Talking money with kids can be tough, especially when they start asking for an endless supply to fund their quest for games, apps and toys. There are all sorts of things to consider: what’s the right age, how much and what to pay for, and do you tie the money to chores? We were curious too, so we asked experts (including parents like you) to lay it all out. Here’s everything you need to know about giving your kids an allowance before dishing it out.
1. What age is the right age?
Every family and every kid is different, but there are some expert opinions on the minimum age to introduce monetary rewards into the family dynamic. Ron Lieber, New York Times Money columnist and author of The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money, believes that when kids start asking for money is the best time to start dishing out an allowance. Which, for most kids, is right around the time when they start kindergarten at five or six. If your kiddo is younger than five, you might want to stick to sticker charts or other "reward" programs until they are a little bit older.
2. How much and how often?
Once a month? Every other week? Weekly? It's hard enough determining the right amount to pay a kid, let alone how often.
To determine the right base amount, try a formula like the one Kristan Leatherman, co-author of Millionaire Babies or Bankrupt Brats? Love and Logic Solutions to Teaching Kids about Money suggests: For younger kids (8 and under) try paying your kids either .50 cents or $1 per week, based on their age. So a five-year-old kid would earn $2.50 or $5 per week, if you did it weekly.
Seem steep? We asked our team of parents and most agree on the half-dollar to every-year ratio. Weekly.
3. What types of chores or tasks should I pay them for?
Whether you’re on top of your chore chart at home or not, before you start an allowance system, be clear about your expectations.
Most parents and experts agree that certain chores should not be rewarded, since they are part of contributing to the household. So giving kids a quarter to pick up their underwear off the bathroom floor or put their shoes in a basket, not so much. Still, the point of an allowance is to make sure kids enjoy earning, even if they groan at the task at hand.
Got a 10-year-old who doesn’t need money as a motivator to unload the dishwasher? That doesn’t mean you don’t have to offer the incentive—it can be beneficial to give kids a few tasks they actually don’t mind doing mixed in with the ones that induce a groan.
It can be helpful to make a list of all of the tasks the family needs to complete in a week—let the kids help make the list. Then evaluate which of these are “allowance” worthy. Make sure each kid gets to pick one “job” they like but that other less popular duties are dolled out in rotation.
We love the idea of dividing the chores into two categories: the Chores Because You Are a Part of This Family category and the Chores Because You Want to Get Paid category.
4. What should my kids be allowed to do with the money they earn?
In a perfect world, this is the big teachable moment about the value of money. But ask any parent who has ever been in the Target aisle for five minutes too long: sometimes you just gotta give. Still, there’s a good chance to get your kids in the right frame of mind with a cool trick like this:
Separate your little one’s allowance into “spend money” and “save money” (two labeled jars make it easy). She can then decide to use up the spend money in one sitting or put it in the save jar until she has enough for a more expensive buy. You can even try a third jar for "give" so kids can learn the value of giving back with their own hard earned coin.
5. All, or nothing?
Many families don’t make a big list, though. Some award allowance based on a general merit: yes you did your share this week. You get a star. And a payment. While this can help you include and motivate with some of the more mundane tasks, this concept is not concrete enough for older kids. (Especially the ones really good at arguing with your every move.)
6. Stay organized with monetized chore charts or apps.
Mother of two Donna converted her regular chore chart into one that she could track money. She also discovered that when her kids wanted money for something she could use it as a way for them to earn. (Check out our favorite chore charts here.)
8. Compare yourself to other parents.
Curious what other parents are paying? Check out this infographic.
— Leah R. Singer with Gabby Cullen & Amber Guetebier