Do You Pay Your Kids an Allowance?

Several parents have written to me over the last couple weeks asking for my recommendation on how much to pay their kids in weekly allowance. My response probably surprises them initially, until I have a chance to explain. Zero. I do not pay my kids an allowance. My kids are on a commission schedule. They have a list of chores required of them daily for which they earn a small amount, and they have the option of completing a few extra chores for additional commissions. At the end of the week we add up the totals for each chore completed and they collect a commission payment.

kids raking leaves
photo by terren in virginia

Allowance vs. Commissions

I don’t like the word “allowance.” It looks too much like receiving money whether you work for it or not. I personally do not believe this helps to prepare kids for the real world where they are expected to get out there and earn a living. So around the frugal family household you actually have to work to get paid (novel approach, isn’t it?). The various daily chores are age-appropriate and do not require a great deal of time to complete. We also include some larger chores for the kids to pick from in order to earn a little extra money. These larger chores are optional, but provide our kids the opportunity to stretch to earn more money.

Sample Commission Schedule

Here is a snapshot of the commission schedule for my daughter. Notice the daily chores which pay $0.05 each are things you would expect an 8-10 year-old to do anyway. The $0.05 is really just my way of encouraging her to get in the routine of completing these tasks every day. By rewarding her with a nickel for making her bed I get better results than fussing about a messy bed later in the day.

commission schedule

The “Extra-Credit Chores” range from $0.10 to $0.50 depending on their degree of difficulty. My daughter loves to work this section (so much so that I’ve had to renegotiate the costs to keep from going broke) when she has a savings goal in mind. If a new CD or DVD is due out that she really wants we suddenly find her wanting to vacuum, dust the furniture, etc. every single day! We try to encourage her not to take it too far, but it is hard not to be impressed by her entrepreneurial spirit.

The “Bonus” section is reserved for any extra chores the kids may be asked to help with during the week. I have plans over the next couple weekends to add some wood stain to our privacy fence. Instead of buying or renting a paint sprayer, I plan to hand the kids a paint brush and let them help. Tom Sawyer would be proud! I will pay them something like $0.25 a panel so they can easily tick off their earnings in their head.

Random Acts of Kindness

The “Act of Kindness” section is something Mom and Dad fill in when they witness the kids doing something nice for others. It could be as simple as holding a door open for a mom with a stroller, or as elaborate as volunteering some of their Saturday to help make crafts for a charity. The point is, we want our kids to be givers and we encourage them to find creative ways to be help others. They don’t receive a reward every time they perform a random act of kindness, because if they got paid for it each time it would change the spirit in which they perform the good deed.

My daughter loves to complete her commission schedule on a daily basis, and looks forward to weekend payments. To really make this tool effective you have to resist the urge to give kids “extra” money throughout the week, or buy them too many extras without requiring them to work and save.

Do you pay your kids an allowance, or commissions?

Comments

  1. I LOVE the commission plan–I want to do something like this when I have kids! I think it instills the idea that you have to WORK to earn money, and that because you’ve worked for it, you want to be more careful spending it. Great post!

  2. I know I should begin a plan, but currently my 4yo is simply expected to do certain things as simply a part of being a family or life in general. I like your idea and will propose it to my husband to be introduced when our oldest son turns 5.
    Reading your list reminds me in the future the weight of household management will be better distributed. (Yes, I’m gleefully imagining the day I can pass the reins of the lawnmower to my kid)

  3. We do something very similar. Our kids are 9 & 12. We have a list of ten chores to be done daily. The list includes things like put away the dishes, scoop out the cat box, clean the bathroom, etc. Each job is worth a quarter.

    Like your system, we add up the totals at the end of the week. Each kid lists their savings goal on the jobs sheet. We also keep track of the amount of unfinished jobs so the kids know how much money they left on the table. This has been a great motivator.

    What I like about this system is that it puts the kids in control and rewards them for positive steps.

  4. I think it’s great that this system works for you and your family. I, however, fear that it wouldn’t work for my son. His motivation seems to be lacking sometimes and, though he’s only three, I fear that if I completely tie his income to chores, he’ll skip out on the chores too often because he’s not motivated by the money, and that’s not cool because I want him to do chores because I ask him to and because he needs to help out around the house. I don’t want him thinking that since it is tied to money he can skip his chores and just skip getting some extra money. If that’s the case, I’ll probably have to give an allowance that isn’t tied to work around the house, since I’d want him to have some money so he can learn to manage it. Obviously I don’t know for sure what he’ll be like in a few years, but seeing him in other situations makes me think this. I’m not opposed to this sort of system, only if it ends keeps my kid from actually doing what he should!

  5. I think this is a great idea! I don’t have children myself but I remember my parents doing something quite different. They expected my two brothers and I to do chores simply because we were part of the family. There was rarely any specific financial incentive except for certain unusual things (not part of a normal weekly routine). We got a monthly allowance once we turned about 10 or so of $10 which eventually was upped to $20/month as we got older. A lack of helpfulness or shirking of chores during the previous month could result in a reduction or elimination of the allowance altogether; but, my parents weren’t the best record keepers of these things so there wasn’t a real connection at home of work to money. However, the benefit to this, as I see it, was that since our allowance was significantly smaller than most of our peers (this was the 1990′s and most of my friends got 10-20 a week) and so we all looked for things we could do for others for pay such as babysit, mow grass, take care of people’s pets when they were on vacation to supplement our allowance, plus, I became quite a hoarder/saver of money to buy more expensive things that I wanted. My mom told me recently that in her mind, she wanted us to know that housework is not something you’ll be paid to do when you are grown so you might as well make it part of your routine. My dad always said that our ‘allowance’ was given to us just for being members of the family and too young to have a job. That being said, I think that chores for money for young kids especially probably does cement the idea of work = money and that is invaluable!

  6. @Alison: Thanks for your comments. You are correct in that most kids your son’s age are not motivated by money. My daughter is eight, and she has had time to grasp the concept of money in exchange for things she wants (this was right around the time Hannah Montana became popular – CDs, DVDs, etc.!). For younger kids I’d recommend substituting money for some other reward – stickers, little army men, or matchbox cars, etc. My son (not much older than yours) places much more value on these sorts of things than he does coins.

  7. My kids don’t get an allowance or anything yet (4, 3 and 2 months) but they do get given coins and they nearly always end up in MY money box, or a donation box at the supermarket.

    As for chores and allowances, my theory is this: I get paid a certain amount of “pocket money” each week regardless of what jobs I do, so so will they. Being a member of a family you have certain jobs to do. Mine are feeding everyone 3 times a day, washing, ironing, cleaning etc. Theirs are making their beds, tidying their toys, helping with the baby etc. Extra jobs earn extra payment (just like when Daddy and I work longer we get paid extra). At this stage I’m just putting $5 a week each in a bank account for them, and splitting the change from my money box 3 ways into their accounts.

    The allowances will be starting soon, 50c per year of age, so $2 and $1.50 for the older kids. As long as we can afford it I’ll keep putting money in their bank accounts too.

  8. I forgot to mention that all chores must be completed by 8pm for credit. The job still has to be done, they just don’t get paid for it.

  9. We give our children weekly pocket money and I wrote in detail the reasons why we don’t attach them to their household jobs that they have to do here. The main reason is that as a member of the household I expect them to contribute without being paid for it, just like mum and dad do. Also if I wanted to eliminate them expecting cash whenever I asked them to do a household task. We have found that this works well for us, but every family is different and needs to look at what will work for them.

  10. You know something funny? this wants me to start having kids asap! haha…I really enjoy reading anything kid-related on these blogs, and can only hope i’ll have a good head on my shoulder when it comes down to these things.

    (note to self – bookmark these posts)

  11. My son is too young to really understand money, but when the time comes he will get an allowance for the expenses he incurs and be expected to do tasks around the house because he’s part of the family (actually he already does some tasks, like pick up his toys). When my husband was home with our son I didn’t make rules like, “You must cook dinner every night of the week or I won’t give you money to spend on a hair cut.” Lots of families have members who aren’t working for pay but still have the opportunity to spend money on their needs because they’re part of the team. I think treating my children differently would be a double standard.

  12. Great article. I love the idea of a commission schedule. If the kids want a cd or movie they learn they have to work for it AND save for it. This goes along great with your article yesterday about instant gratification and saving for the WII. Thanks FD!

  13. I’ve just started paying my two sons (6 and 8) $2 a week.
    In the past, I’ve made earn-as-you-go, and all I received in return was “That’s all I get” whining.
    This way, they are getting a small amount, they can learn to start saving, and can stop asking me “Can you get me that, can you get me that, can you get me that.”
    Perhaps when my 6 year old is a bit more mature, I’ll add a menu of a-la-carte chores.

    As an aside, I help in my 8 year old’s class once a week or so, and the topic of allowance came up once. Some of the other kids get $10 a week.

    For the life of me, I have no idea what an 8 year old would spend with that kind of cash.

  14. It is a great approach! I just might be afraid that the kids kept the idea that EVERYTHING has to be rewarded with money… How do you balance things up?
    Sorry, without noticing, I comment this on the wii post.

  15. I plan to give my kids an allowance, but for the sole purpose of teaching them money skills, compound interest, etc. I don’t like the idea of paying them for chores, since as members of a household, they should just do chores to begin with and not get paid for it (stay-at-home moms don’t get paid for chores either). Perhaps if the chores are larger or more difficult, or if they do chores for other people then that would warrant an extra payment, but for regular chores, they should just contribute because they’re family members.

  16. I think that there are benefits to giving your children tasks so that they can earn money and become responsible, but I don’t know if I am sold on the idea of paying them to do things that they should be doing just because they are part of the family. Keeping the house clean, helping with dinner preparation, and taking care of the family dog seem like family tasks that benefit everyone as a unit. I currently don’t have any kids (but will soon, w00t!), so I may not realize some of the ins and outs of parent-child relationships, but it just seems like kids can be taught to work for the good of the family irrespective of monetary reward (just like a parent does). In my mind, paying a child to do something that they ought might hinder teaching them that principle – thus my uncertainty about adopting this method.

  17. It is a delicate balance to remind them that there are some things that you do just because you are part of the family, not because you expect to get paid. As one commenter mentioned, SAHMs work more than anyone in the household and they are not “paid” for their work. I help with household chores as well and I am not “paid” for it. The idea here is that since kids under 16 can’t go out and work (legally), save babysitting-type jobs, we use household chores to instill a work=money mentality. It’s not a perfect system by any means.

  18. This would not work in our home, my son is 13 yo and already talking about getting a job (yard work, babysitting ect) when that happens the incentive to do chores would diminish as he would be “making his own money”. I feel chores are part of being a family. We ALL need to take care of our home.

  19. Could you post your spreadsheet…I would love to print it and use it with my kids!

    Great Site!

    Thanks,

    Cris

  20. My parents did this when I was a kid. Certain essential daily tasks were expected of me and my brothers without payment, but for others we were paid. When we were very young, we were paid with Monopoly money which we could redeem for special outings like a family trip to get ice cream. Later, we were paid real money because that had become more of a motivator. And yes, it was fun to rack up our commissions – I got to use an old typewriter!

  21. When my girls became teenagers, on their 13th birthday, we negotiated a teenage contract, and we pay them quite a large (in my opinion) allowance of £50 per month, but the contract states the basic requirements for this, covering personal responsibilites in respect of their own room and bed?coming home times as well as family responsibilities in respect of cleaning, etc. they also have to make one meal a week, and they can earn extra for additional tasks – washing car?additional mowing. They also have to pay 10% to charity and save 10%, and this is agreed each year, when we agree any increase. The big plus for me is that they know what they are responsible for, and thus they are in control of their clothes purchases and entertainment, and they have to make budgeting decisions depending on the state of their account – not my responsibility. It took a lot of thought and subsequent tweaking to make the contract terms acceptable both to us as parents and to the girls, but we are pleased with the result!

  22. Sorry… but we don’t give allowance or anything else based on chores. Chores have to be done regardless of there being money available or not. Chores are part of life.. either as part of a family or living independently.

    I do give allowance, it’s based on the fact that children need to learn how to manage money. The only thing they have to do to get their allowance is be my kid. For a long time there was no money for allowances… and they appreciated it when there was. By the time they got to middle school I could basically hand over the money we spend on their clothing, entertainment, lessons, etc.. and know they would budget it to meet their needs. So I had kids who did everything around the house they needed to do, and who managed their finances much better than I did until very recently.

    I am absolutely not paying my kid to be kind, and I am not taking money away from them because they have a bad day. If they do something that actually costs money.. then yes they can handle the cost of their action. Otherwise this is way over managing the allowance system

  23. Where in the real world do you get paid for making your bed? No, not motel housekeeping, that’s someone else’s bed. The truth is your kids are too young to have paying jobs, thank goddess for child labor laws! But they are members of a household. A family takes care of everyone in the family, it is NOT society, the outside world or the frekin’ protestant work ethic. Your kids will catch onto that very quickly. As kids they deserve a stipend. Extra earning options are cool, but there are things we should do because we are part of a family and they should not be tied to money but to care and love.

  24. Great blog FrugalDad! I think you are right on understanding the difference between allowance and commissions. Work get paid, don’t work don’t get paid.

    I especially liked how you added commission for acts of kindness! I will be using that for sure!

    I added you to my blogroll! Your blog is great!

  25. Same here. We changed the sytem last year. In order for them to earn they have to perform tasks. Weeks they don’t do the tasks they don’t earn at all. When they do the work, they have the option to take a payout on my payday, or “bank” their money and earn 5% a month on the amount. The tasks are more household right now but I loved the idea of acts of kindness!

  26. Interesting idea and I might try it.

    I worry though that, as others have said, the child might only do chores for the money, not necessarily because they want to help the family.

    I wonder if doing a negative version of this concept would work, where the kids automatically get their allowance at the end of the week, however, for every chore not done a certain amount is deducted.

  27. I love the commission schedule!!!
    We do something similar but with a point system. We found it hard to do the allowance thing. My husband loves spoiling the kids so they early on realised that if they did not have any money Dad would still get them things. So I started a point system in our house. I have never gotten as far as making a spreadsheet on it though. I do have a spreadsheet for the daily chores.

    In our house there are two seperate things. Chores must be done. They are the clean up after yourself, put away your own laundry, and clean your room type things. Chores are not rewarded, they are expected. Then their are the things you can get points doing. These change according to what needs to be done around the house. Example: clean the bathroom= 30 points, sweep kitchen floor: 15 points. Then they can cash in their points and “buy” things. This ranges from time playing video games or snacks and treats. I set the points so that they equal the amount of minutes that will be awarded. Now they will come up to me and instead of asking if they can play video games they ask, “what do I have to do to be able to play video games for 30 minutes?”.

    I may have to change our points system a little to be more like yours. I miss having a spreadsheet.

  28. Our system is similar to yours, although in reverse. Our teenagers are eligible for up to $10 per week, and our younger two (7 and 8) are eligible for up to $5 per week. They all know what they are required to do on a regular basis: pick up after themselves, make beds, keep rooms clean, handle homework responsibly, help with laundry, dishes, cleaning, etc. I don’t have a specific list of what I will pay per chore, but I make a mental note of work done sloppily or left unfinished throughout the week, as well as anything they’ve done unusually well (being proactive and going above and beyond what’s been asked of them). Sloppy work and bad attitudes result in their pay being docked, and exceptional work results in a bonus.

    In order to spur them to save more (something only one of my kids excels at), I also tack on an additional 20% to whatever they are willing to deposit into their ING accounts, provided the money stays there for a minimum of one year.

  29. @frugaldad: The idea here is that since kids under 16 can’t go out and work (legally), save babysitting-type jobs, we use household chores to instill a work=money mentality.

    Sounds like you need to separate household chores and extra work. Take the chores to 0, but expect them to be done, pay them a small allowance, and then offer them opportunities to earn on the side. Win-win-win.

    Wendy’s allowance and contract system sound a lot like what’s recommended in the 7 Habits of Highly Effective Families.

    People should always be careful what they are incentivizing… sometimes the best intentions create the exact opposite response than what was expected…

  30. I think having base commission chores is a fine idea, but the challenge in our family is keeping up enthusiasm for daily tracking. With both parents working out of the house, weekday mornings are a rush and our evening family time is from ~6 – 8pm…2 hours isn’t a lot of time for dinner, homework, chores, relaxation and prep for next morning. Do your kids do all the tracking? Do you pay them once a week in cash? Or do you keep some kind of account and have them withdraw on demand?

  31. We are starting a bank of Mom & Dad! With a bank register made from a spreadsheet because my kids are bad about leaving their money laying around and the other picks it up or they leave it at home when we go out, etc.

    We are just starting out system and one of my rules is “If I do YOUR chore then you are going to pay me!” I deduct $.25 for each chore I have to do for them.

    My kids are 9 and 8 (will be 8 in 3 weeks) and are starting to realize the concept of money more and more. They have had bank accounts at school through their student council bank since kindergarten but I have never given them money to bank with. I’ve always made them earn it.

  32. We follow Dave Ramsey’s Financial Peace Jr. envelope system. Save, spend and give. It’s based on commission. We started with my son at age 4… he is now 5 and it’s working great! Sometimes he doesn’t do his chores, but then he doesn’t get the money! It has taught him about work ethic, giving and that you have to work if you want to buy things. He realizes that money doesn’t just come out of an ATM machine now.

  33. I like your chart. I may end up doing that. However, I do some different things: http://dullgeek.blogspot.com/2008/09/my-two-cents.html

    My only disagreement with you is in the assumption that money received must always be earned. I give my children an allowance, one that they didn’t earn. I do this on purpose, and I don’t care that they didn’t earn it.

    My purpose for allowance is to give them some money to practice using, whether they earn it or not. I exercise this practice in other things I want them to learn about and it doesn’t bother me in the least. I don’t expect them to earn the cost of pencils, pens and paper in order to practice writing. I don’t expect them to earn the cost of rags, paper towels and soap in order to learn how to clean a bathroom. I happily provide those things to them for free because I want them to learn how to use them. Similarly, I provide my children with money (at no cost to them) so that they’ll have a chance to use it.

    I have 4 sons. The oldest of which is 10. Currently I control almost every spending decision in their lives. But as they get older, I plan on letting them control more of the spending decisions that they have to make. The money that I spend on clothes for them (that I don’t expect them to earn) will gradually go from my decision on how to use it, to theirs. The money that I spend on transportation for them (that I also don’t expect them to earn) will gradually go from my decision to theirs. They will get increasing control of the budget that I have allocated for them. But with that control, comes consequences. If they spend their entire clothing budget on video games, they had better be prepared to live off the clothes from last year – clothes that might not fit well. (Frankly, I hope they make some dumb mistake like that. I’d rather that they learn the consequences early when the costs are low, than learn those consequences at 30 with a credit card.)

    As they get old enough to get a job and earn their own money, the amount of the budget that I allocate to them will start to diminish. My goal is to get them to manage almost *all* spending decisions about their life by the time they graduate high school. (Housing will be a notable exception to that rule. Those who go to college will still get housing costs paid for by me. Those who don’t, won’t.)

    My point is this: I have no problems with them getting money without earning it. I give them lots of things that they didn’t earn. I want them to get the practice of using money and running out, without the requirement that they earn it. If I require that they earn it, they may never get a chance to practice with it.

  34. Hi, I’d totally disagree with a Chore => $ schedule as described. There are Chores we all complete, and we do NOT get paid for them. For example, making my bed, cleaning my dishes, put away my clothes, setting my table. These acts should be considered acts of responsibility.

    What, if your kid doesn’t clean the dishes, then someone else gets the 25c? Hey, I’ll be right here to tell you, have your kid come clean my dishes and I’ll give him 25c.

    I think your heart is in the right place, but I think that this type of execution is very bad.

    If your kid opens someone’s door he gets a quarter?

    In my opinion, it is much better execution to have the kid do his or her chores. Period. End of discussion. The allowance should really be used to encourage financial responsibility, and to reduce the opportunity of your own debt. Allowances place the burden of decision on the child — and the opportunity for growth, and learning cause/effect.

    • Hi Mark, It has been several years since you wrote this comment but I was wondering how this was working out for you? I agree with you to a certain point but in what part of society do we hand out money to people without them earning it? I am not saying there are not times when we should have a generous spirit and help those in need, but I am concerned about the mindset of a lifestyle. Paying them commission does put the burden of choice in their lap, as does how they spend it. Anyway, I see the pros of both sides and wondered how the years have molded your approach. Thanks.

  35. Frugal dad, what do you do with children that are 13 and 17? They are wasting away my patients. Father gets home at 6 i get home at 5 and having the children do chores is like pulling teeth. Very diffiult.

  36. I found this very amusing… Our little guy isn’t even two yet so I’m not sure what approach we are going to take. I’d like to think that my kids will do chores whether I pay them or not. :-) I guess time will tell.
    I like the reward/consequence approach. Kids should be expected to do some chores because they are part of the family but other ones are worth a reward.

  37. I love this idea. Our kids already do their chores, now we would like to teach them about life and the value of money. My husband and I were contemplating giving them allowance but the commission idea sounds even better…plus I really like the last section where they can see the penalty of not behaving properly…i.e. fighting with one another…thanks I am going to try this one!!!!

  38. Thank you for this chart and your input. This area can be a real struggle for some. There is a part of me that struggles with paying my child to do a chore they have to do anyway. I want them to understand we work together as a family unit because that is what we do. But then why would I want to give my child money when they have not earned it? Which mindset do I want to encourage as they grow to be a member of society. If I want them to learn about handling money, they need to learn how to earn it. Excel, here I come ….

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