Allowance for kids can be tough to figure out. Especially when you feel like the new “it” Allowance System is not going to work for yours. Keep reading for some ideas from real-life systems used by personal financial bloggers.
Allowance systems can be tough to figure out – everything from coming up with a realistic allowance schedule, actually staying consistent, figuring out whether or not to tie it to chores (and which chores are appropriate for your kid’s age, anyway?), commissions, and what the heck you want your child to be responsible paying for with those new dollars burning a hole in their pockets.
Top that messy container off with the fact that everywhere you turn, someone is touting their allowance system as THE one. Even if you have a sneaking suspicion that it just isn’t going to work for your own kiddo.
Hint: there are probably as many allowance systems to choose from as there are Game of Thrones outcomes because kids are individuals and what works for one may not work for another.
I’m NOT here today to tell you that I’ve got the answer that’s going to work for you. Instead, I’m here to show you examples of what other personal finance bloggers are doing with their own kids to give you inspiration + ideas for how to get experimenting with your own child.
Might as well go to the experts who are dealing with it themselves, right?
Allowance System #1: Varying Pay Scale for Work Completed, Melissa Thomas
Age: 11 and 12 years old
Philosophy Behind the System: Melissa is trying to teach her kids work ethic along with getting paid.
Melissa says, “My boys don’t get an allowance for kids, but they do get paid for jobs they do – WITHOUT complaining about it.
For example, my oldest who is 12, is helping me this summer with my dog-sitting business. He comes with me and helps feed the dogs, change out their water, play with them, etc. I’m paying him $2 for every time he comes with me AND he doesn’t complain. HOWEVER, he has to keep a record of when he came with me and what he did. His payday is every Friday. He is doing a great job BECAUSE if he doesn’t write it down, he doesn’t get paid;) #motivation.”
“My youngest is 11 and he gets paid to help with extra jobs around the house like, bathing the dogs, helping with yard work, etc. Yes, the 11-year-old uses a checklist though. We write the jobs down for him to do and he checks them off once completed.”
Melissa adds, “they are expected to help with household jobs (cleaning, laundry, feeding the dogs) without pay.”
And how does her varying pay scale work? She says, “I should note that in each case, we don’t tell them upfront how much they will earn for each job. For example, after the job is done we might say, “You could have earned $5 for this job BUT since you complained or had to be redirected or asked more than once to do it, etc., you are only getting $3. On the flip side, they may get paid $6 if they went above and beyond what was expected. We don’t want money to be the reason they do a job well or not well. They are expected to do it well regardless of how much they get paid. Also, their pay is dependent on our budget so it varies.”
Allowance System #2: Allowance Tied with Spending Responsibility for All Entertainment, Kate Horrell
Age: Older Teens
Philosophy Behind this System: Kate doesn’t want to give her kids the impression that you help your family and the world solely for financial gain.
Kate explains, “We have four older teens. They have gotten a fairly generous allowance since they have had expenses. It is not tied to their family obligations, but I look at is as a chance to learn. They are responsible for all their own wants, which include entertainment, half of any field trip over $20, makeup, clothes beyond the basics, etc. While I think their allowances are huge, they are not nearly enough to get by without some scrimping or additional income.”
This helps with some of her bigger money lessons she wants to impart on her kids. She says, “It works for us. They know they have to pick and choose, and if they only work in the summer they have to budget to make that money last across the year, even if that field trip to Disney is in April.”
As far as tracking or tying it all with chores? Kate doesn’t have time for it, nor does she think it will teach the sort of lessons she wants them to learn. “I just couldn’t be bothered with tracking chores for money, and I also don’t want to give them the impression that you help our family and the world around you solely for financial gain. They are expected to help our family daily and our community on some sort of regular basis. For example, this week two are volunteering at a local drama camp.”
Allowance System #3: Allowance Tied to Mixture of Chores + Family Responsibilities, Linsey Knerl
Age: 3, 6, 9, 11, 13, and 18 years old
Philosophy Behind the System: You help? You get allowance. You don’t? You don’t.
Linsey says, “We do $.50 per year of age per kid. They get paid weekly in cash. They have a list of chores they must complete to get it (and we live on a farm, so chores are like cleaning out coops and whatnot.) They are also expected to help in other ways for no money, just because (3 of my kids cook 3-4 meals a week, they weed the garden, babysit, etc.).”
Linsey also, “contribute[s] between $15 – 25 a month (depending on age) into a college account once they reach age 6 and are old enough to do chores. We are also not above tossing a wad of cash at them for really hard stuff (such as helping rip up floors in our rental, etc.) I have no time for a complicated system, so it’s an all or nothing deal. You help? You get allowance. You don’t? You don’t. And when a kid is gone at camp for the week and a sibling kicks in and does all the chores for that kid, the allowance transfers. My kids also support a Compassion International Child with their allowance each month, so if they slack off and don’t get much allowance, they might not have enough to support their child. So, they take it seriously.”
Allowance System #4: Learning Money Concepts to Learning to Earn, Andrew Daniels
Philosophy Behind the System: First we used allowance to introduce money + money concepts to them. Now we’ve switched to having them earn the money so that they come up with their own ideas for how to do so.
Andrew says, “when our kids were young we started them out doing basic chores (making bed, cleaning their room, putting their dishes away) as their allowance. Now that they are a little older, we are switching to an earning method where they have to do things to earn getting their allowance. The bed making, and general household stuff is expected as members of the home. We did it this way at first because our youngest was only 5 when we started and wanted to be consistent between them. This was also how we introduced money to their lives. In the beginning, we were more wanting them to get the concept of saving half their allowance for bigger things. Now that they have the money concepts down we are switching to earning it, which I’m hoping leads to them finding their own ideas and ways to earn money.”
Allowance System #5: Allowance as A Vehicle for Purchase Conversations, Elle Martinez
Philosophy Behind the System: We’d rather her make a money mistake now while she’s small and we’re only dealing with toys rather than later when it can get messy. And expensive.
Elle explains, “We began when our little girl was 4. She was asking about toys so we figured it was time to start. We do $0.50 per year of age and she gets paid on Fridays.
As far as whether or not the allowance is tied to chores, Elle says, “she has core chores (like cleaning her room and dining table set up) that are not tied to her allowance. We do have bonus chores if she wants to earn extra money which she occasionally takes up. Right now, she’s saving up for a Power Wheel.”
Elle is using this allowance to teach her child about money. Her daughter’s money, “…is divvied up into save, spend, and give. To keep everyone on track and on the same page with everything we use FamZoo.”
It’s also a vehicle for purchase decisions. “And whenever she wants to withdraw and use her cash, we chat about what she wants to buy and why. We want to create awareness with purchases. We’d rather her make a money mistake now while she’s small and we’re only dealing with toys rather than later when it can get messy and expensive. For her Power Wheel, we’ve started having the conversation of waiting much longer for buying a new one or paying a lot less for a used one.”
If you read through all of these personal examples, then you probably noticed something. Each allowance for kids is different, yet whichever system each blogger is using works for their child. So, gain some inspiration from the examples above, customize for your personal child, give it a shot, and assess after a few months. If something isn’t working, tweak or move onto a new system altogether.
By experimenting, you’ll eventually find the one for your kiddo.