How Much Allowance Should You Give Your Kids?

This is a question for the ages. All parents want to teach their kids the value of working hard to earn a buck, as well as responsible money-handling techniques. And unless you want to be constantly harassed for money to buy this toy or that outfit or go to the mall with friends, it behooves you to set up chores for your kids so they can earn their allowance each week and start learning how to use their money wisely. But how much should you give them? No matter the amount, you're always going to think it's too much and they're always going to think it's too little. But it's important to strike a balance here; if you give kids too much they could end up feeling entitled. That's no good in a job market. And if you give them too little they might always end up settling for lower pay because they think they're not worth more.

Okay, so that may be blowing the situation out of proportion, but the truth is that you want to give them what is actually fair so that they learn the valuable lessons that come with receiving an allowance in the first place (and they can't get into too much trouble with their fun money). But how do you determine what amount is fair? There are a couple of ways. You could start by setting a dollar amount for chores around the house, with pay rising commensurately the more difficult or time consuming a task is. For example, you could pay $2-3 each time they wash the dishes. You could pay five dollars for every load of laundry (with folding). Scrubbing the bathroom or kitchen could be a $10 task. You shouldn't pay them anything for cleaning their rooms…that's something they should be doing on their own.

Think about setting up a list of weekly chores that rotates, so one kid isn't always stuck with the hardest tasks. And keep in mind that the child on dish duty may have the easiest job, but he has to do it every night, while whoever has the bathrooms gets hard labor, but only has to do it once. You can arrange it so that no matter which chores a child gets stuck with each week, the amount of allowance and the difficulty level more or less even out. And if kids want to trade chores (and swap allowance) you should support it as part of a household barter system (they'll virtually teach themselves about economics!).

Another option is to base their allowance not on the work they do, but on the cost of activities. For example, you could consider giving them enough money each week to see a movie and grab some food with their friends (say, $20-30). You may just want to compare merchant services to determine a median cost for activities your kids frequently enjoy. Or you could set a flat monthly rate for allowance to see how they manage their funds (as a way to determine if you need to help them develop good spending habits). If you don't want your kids to go overboard with spending or throw away their money frivolously, it's a good idea to limit the amount they can earn. But you could always offer to match their savings for big purchases like a new bike, a first car, or a senior trip as a way to encourage them to save and spend wisely.

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