Chores, Yes. Allowance, Maybe: Teaching Kids About Work and Money

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Chores without the payoutIn the old Cybil Shepherd/Bruce Willis comedy Moonlighting, the office workers at the Blue Moon Detective Agency once chanted "No work and pay!" hoping for just that -- to be paid for doing nothing.

Many of America's children might have the same hope, but alas, according to a recent survey, their parents have other ideas.

The survey, called Chores & Allowance and the 21st Century Kid, was conducted by DoughMain.com, a company dedicated to family financial education. It found that the vast majority of parents -- 89% of them -- assign chores to their children. Only about half, though, give their kids an allowance. And among the allowance payers, just 21% tied the payouts to chores.

Those who aren't paying allowances might want to consider doing so, though.

Tying Pay to Chores

One of the top reasons for paying allowances is to help children learn to manage money -- 47% of allowance payers cited this reason.

Ken Damato, president and CEO of DoughMain, sees an ongoing debate about allowances and chores in America and about "whether giving an allowance helps make kids smarter about money -- and whether parents should require kids to do chores to receive one."

While some parents focus on either chores or allowances, Damato suggests tying them together. By being assigned chores, children learn responsibility. If their reward is financial, that can serve as compelling motivation for them and can also help them learn the value of money and how to manage it.

Unpaid, but Not Unrewarded

It's worth noting that while many children who do chores and don't get allowances may seem to be unrewarded for their work, there are other forms of rewards that parents employ.

Non-monetary rewards include television or computer time. A growing number of parents are using such rewards (26% of surveyed parents use them instead of money) -- perhaps to some degree out of necessity, as many parents are financially pinched these days.

And some parents object to connecting allowances to chores, wanting their kids to do chores simply because they are expected to, out of a sense of responsibility and not merely in order to receive money.

Allowance Tips

If you pay your children an allowance or are thinking of doing so, here are some things to keep in mind:

  • Starting early is OK. Some experts suggest that even 6-year-olds can handle a small allowance. To determine what a sensible sum is, think of how much your child might reasonably spend in a week on expenses that you think they should pay for, and pay them all or some of that.
  • Encourage well-rounded money management behavior. It's good to learn how to save for different time frames and goals. For example, designate one portion of your child's allowance/earnings to long-term savings goals, such as a big purchase like a car or even college. Another portion might be earmarked for charity, perhaps supporting one or more causes important to the child. And one portion should definitely be used for fun, to be spent on entertainment or clothing.
  • Combine the chores and allowances with regular discussions about money. Don't just discuss how they're managing their money -- discuss how you are managing the household's money, as well. Children can benefit by knowing how much it costs to hire a plumber or buy the week's groceries.


Here are a few more tips, from the folks at DoughMain:

  • Before assigning an allowance, make sure your kids know the basics of coin recognition and confirm they have a basic understanding of keeping track of dollars and cents.
  • Let some chores be not rewarded with money, to help teach responsibility, while others can be paid tasks tied to an allowance.
  • Consider giving an allowance or rewards for household chores like dusting and vacuuming, but also for important responsibilities, such as homework, hygiene, exercise, punctuality, and positive behavior.

Chores and allowances are great ways to help your children grow up to be responsible people and smart money managers.


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23 Comments

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Stephanie Lynn

"there are more people on the dole than ever"... because this is the worst recession since the New Deal

April 05 2012 at 2:20 PM Report abuse rate up rate down Reply
vlady1000

Also get your kids thinking ouside the box to make money. My kids never got an allowance. I would pay them for helping on specific jobs when they were young. I then showed and help them get into their own business, which they did and did pretty well at thru middle and high school. But at age 16, they quit helping me as they could make 2-3 times more money on their own than working for me. ......"no good deed goes unpunished"

April 05 2012 at 1:19 AM Report abuse rate up rate down Reply
Diana

I see no problem with giving an allowance to teens who work for it. If the chores are not done, it means no allowance, no questions asked. Teaches responsibility and money skills. Instead of asking parents for money for various functions, they can save for them, buy clothes, and its nice to get a Birthday Card from them. She intends on getting a job ASAP, when of age in our mall. Great grades and a great teen.

April 04 2012 at 4:45 PM Report abuse rate up rate down Reply
lornawestie

Manners? Most definitely!

April 04 2012 at 3:55 PM Report abuse rate up rate down Reply
smaselli12

Why teach kids responsibility??? They go to school and learn that the govt will take care of them from cradle to grave, and also that it is someone else's fault when something bad happens to them.

April 04 2012 at 2:51 PM Report abuse rate up rate down Reply
GrowingRichKids

Another great tip for parents thinking about giving their children an allowance is to use an online allowance tracker (or virtual family bank). One of the biggest problems with allowances is that it's one more thing for parents to remember to do and you'd be surprised how easy it is to forget it. (Sadly, I speak from experience.) There are a lot of options out there. To see reviews of the most popular ones by a fellow parent, check out http://www.growingrichkids.com/online-allowance-trackers

April 04 2012 at 1:12 PM Report abuse rate up rate down Reply
Mingo

This is how most people use to brought up Earn your allowance and by all means do your share of chores around the house. Now at no time should the child be taken advantaged of but they all need to feel that they are a part of the family and home Children love that security

April 04 2012 at 12:57 PM Report abuse rate up rate down Reply
Governmentsuxs

Honey you don't have to worry about work and money Uncle Obama is going to have the rich people take care of us.

April 04 2012 at 12:56 PM Report abuse +1 rate up rate down Reply
1 reply to Governmentsuxs's comment
peteycat915

The rich have never taken care of most of us before, so I doubt that they will start now. A lot will depend on what Congress decides to do (remember your basic civics class? It's the legislative branch that decides how the money will be collected, and also how it will be spent). But I see by your "name" that you probably hate all three branches of government with equal fervor.

April 04 2012 at 5:52 PM Report abuse -1 rate up rate down Reply
boxigg

WORK FOR YOUR MONEY------THIS HOPE AND CHANGE IS ABOUT LET THE GOVERMENT GIVE YOU THINGS FOR FREE--ENTITLEMENTS---THAT WHAT THIS LAST 3 1/2 YEARS WAS ALL ABOUT

April 04 2012 at 11:00 AM Report abuse +3 rate up rate down Reply
HarMoney

They should teach a personal finance curriculum in school, it is part of our everyday life. If we don't learn it as children, we won't be as successful as we can be as adults. We just blogged about this today. http://www.harmoneyllc.com/Chat-with-HarMoney.html?entry=teaching-personal-finance-in-schools

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April 04 2012 at 10:55 AM Report abuse +3 rate up rate down Reply
1 reply to HarMoney's comment
vlady1000

I been saying that for 35 years. It should be mandatory just like math, english, etc. The kids need to look at money as a "tool" used for building, not for digging yourself a hole. I took the Personal Finance class (an elective) in high school 37 years ago and it was a big disapointment. The teacher (the wrestling coach) new very little. First four weeks was how to write a check, keep it balnced, etc. The next two weeks was how to buy red meat. Obviously, the school district did not think it was an important class. But why would they, they all had great pensions, health benefits, etc for life.

April 05 2012 at 1:37 AM Report abuse rate up rate down Reply