Giving Your Child an Allowance

I earned my first allowance of $2 per month by doing weekly chores. As an 8-year-old, my chores included making my bed, emptying my garbage can, dusting and vacuuming my room. My dad would have surprise “military” inspections to check that we were doing our chores properly.

When parents consider giving their children an allowance, one of the first decisions is usually whether to connect an allowance to household chores. But many parents find themselves spending more time trying to determine whether chores were completed or done up to family standards. Looking back, I see now that my father gave us plenty of notice for those “surprise” inspections, so he could try to avoid the stress of having to deny giving us our allowance.

My wife and I both agreed that it was important to teach our children how to manage their money at an early age, rather than waiting for the “right time.” We also knew that we wanted to play an active role in our children’s financial education.

So, we decided to give an allowance as a teaching tool, not as a reward for doing chores. Over time, we saw how this decision allowed us to spend our time and energy teaching financial discipline and having conversations with our children on their three money management choices: spend, share or save.

We knew we made a good decision the day my 6-year-old daughter took a $10 bill from her Lion King purse and put it into an animal shelter donation box. (Initially, I was tempted to break open the box.) This gift was overly generous on her part, as the $10 represented months of saving. What I remember most, though, was the proud look on her face as she looked up at my wife and me and said, “I just helped the animals. It was my share money.” At age 6, she was already learning that with every dollar, we have a choice — spend, share or save.

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