Should You Give Your Child an Allowance?

Posted April 27, 2015 by

Most children are proud to have their art displayed on the refrigerator. My four-year-old son, on the other hand, is proud to sell me his art. “Oh Mom, you like this? Great, I’ll sell it to you for $2.”

My three children, including the four-year-old, are looking for an allowance. Since we haven’t started giving one out yet, my kids are trying to earn money other ways. My seven-year-old has offered to walk our neighbor’s dog; but, well, she’s not actually allowed to walk around the neighborhood by herself yet. My nine-year-old planned to set up a hot cocoa stand outside this winter but subzero temperatures shut that dream down.

My kids are not alone in their quest for a paycheck. According to the American Academy of Pediatrics, three out of five teens receive an allowance. I understand why so many families choose to give one. It’s a great tool for taking the mystery out of money and introducing its value in a concrete way. It’s not the idea of an allowance so much as the logistics that have been holding me back, like how much should we give and should they have to earn it? After doing some research, I have the information you (and I) need to begin putting our children on the family payroll:

How much should they get?

The American Academy of Pediatrics suggests giving a modest amount. Rob Lieber, author of The Opposite of Spoiled, offers more specific guidelines in his book: Start with a dollar a week or so per year of age. I’ll be taking the Lieber approach.

How much should they save v. spend?

The reason for giving an allowance is not solely to let our children buy fun things, but rather to teach them how to spend and save responsibly. In the same conversation where/that you introduce the idea of an allowance, introduce the concept of responsible money management and saving. Rob Lieber offers an easy way to teach your kids how to budget. He suggests giving your children three separate containers—one for saving, one for spending and one for giving money away to charity. It’s clear and easy to understand.

Should they earn it?

Experts are mixed. Some experts say chores should not be tied to external rewards, like an allowance. Chores, they say, are really more about being kind and responsible to the family. Tying them to money undermines this effort and may lessen/decrease a child’s natural motivation to help in the long run.

But other experts, like James Lehman, say it’s perfectly fine to pay your children for chores. “I think if parents are financially able to give kids an allowance, they should do it. Your child’s allowance should also be hooked into their chores—and to the times when your child fails to complete his tasks or has to be reminded to do them. So for example, if your child has to be told more than once to do his chore, he would lose a certain part of his allowance—let’s say a dollar. And each time you remind him, he loses another dollar. It is also appropriate to give that part of his allowance to a sibling who does the chore instead. This way, you’re not working on the chore, you’re working on the communications process, as well as your child’s motivation.”

Read More from James Lehman: “I’ll Do It Later!” 6 Ways to Get Kids to Do Chores Now

What are the spending parameters?

My nine-year-old son is hoping to save enough money to buy himself an iPad. But our family has strict rules about owning and using electronics, and no amount of money can change that. When you sit your children down to talk about their allowances, be clear about what they can and cannot buy with the money. Is candy okay? Clothes? Make it clear that their allowance will not override your family’s values.

Allowances are a wonderful opportunity to teach your children how to build a positive relationship with money. I’m excited to head to our local bank this weekend and open up savings accounts for all three of my children, like I did as a child with my dad. I’m sure it will be a true milestone in their lives, as it was for me so many years ago.


Jennifer is freelance writer for The Wall Street Journal and several national magazines. Earlier in her career, she was a journalist for “60 Minutes.” She lives in New York with her husband and their three children, ages 9, 7 and 4. You can read her other work at

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  1. SharonBallantine (Edit) Report

    It is important for parents to be united in this decision and how to teach kids about money. 
    The issue of feeling “entitled” to money without working for it is an important consideration. Attaching an allowance to specific chores can also lead children (and adults) to not wanting to do any work without receiving payment. As parents, we want our children to be loving and giving. This includes volunteerism and doing things for others (family members and those outside the family) because it is the right thing to do, not merely for a paycheck.

    Other parents have had the opposite challenge: by not getting an allowance their children ask for things they want and never learn to handle their own money, always expecting someone else to pay the bill. 

    Teaching children the value, power, and responsibility of money management is an important skill. 

    More important is teaching children the value of people, experiences, creativity, and having fun–regardless of how much money you have in your bank, piggy or otherwise.

  2. Mom of 3 Sons (Edit) Report

    My husband and I have gone back and forth on this subject since before we even started having children.  We chose not to give allowance to our children, but rather provide for their needs as a family and give them household responsibilities appropriate to their ages.  My 11 year old son has just recently been given the opportunity to work at the snack bar during baseball season.  He has loved the opportunity to earn a real paycheck and can’t wait for his next shift.  He doesn’t have many shifts as his own baseball team has commitments during most of the open shifts, but he really values the opportunity to earn this money.  Through this opportunity, he has started to learn how to handle his money.  At 11 years old, he is understanding much faster that he has to be responsible with that money and saving it is necessary to his future.  He doesn’t get a lot from the job, but it’s enough to teach him what he needs to know about money management …and we are teaching him the importance of good working habits as well.  We plan to continue this method with our other younger sons as they grow.  Right now they are listening and watching older brother’s steps, but they have to wait for their opportunities to come in a couple of years.  In the meantime, they are well provided for and do not need to fuss for what they want.  Birthdays, Christmas, and other events are appropriate times to express their desires that go beyond their needs.  We have opened bank accounts so that when they are given money for these events and holidays, they can put some away for their future.  Our oldest has about $200 saved in his account right now, and that’s enough for him.  The accounts are set up for them not to get to until they are 18.  We hope they have a nice chunk of change to pull from at that point.  Every family is different, but this is what has worked well for our family.

  3. Tricia (Edit) Report

    Since Kindergarten we had given our daughter an allowance…$1 per year of age every second week (like our payday).  She too had to save for the future, think of others and the rest went into her piggy bank. She would occasionally lose her allowance as a punitive measure.  Her allowance was not tied to specific chores, the things she was expected to do around the house were her fair contribution of being part of the household.  After several years, we have learned that she feels entitled to this “free” money.  We recently stopped her allowance and have decided that, while she did learn valuable money lessons, she is of an age (almost 10) where she should be contributing more to the household and earning that money to avoid the sense of entitlement she has developed.  We were opposed to the idea of working for an allowance initially, but it seems to have backfired on us.  Perhaps one should consider their child’s age and personality when figuring out the parameters.  It has been a work in progress for us but we feel that there are financial lessons to be learned at even a relatively young age.  Thanks for your article.



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