Paying the Right Amount for My Kid's Allowance?
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/44/view/StepTakeQuiz/Default.aspx
Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.
Is My Kid's Allowance Working?
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/43/view/StepTakeQuiz/Default.aspx
Am I Paying the Right Amount for My Kid's Allowance?
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/44/view/StepTakeQuiz/Default.aspx