Allowance for School-Aged Kids

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  • How much spending money should an 8-10yo have?

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    Jan 13, 2020

    I'm curious, what do your young children (8-10 year olds) spend their own money on?  My child has money he gets from gifts, finding change in pocket while doing laundry or on floor while cleaning (which he can keep), and some extra tasks he gets paid for (like tutoring younger sibling, doing chores not assigned to them, babysitting, etc.).  Our rules are he has to put 50% of it in the bank to be saved for car or large parent approved purchase (likely a cellphone in a few years), and the other 50% he gets to keep for spending.  Anything above the 50% he adds to the bank account we match to encourage more saving.  The amount he keeps for spending in his piggy bank he uses to bring to school to buy candy or other stuff from various fundraisers, buy school lunch (we always send home-made lunch with him but if he wants to buy lunch or snacks he is allowed to use own funds), uses during the Scholastic book fair to supplement the funds we give him, uses to buy gifts for family (sometimes as we encourage hand made gifts), and birthday gifts for some of his friends (we cover most of them, but some he contributes to in order to make it nicer). 

    I know roughly what balance he carries in his spending money fund (and his saving account is on track and doing well) and as we are making the decision to implement an allowance for him we are curious other other kids use their free-to-spend money on in order to set his allowance accordingly (or not do it at all) or increase the expenses he is responsible for.  

    Jan 13, 2020

    My daughter's spending in elementary school was similar to yours: school lunch (until she got sick of it) and book orders, mostly. We divide her allowance into three bins. In addition to the "spend now" and "save for something big" (with approval from mom and dad), we also designated 20% as "save for college." I figured it was never too early to learn that you don't get to keep you entire paycheck (I remember my shock at my first real job seeing how much money taxes ate up), and it also got her thinking about and invested in (literally) the idea of going to college.

    Now that she's older (15), she spends more on snacks and going out with friends, clothes, gifts, and other "wants."

    Jan 15, 2020

    My own goals of my kid spending his own money are:  1) learn delayed gratification  2) make good AND bad purchases to learn from experience and  3) learn value of money and how to spend carefully.  So I actually want him to spend and control his own money.  Allowance was purposefully modest : $1-2 per week. $1 starting in kindergarten $2 by 5th grade, with no requirements placed on it.  There was also the tooth fairy, plus birthday/christmas money from grandparents totaling under $100 each year (w/context that the grandparents wanted him to choose a toy). He's had a bank account since infancy. We had engaging conversations about the importance of having savings for the future... since saving is happening voluntarily, we don't have a formal requirement.   Routine household chores are are not compensated, but there are occasional opportunities to do an extra chore for money.  When he finally bought the coveted Nerf, he took good care of it.  He carefully researched lego sets before choosing the perfect one.  Buying toys from yard sales or flea market with his own money was a popular pastime.  He learned that buying secondhand was a often a good value.  Buyer's remorse is also a powerful teacher -like  buying a toy that looked fun based on marketing (but wasn't), or a toy that broke quickly, or that time he just had to buy an artificial blue drink out of a vending machine, then after taking one sip, thought it tasted terrible, and ended up dumping a nearly full beverage down the drain.  $1.50 worth of regret was well spent that day.   When we are out running errands, one of my pat answers to requests to buy restaurant food/fast food/snacks is, "Sure, with your own money."  If buying food, etc from concessions is part of the outing, I will hand my kid a bit of spending money - whatever is not spent, he can keep, but if he wants more, it is from his own money.   His having control over his own money really shuts down the asking to buy things.   We encourage and model generosity too, sometimes he will buy a small gift for a friend or family member when he sees something he knows they would like.  He has accompanied me every December since toddlerhood to buy a toy and deliver it to the local fire station for Toys for Tots; last year he decided on his own to buy one with his own money.  By middle school, I think he had a lot of practice at saving, delayed gratification, and making spending decisions.  I do have to say a calm personality and lack of impulsiveness has helped too. 

    Feb 7, 2020

    We didn’t budget what portion of our child’s allowance money could be spent on what. We talked openly about our own spending decisions, so that we communicated that every decision was a trade off of some sort. We explained that we saved for larger purchases, then, when they wanted something more expensive, we helped them figure out how long they would need to save for that purchase. Before long we were parenting a champion saver.

    Very early on our kid started making charitable contributions on their own, with no urging on our part. In fact, one day they told us that we should be giving a lot more to charity; we told them how much we did give and that was the end of that.

    Now our kid is about to graduate from college. At the beginning of their freshman year we gave them all four years worth of the money we had saved for their spending money during college. They understood that it was up to them to budget effectively. They did such a good job that they are graduating with a full *year’s* worth of spending money still in the bank, and this is after they paid the full cost of an optional summer language program overseas (for which we offered to pay). Obviously someone else might have made very different choices, but I think the freedom to make their own mistakes was important in how they manage money today.

    Also: I think that if we had required them to save for something ten years out - like a car when still in elementary school - it would have been too abstract. That timeframe is just unimaginable for someone who still announces their age by including quarter-years.

    Feb 10, 2020

    Have you ever heard of "The Opposite of Spoiled" by Ron Lieber (I think)?

    I think we will follow the philosophy described there when our kids are old enough to deal with money.

    You basically have three buckets that you ask them to think about:

    1. spend (now now now :o))

    2. save (for future use)

    3. share (i.e., charity)

    Feb 12, 2020

  • Allowance for 8 year old

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    Jan 15, 2019

    My eldest is 8 and has been asking for an allowance for about a year now.  We have been giving him money on and off for activities, trips to a store with a parent where he gets $x and allowed to spend it on one thing or add it to his savings, and as gifts for occasions, but nothing consistent.  He is an amazing kid and very helpful around the house and watching younger siblings (he is better than a paid mother helper when it comes to watching and caring for his young toddler sibling while I work from home on school closure days) and we don't pay him for any of that, so decided to start giving him an allowance since I like it more than paying him for house chores/babysitting (with parent at home always, but still very helpful).  He mostly wants to use it for purchases that we don't want to spend money on but he wants and for in-app purchases, and buying apps or video games that we don't buy for him (outside of birthday/special holidays).  He has a piggy bank where he saves his money in his room and spends it periodically when there is something he wants, and we might get him a bank account soon.  I'm interested in crowd sourcing as to what is a reasonable amount for an 8 year old?  He told me his friends are getting $20/week, which seems high to me since it is around $1,000/year of discretionary spending for a little kid who already has everything he needs purchased for him, but we can afford it and if that is what his friends are getting I guess it is ok, but I'm curious as to what others are doing. If we do the $20/week, I'm thinking of splitting it with $10/week goes into his piggy bank for him to control and the other $10/week going into his bank account to be saved for larger purchases he might be saving for that he can spend with parental approval (like a new video game system, a phone when he gets older, or other more expensive items). He is my eldest and I never received an allowance growing up so really not sure what is reasonable here. 

    Jan 15, 2019

    $20 seems like a lot for an 8 year old, but your kid sounds very mature and responsible with money. Assuming it's not a financial burden for you, it's probably OK.  I like the idea of having him put half of it into his bank account. You should also lay out clearly what you will and won't be paying for going forward.  You might also consider talking to him about donating money to causes he is interested in.  I had a really hard time getting my son to see any value in giving away his money, but it's worth a shot.

    Jan 15, 2019

    Wow, $20/week seems SUPER high for an 8-year old but I'll be curious to hear what others say.  Our high school son gets $10/week and our middle school daughter gets $5.  We started out at $1/week when they were younger and went to $5 around age 10.  Of course, our decision was partially impacted by what we could afford, which is less than you.  I do like the idea of putting half in savings, though it all depends on the kid - our younger wants to save all her money for college while our older just spends it.

    Jan 16, 2019

    I have 3 kids (21, 18, 13) and always gave them a dollar amount per week based on their grade. So, 3rd grade = $3/week or $12/mo, 7th grade = $7/week or $28/mo. I found that was enough, but not too much. They were always motivated to babysit, umpire baseball games, do odd jobs for neighbors etc to create more money for themselves. In high school I switch them to a bi-annual allowance and they pay for pretty much everything themselves. This has worked great for all my kids (something you can rarely say when you have 3!) and they all have solid money management skills, even though they spend their money differently.

    Jan 16, 2019

    After doing some research on the topic, we give 1/2 of the age in allowance to our kids, rounding down. So for our 9 year old, weekly allowance is $4. When he turns 10, it will go up to $5/week. As you say, since all his needs are covered, this is really money to help him learn how to save, spend, delay gratification. We loosely try and follow the Save/Spend/Donate method, using cups or jars where they can distribute their money visually. The Money writer for the NYTimes has some good articles on the subject, including advice on whether or not to tie it to chores, etc. 

    Jan 16, 2019

    We started giving my daughter an allowance at age 5, and she's always gotten $1 per year of age. Now that she's a high school freshman, that's $14 a week. We divide it into "spend now" money, "save for something big" money, and "save for college" money (my ex handles the allowance so I don't remember the exact allocations, but something like 50%, 30%, 20%, respectively). The save for college money embedded the idea that she was going to go to college from and early age, and also brings home the message that in life, you don't get to bring home 100% of your paycheck (I remember when I got my first job being shocked at how much got skimmed off). The college money eventually migrates to a UGMA investment account that I set up for her.

    Jan 16, 2019

    We give $5 each to our 9 and 7 year olds, although they/we are very inconsistent about it (they forget to ask and we don't offer many weeks). I didn't want it tied to chores because I want them to learn to do them for the good of the family rather than an external reward, and I didn't want them to have a way of getting out of chores (that's OK, I don't need my allowance this week). We've had mixed success on both accounts... I've also discussed the value in saving and donating some of the allowance, but have yet to make headway in that area. They actually decided on their own to pool their resources and will occasionally go to the toy store together and each pick something out. $20 seems high to me as well, but if you do decide on that amount, I would suggest the save/donate/spend approach. I have a friend whose kids get their age as an allowance, but have to save some and donate some, so it ends up being a small amount each week. I found when we first instituted the allowance about a year ago, the money added up quickly and there were lots of little toy purchases that seemed wasteful to me. Like you, we are able to provide all of their needs, so this was really a way for them to have some autonomy and to learn some about finances. 

    Jan 16, 2019

    Yeah right, my kid tried that one.  He still says other kids get to stay up until midnight on videogames, get $200 sneakers, whatever, so why can't he? $20 a week for an 8 year old is too much.  $20 a week for my 14 year old is too much.  We've gone with a dollar per grade, plus extra money for extra chores, good grades and behavior in school, recycling bottles, etc.  He's got a phone and an xbox, a trendy hoodie, and has plenty of aunties to spoil him.  He's rich.  

    Jan 16, 2019

    $20 each week seems very high for an 8 year old. We give our 15 year old $25 each week and she buys snacks and clothes, pays for her friends’ holiday gifts, goes to movies, etc... The savings idea is a good one.

    Jan 16, 2019

    I feel cheap. Lol. We give our kids a dollar per year per week. The 10 year old gets $10/week while the 4 year old gets $4. We do buy them most things they ask for so I feel like the amount we give them is reasonable.

    Jan 16, 2019

    I’m also really curious about allowances for kids, and personally prefer a set amount for meeting a list of responsibilities rather than a pay-per-job chart... for example, my 7 year old’s list includes: clean up after meals, sweep floor/vacuum, pick up room, practice piano, etc. However, my jaw hit the floor when I saw your number of $20! He gets $3 for completing all chores, which I would honestly expect him to do regardless, as a member of the household. One thing to think about is “inflation” - if you start at $20, what are you going to be paying when he’s 12??

    Jan 16, 2019

    I also have a responsible 9 yr old that helps out with his 7 yr old twin siblings and around the house, so I was also facing the challenge of money.  Not wanting to "pay" him for what comes naturally with being part of a family dynamic, but wanting to acknowledge his help, I came across a website to a program that families can adopt and it's called Greenlight card.  The concept is simple in that you apply for a debit card and then you control how much money goes into each account ( I opened one for each kid) and you can even set the stores/ sites they can spend their savings. It seems to be working for us, at the moment, one kid has $12, the other two have $6.  Baby steps.  https://www.greenlightcard.com/ 

    Jan 16, 2019

    For him set up son we set up the rule of thirds. 1/3 he can spend whenever he wants, another third is for short term savings that can be liquidated after being saved for a few months ie for a gift for another person, something he feels is urgent or Christmas time. The last third is long-term savings that can’t be liquidated or touched until he graduates from high school. We opened up a bank account with him and talk about money management/budgeting every few months. 

    Jan 16, 2019

    I agree that $20/week is way too much for an 8 year old. I have 8 year old twins and have been giving them $3/week for the past year or so. Every week when I hand out the money I ask them whether they want to put any of the money towards their college funds or charity. They often do so and I keep the college and charity money in special envelopes. The remainder of the money goes in their piggy banks, wallets, or locked safes. I try to let them spend the money as they see fit, but also encourage them to avoid buying candy or junky plastic toys. BTW, I got them cheap locking safes after I discovered that one of their friends had stolen money from them during a play date. 

    Jan 16, 2019

    I'm dubious about the claim that his friends are getting $20/week to spend on whatever they want. That sounds outrageous. We give our 13-year old $20/month so he can go out with friends to boba or occasionally lunch or something. If he wants to do something and can't afford it (like go to the movies), we might just give him money, but he's expected to pay for most of his social life. We could afford to give more but want our son to learn to prioritize his wants and needs. And you know what, he mostly doesn't spend his money. He'll go out with friends a couple times a month and is now mindful about loaning money to friends and not getting paid back (used to be an issue when it wasn't his money). He also tutors kids in math to make extra money, but he saves most of that too.

    Our middle son is very helpful around the house and often goes above and beyond. Maybe once or twice a year I'll give him an extra $20 and tell him thank you for all the extra work he's doing. He's grateful for it and feels sort of bad for getting so much.

    Honestly, at 8 i would think $5/month is plenty. Maybe $8/month since he's 8. If he does well with that, then give him more. If you feel bad, start putting some money every month in a bank account "for college" so he knows he has a bunch for when he's older but doesn't have access to it now.

    Jan 16, 2019

    My son is nearly 8 and he has been getting $1 per week for probably 3 years now. He also basically gets everything he wants from us (though he has to wait until his birthday for big things) and things he wants that he doesn't get, like video games, are not about the money but about us not approving them. He gets money for his birthday from relatives. We give him $1 per week and he can earn extra for chores when he really wants to save up for something. He can choose to spend it, lose it, or save it; It is 100% his. I think that allowance at this age is about learning to budget and having some control. It isn't really about the amount, but about the practice and learning about money. My son, it turns out, mostly just saves it. I pay him interest once a year on his savings to encourage that. When he says he really wants something that I don't feel like buying, he can buy it with his own money. I would consider raising it to $2 per week now that he is nearly 8 but he hasn't asked. I would not go anywhere close to $20 per week! I think my son is too young to start making decisions about buying a new back pack or a new sweater that he needs and at $20 per week I would want him to take on more of his costs. Maybe your son is more ready. 

    Jan 16, 2019

    Wow! We’re in an OUSD public school in one of the wealthiest hills communities in the city and I’ve never heard of a child getting $20. At 8, we gave our child $8, split roughly 3 ways - Save, Give (Donate) and Spend. Our son is now 13 and he gets $4 Save, $4 Give and $5 Spend because he sometimes buys snacks now. He wants for nothing! He’s amassed about $200 in his bank account (not the savings one, which is much higher) because he doesn’t spend often. We don’t buy him toys and treats other than birthday and Xmas - but he still has loads of stuff. All his friends get about the same or less, except one kid whose parents give about $10. I’ll be interested in your responses!

    Jan 16, 2019

    Hi there- we just started with our daughter who is 6 1/2. We give her 50 cent per week. In return she folds all laundry and keep her art desk clean. I know it’s low and she doesn’t complain because she doesn’t have full grasp of the value yet. Maybe try with $5/week? Or a bit less.

    Jan 16, 2019

    This is a very interesting topic for me because, in my experience, most of my kids' friends get a lot of allowance. It seems like excess. In my option, there is no reason an 8 year old who has everything he needs, should feel entitled to $20/week. I have 12 year old twins and they get $3 a week each. We started allowance a few years ago (probably at around age 8) at $1 a week, and went up to $2 last year on their birthday, and $3 this year on their birthday. They have everything they need, we pay for their outings and clothes and buy them birthday presents. So, in my opinion, they don't really need much money.

    We don't put any limits on what they spend their money on. Its their money and I think it is a good learning experience for them to figure out how to spend it. Sometime they give it away, sometimes they don't. They buy gifts for family and each other at the holidays. But, mostly, they waste it on stuff that I wouldn't buy like candy or unnecessary items (they don't play video games).

    In general, I think you need to think about what values you want to instill. I am really opposed to the excessive spending that goes on in our society today, and try to pass that along to my kids. I don't buy a lot of stuff because I don't need it. Instead, I like to spend my money on travel, and experiences. But, I think you have to start with what works for you and is consistent with your personal family values, and go from there.

    Good luck.

    Jan 16, 2019

    Yikes! $20 a week is a ton of money for an 8 year old.  We only gave my son $5 a week when he was 8. Even now at 13 he only gets $10. But he does receive several hundred dollars each birthday and Christmas from relatives so maybe that’s a factor. 

    It sounds like your son is super helpful and responsible though (unlike mine—Ha!) so maybe he can handle that amount of money in a positive way. 

    Jan 16, 2019

    Figure out what you're spending now, averaged monthly or weekly, on those "on and off" gifts of money to spend for activities, games, and shopping trips.  That's a reasonable amount to give him as a regular monthly or weekly allowance instead.  Stop buying stuff for him, and allow him to learn how to budget for the things he wants.  For some families, it also makes sense to require children to divide their allowance among spend/save/give categories, effectively giving the kids a share of control over the amount the family would otherwise save for longer-term goals (such as college) or give (to charity/community) anyway.  For others it works better for allowance to be meant only for the children's personal expenses, and have the kids choose for themselves whether and how much to set aside for things other than immediate "fun money".  What dollar sum is appropriate will vary depending on your family's total income and budget, and on what things you expect the allowance to pay for.  $20/week seems high to me, but it's not wrong if that's what it takes to cover the things you would otherwise buy/save/gift for him yourself.

    I wouldn't advise requiring your kid to set aside a certain amount for bigger-ticket personal items (that you wouldn't necessarily otherwise buy), though, because really the point of an allowance is to teach money management, and allow the kid to make mistakes when the stakes are low.  (In other words, if he wants a new gaming system in a year, but has spent all of his allowance on apps and candy, too bad for him!)  But do consider whether there are other medium-term savings items that you would step in to pay for if necessary, like, say, soccer uniforms, and whether he's mature enough to be responsible for those now.  (You can always start with allowance being only for "treats" and increase it later to cover more necessary items - by high school he can be expected to cover his own clothing, personal products, lunches, school and extracurricular expenses, etc.)  Explain to him what things he will now be expected to pay for, instead of asking you for money, and help him do the math.  Open a savings account - you can have his allowance automatically transferred directly into it from your own bank account - and consider getting a reloadable prepaid/debit card that he can use for expenses, rather than regularly dispensing cash (which is probably inconvenient for you, and is difficult for him to spend on computer apps/games!)

    Good luck!  And remember, whatever you decide, you can change it if it isn't working out. Revisit the budget every so often, maybe annually or whenever there are changes in his life (like going to middle school) or your family circumstances that affect your finances.  Remember the point is to prepare him for independently managing his financial life after high school, and determining his allowance on a budget basis will do that, but different kids get there in different ways. :)  (I have two teenagers, one is a "spender" and the other more of a "saver", but they both manage to cover their personal expenses in one way or another!)

    Jan 16, 2019

    I think $20/wk is fair especially considering how helpful he is. It's great that he is interested in paying for his own things and taking on this responsibility. My daughter was a few years older when I started giving her a regular allowance and I think it was $100 month. She did really well. Now she is a teen and the allowance has grown but she is adjusting and learning lessons because teens spend a lot more on eating out, movies etc...You can open a joint account with your son and he can get a debit card to use and you can track what he is buying. If you also open a savings account and link it a good way to save effortlessly is to do keep the change (that's what they call it at Bank of America) so every time he buys something it gets rounded up to the nearest dollar and the difference automatically goes into the savings account. It adds up quickly. I do not tell my daughter how much to save each month. I feel like that is part of what she has to figure out, planning for the future. It is also ok to let them learn the hard way that if they spend all of their money it's no fun to have to be broke until the next pay day!

    Jan 16, 2019

    I have an 8-year old and I am contemplating giving him an allowance as well. $20 sounds like way too much money. We were thinking $5-$8 per week. I would also kindly urge you to create a third category for what your child can do with the money - save it, spend it, and donate it. Especially if you are giving $20/week. It is important for children to experience the joy of giving financially to those that are in need. 

    Jan 16, 2019

    Wow, $20 a week?! Our children are 6 and 9 and get $1/week.  They are expected to help around the house as part of the family living there.  We don't say no to what they want to purchase with their money, but try to get them to at least sleep on it.  They also have money they receive at birthdays, etc. That being said, I heard a reasonable amount was the child's age per month, so we're thinking of giving them a little bit more at this point.

    Jan 16, 2019

    IMHO $20 is waaaayyy too much for an 8 yr old. There are many many families who could never give a child of 15 yrs that large an allowance, let alone an 8 yr old. As he gets older - how much more would you plan to give him? $25 a week when he's 10?  $30 a week when he's 12? If it's his money, it seems to me he can spend it anyway he pleases. Otherwise you could put money in a bank account for him weekly and tell him you're doing that for his college education or whatever.  Also I think he can buy a new video game every 3 weeks with that kind of an allowance.

    Jan 16, 2019

    I do $1 per year of age, so at age 8 my son was getting $8/week. I made him split that into 50% savings, 40% checking, 10% charity. Now, at age 15 his allowance is $15/week, but he is a terrible saver (mostly spends his money on in app purchases too), so I double it any week he manages to keep his checking account balance over $25. He still has to do 50/40/10. So, back to the point, $20/week sounds like too much to me, but the point of allowance is to learn how to budget, so the amount doesn’t really matter, as long as he’s learning good financial habits. If you are going to give him anything over $10/week, I would either do the 50/50 thing you mentioned, or make him responsible for one recurring expense (like school lunch or something), so he learns how to manage it. 

    Jan 16, 2019

    My 7 and 5 year olds started getting an allowance this week. I read "The Opposite of Spoiled" (highly recommend) and am using the principles in that book: (1) $1/age each week (so $5 for my 5 year old, $7 for my 7 year old), (2) evenly split between Save/Spend/Give jars. (Spend is truly for impulse purchases, Save is for pre-determined things they want that they're saving toward, Give is for a charitable cause of their choice.) It's worked really well in our house in developing financial literacy and rewarding responsibility around the house.

    Jan 17, 2019

    Hello,

    i give my nine year old son $3/wk and we put $3 in a jar and after ten weeks he can spend the saved $30. Then we start again. $20 seems like A LOT!

    Jan 18, 2019

  • Allowance for tweens

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    Mar 31, 2018

    We haven't (yet) issued allowance to our tweens.  We've read a few rules of thumb about how much "should" be given and helping them make decisions for spending/saving/giving but... we're not consumers.  We buy books at the library bag sale, rarely new. We buy clothes at the thrift store and get handmedowns. We love CL and garage sales. We're not scraping by, we live well within our means but no one in the family wants the latest and greatest. We rarely go (or want to go) to movies. We don't redo the home decor regularly. We pay our bills, buy when something is needed, gets wants at holidays. We are not Starbuckians and Yogurtlandians.

    We read "Opposite of Spoiled" which is written to upper/middle class and suggests having kids spend their own money if, e.g., they want soda when eating out, but none of us craves soda, we all happily order tap water, occasionally they will ask for milk. They get money for holidays and it simply gets saved (yeah!), every once in a while one will seek an unneeded "treasure" from the thrift store or desire a between-holidays toy/game/gimmick and then a little is spent.  We tried on vacation to inspire some spending - you have $xx for souvenirs, nada.  We offered special (one-off) chores that they could do for money, no interest.

    We don't want to provide an allowance and then need to create artificial means for them to spend to attempt to teach a lesson. We've heard of families setting up a snack cabinet and charging for kids' snacks.  Ours are already happy to grab a carrot even if there's Halloween candy handy.

    So how, in a non consumerist family, does one issue an allowance for kids to learn good spending habits?  We talk about our choices and explain how credit cards work and how to think ahead that, e.g., the car will need tires.  They see and hear budgeting happening and financial choices being made, so they aren't blind to financial decision making.  We talk, too, about public budgets: roads, social services, community workers. We donate and involve them in the process.

    Does someone else have non-consumerist kids and figured out a reasonable allowance scenario?  The kids "want" an allowance as it's "expected" but also, they agree, don't have needs/wants unmet, not due to an excess of things, but due to a lack of desire for "stuff."

    Mar 31, 2018

    Your kids sound fantastic. Your family sounds fantastic.

    Saving habits are just as valuable as spending habits. I imagine that right now their money is invisible to them because the holiday gifts are in a savings account. So if you give them a reasonable allowance (we gave $1 per grade level per week, so $6 per week for a sixth grader), they will have a chance to practice having easily accessible cash and learning not to spend that on a whim. If they never spend any of it, that's totally great -- you definitely don't need to force them to spend it. If they splurge one day on something they don't need and later regret it, that's also great.

    Apr 2, 2018

    Sounds like a nice problem to have. Why not just give an allowance that you're comfortable with giving and let your kids decide.  If they don't want or need anything, then they can save it in their bank accounts.  At some future point in college or beyond, there will likely be a bigger ticket item that they want, like a car, or money for an apartment or computer, and they'll have the savings.  

    Apr 2, 2018

    We are in a similar boat.  Our kids in theory have an allowance, but we typically forget to give it to them and they forget to ask - for the reasons you note.  As a kid, I always used my allowance on candy and treats, but my kids don't have that interest.  Our kids have used their own money on gifts, like purchasing a gift for a parent for a birthday.   I can imagine that might not work for all, but that's something that's worked well for us. Another thought would be to think about donation opportunities.  Maybe they get an allowance and one portion (or all!) of it is put away to donate and one portion is for them for savings or spending.   Then once or twice a year they get to pick a cause they care about and decide where to donate "their" money.   They might feel more ownership in the donation doing it this way?  good luck!

    Apr 2, 2018

    Financial management is an important lesson to learn.  We're a fairly non-consumerist, modest family; however, we have one teen who is and always has been very "have a penny, spend a penny", and one teen who is and always has been a saver.  When the spender started to want more things, like endless Pokemon cards which evolved into frequent requests for money to go to the movies with friends, etc., we started a system where there was a job board with jobs listed and what we would pay for them.  This worked well for a while - both worked, the spender spent, the saver saved.  

    Now that they are in their teens, they do get a modest allowance, enough to go out to lunch with friends once or twice a week (depending on where they go), plus opportunities to earn more should they so choose.  The spender, the older one, now also has a summer job.  Parents provide the basics - food, shelter, basic clothing, basic phone and service, family outings, etc.  Teens are expected to pay for their own social activities, and any extras they might want, including things like make up or top label hoodies, etc..  The spender actually saved enough for an Xbox (a bit to my dismay!) and continues to eventually spend everything he gets.  The saver treats herself to lunch or ice cream with friends and decided to splurge on a new iPhone (holiday gifts helped with that, experienced buyers remorse), but also continues to build a savings.  All good lessons.  Your tweens may not desire much now, but I suspect that may change as they get older.  Might as well start laying the ground work.

    Apr 2, 2018

    What a great problem to have!  

    Have you heard of Mr. Money Mustache?  If you haven't seen his blog I would encourage you to check it out.  HIs kid is younger than yours but addresses a lot of these issues and approaches.  There is also a very active forum with lots of likeminded people sharing their ideas/tips.  He doesn't blog as much as he used to but it is still a good resource.

    I thought the approach my parents took with me was useful.  I had chores around the house that were required, I had additional chores I could do to earn money, and I had an allowance that was intended to cover mutually agreed upon categories of spending - eating out with friends (e.g., off campus lunches, burritos after school), clothing, entertainment/movies with friends.  With a mix of categories - some wants and some needs - I was forced to learn to budget .  A snack stand at home is one of the most ridiculous things I've ever heard, don't do that.  And definitely don't encourage spending - your kids have a great instinct!    

    One final note - in high school I read One Up on Wall Street by Peter Lynch in Econ.  It is such an old book now but it changed my life.  Because of that book (and the good sense of my Econ teacher to teach a bunch of teens about personal finance) I started maxing out IRAs when I was 17 and have always handled my own stock investments successfully.  My parents did offer a $1 for $1 reimbursement for every dollar I tied up in a retirement account for the first few years. Learning the essentials of how $1 today compounds into financial freedom later in life, and the opportunity to pursue your dreams, is a great lesson to teach a tween.  

    Apr 4, 2018

  • Allowance or monetary award for 6 year old

    –
    Jun 5, 2017

    I have a 6 year old whose friends have their own money, so he is asking for allowance or how he can earn money.  I don't feel right giving him an allowance as I don't want him to get used to getting money for nothing and I want him to get into the habit of working for money so that he values it more.  He gets cash from grandparents and us sometimes for holidays or as gifts (for finishing K, getting a new belt in taekwondo, etc.) and gets to spend a certain portion of it as he wishes (candies, little toys, etc.) and has to save the rest for larger purchases that are approved by us (lately most are video games).  But his friends are getting allowances so he wants to increase the frequency of when he gets money so he does not want to wait for holidays and special events.  We have agreed to give him 25 cents for every small book he reads by himself after the first book per day that he has to do as part of homework, which he is pretty happy about though it is a small amount.  He is great helper around the house (for his age) and I don't want to pay him for regular chores since he has to do it to contribute to the household he lives in, but I was wondering what others let their kids do at home to earn money that is not a regular chore around the house.  He is too young to work outside the home, so if he wants to make money we have to come up with ideas of things for him to do.  If you chose not to do a no-strings attached allowance, what opportunities do you provide your young kids to earn money?

    Jun 5, 2017

    This might not be the answer you are looking for, but I think you either have to give him a "no strings allowance" or pay him for normal chores he does as a household member.  Personally, I agree with you that it's better if kids do regular chores without getting paid for them, the same way adults in the family do laundry or cook or whatever, without getting paid specifically for that work.  But the adults in the family, whether they have jobs or not, do get spending money, and the kids should too.  It seems unfair if he is part of the family when it comes to doing chores, but not part of the family when it comes to sharing in the money.  Also, it will really help him with money management if he knows he has a regular amount coming in each week.  Mind you, the allowance doesn't have to be a lot, especially at age 6.  And it doesn't have to be as much as his friends get, either!! But if you really don't feel comfortable with a regular allowance just for being part of the family, then I think you should pay him for chores.  

    Jun 6, 2017

    Just wondering, why is it OK to not pay him for chores, but pay him for reading extra-curricular books?

    Seems like it would actually be better to flip that. I mean, one is generally thankless tasks and the other is something you want to engender as a self-fulfilling/enriching activity, right?

    If you want to keep paying him for books, that's fine, but I have to agree with the previous poster who said that it's unfair for him to be a part of the family when sharing the workload, but not a part of the family when sharing the financial gains that said workload ends up enabling (even if indirect).

    Jun 7, 2017

    Also adding that you don't have to pay your kid "per chore" but a regular amount contingent on being good about chores seems like it would get you the benefit of instilling the habitual regularity of chores without directly associating doing that for the sole purposes of monetary gain.

    Jun 7, 2017

    I disagree with paying kids for doing things like reading books and getting a new belt. I wouldn't want my kids to do those things for money but for the sense of accomplishment that comes with it.

    We give each kid an allowance (25 cents/week for every year old they are so our 6 year old gets $1.50/week) and everyone is expected to do chores because they are a member of the household and everyone needs to contribute. 6 year olds can feed and water pets, take out trash and recycling, unload about half the dishwasher (silverware, pots and pans, any plastic stuff that is put away low down), collect mail, clean their room, help fold laundry, sweep, etc. Our oldest is 12 and soon will start getting a bigger allowance once school starts in the fall. But he also does stuff like make dinner once a week and babysit the youngest and clean the bathrooms.

    Jun 7, 2017

    Check out this blog. I think he pays his kid per mile walked/scooted/biked. Lots of other interesting ideas too: http://www.mrmoneymustache.com/2015/05/20/what-im-teaching-my-son-about…

    Jun 7, 2017

    Hello,

    i have a seven year old and I expect him to do chores because he is a member of the household. I give him allowance so that he can learn about $. I give him $2/wk that he can spend as he wishes and I put $2 in a jar. When he has $20 in the jar he gets to spend it on something that we discuss and agree on. I think the saving up part allows him to experience what it's like to save up and have a bigger chunk to spend and then he also gets the smaller weekly allowance for a more immediate gratification experience. 

    Jun 7, 2017

    Here's a great article on allowances. 

    http://blog.positivediscipline.com/2011/05/allowances-can-teach-life-sk…

    Jun 7, 2017

    Have you heard of the book make Your Kid A Miney Genius (Even If You're Not)? It talks about how to build good money habits and some of the ideas are counterintuitive (like giving them money every week that isn't earned by doing chores). While I only have a 2 yo, I have several friends with older children and they said they've seen some great habits forming by only 4 or 5. 

    Its so great that your asking this question and I'll be reading other responses to hear about differebt experiences!

    Jun 7, 2017

    I strongly disagree with paying children for reading books. Reading should not be associated with chores. He is 6 years old: why not a sticker for every book he reads, and then a cool book as a reward when he gets a certain number of stickers? It's great that he helps around the house, and his allowance can increase as his responsibilities increase.

    Jun 8, 2017

    I agree that it sends a strange message to pay our kids for nothing and also for regular chores when that should just be part of contributing to the household. But I also wouldn't pay my kids for reading books. I want them to think of reading as a really fun thing that they look to, as entertainment, and paying them for it, I think, sends the opposite message—that it's so onerous one must be paid to do it.

    We have solved this dilemma in our house by paying our son for extra chores, things above and beyond the regular daily chores (cleaning room, taking out garbage, putting dishes away) such as pulling weeds, sweeping the porch, watering the house plants. These are not things he was great at as a 6 year old, but we let him do it as best he could in order to give him a "real" job he could get paid for.  

    Jun 8, 2017

    I have friends who have a little board posted with "optional" chore items such as weeding a particular flower bed, trash patrol in the yard, or hose out the garbage cans. They attach a dollar amount to the chore and their kids choose what they want to do knowing exactly how much they will get for the job once it is completed well. The trick is to figure out age appropriate chores for a 6 year old. These are all chores that are outside the regular expected "helping the family chores."

    Jun 9, 2017

    The problem with paying for chores is that it means you can't say, "We are a family, and we all work together." It sounds like you are already doing a great job at making chores fun. Allowance allows you to sidestep the problem of making chores within the family economic, and gives your child the chance to learn how to spend/save small amounts of money. 

    Also, there's a fair amount of research that external rewards discourage intrinsic motivation. So for getting him to read, your might want to start going to the library each week, and also talking about his reading with him which would be fun for both of you.

    Jun 10, 2017

Archived Q&A and Reviews

Questions Related Pages

Allowance for 1st grader and 4th grader

June 2009

Just wondering how much most kids are getting for their allowance these days. We give my 4th grade daughter $3/week and my 1st grade son $1.50/week. My daughter has mentioned in passing that her 12 year old cousin thinks that it's horribly mean how little she gets (her cousin mentioned it once to me in a very nice way). So I am just looking for validation - are my kid's allowance amounts way too small? Any feedback you would be willing to share is very much appreciated. Clueless Mom

Your daughter's cousin would think we're really scroogelike -- my 4th grader gets $2 a week, but half of that must go into his charity box, which can only be spent on...yes, charity. He's probably due for a small increase on his next birthday, which is approaching, but he'll still be below what you're giving your daughter.

I have a lot of reasons for keeping allowance low. The notion I hear expressed around here -- $1 for every grade or (shockingly) year of age -- seems nuts to me. Should a fourth grader really have $200 in spending money per year?

My son's $1 a week for spending money means that he gets $52 to spend per year, plus whatever he earns doing special jobs (he does pet-sitting for neighbors and can earn money from me by doing household projects like cleaning the insides of the kitchen cabinets). That means that if there's anything he wants to buy, he has to save for it or work for it, which to me is the whole point of allowance. If he can buy anything he wants, what is he learning? To be yet another mindless American consumer and I think we all know where that leads.

I want him to have to make tough choices about money -- if I buy this now, I won't be able to buy that later. And I want him to buy as little stuff as possible -- to realize that the thing he wanted very badly last week but couldn't afford, isn't actually something he still wants. That, in fact, most of the crap we want is crap we won't want in a month.

And that's my final reason for a low allowance. I don't actually want any more stuff in my house. I have to dust it, nag him about putting it away, find a place for it, and deliver it to whatever charity we're donating to when it's done. Even with my strict rules about allowance and limiting presents to real occasions (ie birthday and christmas) we still have TOO MUCH STUFF.

That's my philosophy. Stand strong! scrooge mom

We give our 13 and 16-year old kids $2/week. Much less than most of their friends. The older one earns additional $ from regular baby-sitting jobs, and the younger one earns $ occasionally. They seem to do OK, including before they were able to work for $. They use it for spending money, and we pay for all their essentials (clothing, school supplies, etc.) and give them more expensive items (like Ipods or computers) as Christmas or birthday gifts. The funny thing is that they always have money and their higher-allowance friends seem to be broke most of the time. I firmly believe that the allowance amount is not nearly as important as teaching our kids to save and use their money well. anon

Here's what we've done with our now-9yo boy. It's complicated, but has provided us with a lot of valuable and varied money lessons - ones that my parents never taught me!

Starting at 6 years old, my son got $1 per year IF he chose to save $5. Half that if he didn't. And no pressure - really! So it was a net of $1 cash for saving, and $3 cash for not saving. (Dilemma!) He almost always chose to save. He could spend cash on anything he wanted so long as it fits in the house rules. Candy-OK. Cheap toys-OK. Guns-Not OK What he learned was that not everything is worth what it costs. He learned how to bank with a teller and how rewarding it is to save. At the end of the year, we took $250 and opened an internet bank account.

At 7 he got $7 if he saved $5 $3.50 if he didn't. Same purchasing rules, but he was allowed to take out $20 for special purchases 4 times a year. He learned to consider choices carefully, and how higher interest = more money. At the end of the year, we took $150 and transferred it to the internet bank account for a total of $400 + interest!

At 8 he got $8 if he saved $5. $4 if he didn't. Everything else was the same, but we added a Charity Jar that gets $1 per week. All year we investigated different charities, and at the end of the year he decided which charity he wanted to give his $52 donation to.

At 9, he gets $9 if he saves $5. $4.50 if he doesn't. Same deal, but we're adding micro-lending into the mix.

It's been really fun and he is learning lessons that will (hopefully) serve him throughout his life. This year we start my daughter too, so it will be interesting to see how she approaches it.

This system may not be for everyone, but it has been great for us. Allowance in our household is not tied to responsibilities - responsibilities exist regardless. We see allowance as a way to teach our kids the rules of money, how to work with it and how to be financially responsible. Good luck! Motley Fool no more....

The expert suggested a dollar for every year of age. For example $ 5 per week for 5 year old seems appropriate. That's how much we've been giving to our 5 year old son. My son was filmed in CBS Money Watch segment about allowances a couple of month ago, see teh link below. I hope this will answer all your questions. http://moneywatch.bnet.com/saving-money/video/beyond-piggy-banks-a-parents-guide/283658/ Lola

Our kids 10&8 get $5 a week. One of those is for a charity fund. 2 dollars they can spend as they want and 2 dollars are put into ''savings''. The savings is for them to buy big ticket items like video games, ipods..... This is a lot of money for them. We buy b-day gifts and some extras. If we are going to the movies I will buy a candy bar for them at the store but if they want something else at the theater they must pay, if we are at Target and they say ''I want X'' they have buy it or put it on the list of things to save for. anon

I'd like to recommend a great book called ''Play the Real Life Money Game'' by Sarah Williamson. It's written for teens, but the introduction is useful in thinking through what allowances are for, and some of the activities can be scaled back for younger kids. Money is never just about money, and it's so loaded for most people. So it's always useful to look at your question from a few different angles and talk it over with different people. The great thing about giving an allowance is that it gets you (and your partner if you have one) thinking about your own feelings and experiences about money, and what you want to teach your kids. Pat

Our system has been this: each child gets $1 per year of age, but half of that is kept in a savings account by us. (My daughter, now 18, has over $3000 in that account now, which will be hers at graduation.) Initially we added a new chore with each birthday, and the kids welcomed it because of the ''raise.'' When they got older, we sort of ran out of new chores to add, but raised the allowance anyway. Now that they are in high school, I will admit their allowance is on the small end. But the eldest gets gas money for driving her and her brother to school, and they both make a lunch sometimes to save on lunch money, which I don't ding them for. It has worked for us. anne

I am a parent of adult children. So I am going back in memory 20 years and can not give specific amounts. Allowance was seen by us as a way to teach money management. We gave them enough allowance to cover, lunches, recreation activities, presents and eventually their clothing and makeup. It was not attached to chores but on some occasions they could do extra jobs to earn some doe. http://www.bankrate.com/brm/news/pf/20070206_allowance_child_age_a1.asp is an article that describes this all very well, check it out. Best to you Jim

I'm blown away by the amounts mentioned in your post, and the post awhile ago about money for baby teeth.

Just for comparison, our 1st grader gets 20 cents a week (doubled already this year). She saves it up to buy gum and other things we don't buy for her.

When she loses a tooth she gets a foreign coin which she saves in a special drawer which also has each tooth in a little colored box.

Luckily for us she's not talking with the kids who get $5/tooth etc.

The big money comes when she does extra chores, like helping weed the lawn. She can earn as much as a dollar or two, and one big day earned $8 and had great fun spending it on a new stuffie (like we didn't have enough stuffies :-)

She also gets money gifts, like $5 - $50 from her grandmothers, and the bigger amounts go into her savings account or get spent on a special toy she picks out.

I'm really curious what other kids are spending their money on? Is it that we buy everything for her or she just doesn't get as much stuff? We have lots of toys, more than she plays with routinely. The toys are gifts from us and relatives and birthday parties, and hand-me-ons.

We live in a small apartment, and the idea of having even $1.50/week more stuff seems alarming. I wouldn't want her to be buying that much candy. Where else would it go? The one thing I think she would have been buying is more clothes for dolls and so forth. We make some clothes, but her collection of dolls and clothes is far smaller than many I've seen.

She loves her stuffies the most, and is delighted with every one she is given or buys, but the 20 to 30 she has seem like plenty to me! (even though we actually have bought her 3 this past year, oh well, but she loves them so)

Looking forward to reading other answers! even more clueless mom (& dad)

I give my 6-year-old daughter $4/week, which is not tied to the performance of any chore or behavior. She is allowed to put $2 in her spending bank and then has to put $1 in savings and $1 in charity. She can't touch the savings and she can use the charity for whatever charitable cause she wants. I've heard a guideline of giving half of the child's age in dollars . . . so I guess my amount is high. But I rarely buy her anything now other than for her birthday or gift-giving holidays (Xmas, Chanukah, etc.) or clothes. In my discussions with other parents, it seems I am giving more than most parents and also that most parents make the allowance conditional. I know there are several schools of thought on this. I love that when we go to a toy store now and she wants something, I can say, ''Great! You can buy it with your allowance or put it on your wish list!'' Anon

I agree with the posters who said that allowance depends on what you hope to accomplish by giving the allowance.

Our family\x92s goal was to have our daughter be able to go away to college with a monthly allowance and have that allowance stretch through the entire month. Of course, that college experience would allow her to spend and save responsibly as an adult after college.

To get to this goal, we expected that high school would be similar to college in that she would have a monthly allowance, but that we would sit down two or three times per year to review: 1. Clothes needed. 2. Activities participated in. 3. School lunches. 4. Entertainment. This agreement would lead to a monthly allowance that she would have to make last.

To get to the high school goal, in middle school we would give a weekly allowance that would cover school lunches and entertainment. However, there would be an annual budget for school clothes shopping, school supplies shopping and camps / enrichment. We usually break this category down into camps for breaks (Thanksgiving, Winter, Spring and Summer) and enrichment throughout the school year.

For elementary school, this is where our daughter is now. She started getting an allowance in kindergarten. She received $1 per week for her age. We discussed strategies, such as long term savings, mid-term savings, short-term savings and spending. However, the money is hers. She spends it as she sees fit. In the beginning she spent her money on a lot of ''plastic crap.'' However, by age 7 she got the hang of it. She is 9 now. She saved for two years to get a Wii and Wii Fit. She earns $9 per week. She often has $50 or more in her wallet. She was given a budget for Summer Camps, chose them well, came in under budget and is attending some great programs.

She works by setting up a lemonade stand twice per year when the local school has work days. After paying for goods sold she averages about $120 or more. She also walks dogs and takes care of neighborhood animals and brings in mail as part-time jobs. In addition, she must give back to her community and volunteers a few hours per week. Allowance is formed from a combination of being part of the family in which everyone has a function and money that is unaccountable to anyone else and being a part of a larger community in which she has been given many privileges by birth and is accountable for giving back to that community.

I have no doubt that our daughter is be financially prepared for middle school, high school, college and adulthood. Mother of a Responsible 9 Year Old Daughter

Should children buy party gifts out of allowance?

March 2007

Hello All: Was wondering at what point is it appropriate to expect that children help in/with the purchasing of gifts for others. Our son receives a small allowance and occasionaly earns extra money doing added chores. He splits his money into ''savings'' and ''spending cash''. We tend to purchase most of his wants, but hope we are not over indulgent. I seem to remember that by the age of 10, I was participating in the acquisition process. My curiosity is more from the point of responsibility than finances. Answering last weeks post, we give our child $2.50/week with possible deductions. Thanks. Too cheap parent ??

With only $2.50 a week, I don't think it's yet reasonable to expect him to try to buy anything for others. It would cost him over a month's allowence for a ten-dollar gift. To simply save up to buy presents, even small ones, for Mom, Dad, and a sibling for Christmas would cost him about four months of allowence. If he had to pay for friend's birthday presents, Mother's Day/Father's Day, parents' birthdays, siblings' birthdays, etc. he would not have any money left at all, kind of defeating the purpose. Charles

Allowance for an 8-year old

Feb 2007

I just finished reading the archives and I am wondering what the current rate is for allowances for 8-10 yr olds? Also, what do they purchase with this money? We already ask our son to put 1/3 in savings. Thank you. Nancy

We give our eight year old $2/week which he mostly saves to spend on Pokemon cards. (This is not tied to any sort of chore - - it's just his money.) We also let hime earn extra cash by weeding or carwashing or similar odd jobs. If you are requiring your child to put $ in savings, you should definitely pay more, but this works for us. anon

I have been giving my children a weekly allowance, based on their age. So for each year of age, they get 50 cents. For example, an 8 year old would get $4 weekly and a 5 year old 2.50. This way they get an automatic increase each year, and the rule is very clear and concrete. Just recently I have stopped buying toys for them (they are 8 and 11 years old and our house is full.) So now they buy toys with their own money, and they really pause before they choose to get something! I am very pleased with this. trying to be a financial teaching mama

This may sound outrageous, but my 7 year old daughter receives $7.00 per week, up from $6.00 per week when she was 6 years old.

People, children and adults learn about money from having it, using it and spending it. My daughter has a savings account and is required to save $1 per week. She has also decided that she really wants an iPod. The nearly $300 type. That is not an expenditure I'm are willing to make. However, she has a Credit Union ''Dream Savings'' account and is saving for the iPod. She adds allowance, extra money she earns (taking care of neighborhood pets, washing cars, etc.) and birthday / holiday money away toward the goal. She's half way there.

I am willing to go halves on certain items, such as Healys. My daughter does the online research for the price, together we calculate the tax add it together and divide by 2.

Think of all of the money mistakes you have ever made in your life. Now imagine that you could do that on a small scale and learn from them. It was VERY difficult watching my daughter spend money on things that she didn't want after a very short time, but these are learning expericences.

About Birthday Party gifts: we set an annual amount, my daughter figures out about how many parties she will be invited to and then figures out how much she can afford to spend. She's had to skip a couple of parties - because we ran out of annual giving and she did not have the money. Lessons learned.

It all depends on what the money is meant to do: spending money alone, budgeting, planning, etc. Difficult as it may sound, it seems like it's the adult's responsibility to figure out what the goals are, then to help your child follow through. Believer in Financial Experience

I had to chime in at last on this subject because we and most of the people we know give MUCH less than what other posters say is standard. Our 7 year old gets $1 a week for himself, and $1 for his charity bank, which he can contribute to any cause of his choosing at the end of the year. When he's 8, it will go up to $1.50 or maybe $2. I feel that allowances should be small enough to teach children the value of saving, and the real cost of things. I don't want him to be able to buy everything he wants, even though he mainly wants Pokeman cards and Baseball cards. I want him to have to save for those items, and to ponder whether the five minutes pleasure he gets from purchasing them is worth a month's allowance.

$52 a year in spending money seems ample to me for a seven year old!

He also has the option of doing extra chores in order to earn extra money -- I pay a dollar an hour for things like working in the garden.

I rarely buy things for myself -- we are not well-off, and I believe we have what we need and should be thankful for that. So my allowance philosophy reflects my general bias against consumption, I suppose. nelly

Allowance for an 8-year old

Nov 2002

We'd like to hear of other's experience with giving your kids an allowance. Our eight yr son has been asking lately. We're not sure of the amount, or what responsibilities he needs to take on in return for an allowance. Thanks.

I don't tie in my daughter's allowance to household chores or grades. She does chores because she's a member of the household, and is expected to do her homework and get reasonable grades because that is her work. She gets money so that she can (gradually) learn how to use it with some degree of thought and responsibility. Our system for the last several years has been to give her a set amount, plus $1, every week. (Every two weeks now that she's older.) Half of the set amount is hers to spend as she pleases, as long as what she buys is safe and healthy. (This means not spending all of it on candy every week.) The other half she gives to me to keep for her; this is her savings and she must hold on to it for at least a few months to put toward something major/majorish. The extra dollar is for a good cause--usually ends up being given to the Humane Society or something to do with animals.

This is obviously quite a structured system which would not necessarily suit all temperaments. It works for my daughter; now 13, she's become a very good saver, especially now that she's babysitting and has realized she can actually accumulate quite of a lot of money that way.

8 years old? As I recall, our kid got a dollar or two a week, plus some good-cause money.

(By the way, don't be fooled by talk of other kids whose parents give them LOTS of money and NEVER make them save ANY of it. When my daughter tried that one on us for the fourth time, I called all of her friends' parents, asked about their allowance systems, and found that virtually all of them had to save some money and that the ones with big allowances were having to buy birthday gifts and stuff with it. You might try calling your son's friends' parents to check the going rate for an 8-year- old's allowance.) Regards, Melanie

Allowance for a 6yr old Kindergartner

Sept 2005

I would like to start an allowance system for my 6 year old son. He's developmentally mature for his age, articulate and now understands the power of money (can buy toys, or save it). I would like to come up with an allowance system that incorporates the following: 1) incentives for good behaviour 2) incentives for household chores (small things like helping set the table now, to bigger things like taking out the garbage, mowing the grass etc. as he gets older and into his teens). 3) creates an incentive to save for BOTH short term needs (e.g. a puzzle or toy he may want) and long term needs (e.g. college). He somehow already thinks/knows that he must help save money for his college education, and he is fully aware that he is expected to go to college. I thought I would work in a way to match any funds he puts away for college to increase the incentive to save. 4) Allows him to manage his own money in a thoughtful way - learn from his mistakes and bask in any glory it may bring him. 5) introduce the banking system to him, which means that when his money moves out of his ''money safe'' and into a bank account we can help him learn about where his money goes, loans, interest accrued, greed (had to throw that one in), etc.

Then what happens to my 3 year old who would also want to participate? I would not want him to feel left out, but clearly he's a bit too young for a ''full'' allowance scheme.

That being said, how do I start? Any helpful hints? Anything you've learned over the past few years now that you have older children? Everyone I know has young children, and they have not started an allowance scheme yet. Thank you for any thoughts. Allowance mom

Re. Allowance for your first grader.

That's when we started our daughter, in first grade.

I think it's important that allowance and ''chores'' be separate -- ie not dependent upon one another. Chores are part of their responsibility as a family member.

Tell the 3 yr old he/she, too, will have allowance start when he/she is in first grade. Leave it at that.

We have had great success having our daughter split her allowance into a ''savings'' bank, that she used for long term purchases for family members, ie brother's birthday; ''offering'' bank, that she donates at the end of the year; and ''spending'' (''S.O.S.'') that she can spend as she chooses. She's taken tremendous pride in making a recent donation from her ''offering'' bank to the Katrina victims and using her ''savings'' for a brother's birthday present. dh

Allowance for a first grader

March 2004

My first grade son would like to receive an allowance. We have discussed the pros and cons, and I think we will probably end up giving him one. If anyone would like to share the specific amount they give their first grader per week, I would be most appreciative. An excellent 1999 post in the archives lists average allowance amounts by age, but more recent information would be useful. Autumn

Hi, My first grader gets $4 a week. He then splits it up into a saving, spending, and charity bank, in an idea that I think came from here. He like putting his saving money in the bank, and usually enjoys going to Glide to donate to homeless programs. I also let him earn extra money for various chores. kean

We've used a system for many years that we started at about first or second grade. I think it works very well. Each child gets an allowance of $1 per year of age, but 1/2 of that goes into savings for them. At each birthday, they get a new chore, or some extension of a chore, to merit their larger allowance and new capacities. I can't say these have always been easy to come up with. Some year's we really haven't increased the chores, only to make a jump up the next. Both kids now do their own laundry, for instance, which makes a real difference! (though I still remind.)

I can't say I've always been thrilled with how they spend their money, but I have to remind myself that my role is just advisory (although of course they cannot use it to buy things they aren't allowed to have.) They've both, in different ways, had the experience of wishing they hadn't spent their money in some way, and we've talked about it, and I think that's been very valuable.

Now that they are older (oldest is 7th grade) they ask about the savings sometimes. We've made it clear that those are to be spent with our approval, generally for college expenses. anne

We started our 6 year old with 1/2 of her age as an allowance. Her allowance is NOT based upon certain jobs, because she does those types of chores as being part of our family (i.e. make her bed, room tidy, feeding dog, emptying trashcans, etc.) She can then get extra money for doing additional tasks as she wants. Also when we started her allowance, we divided the money into 2 banks, one for short term purchases and the other was long term savings which we took to the bank every month. She enjoys going to the bank and giving them her dollars and coins and is now very interested in how the whole money thing works. Kat

an allowance is a great way to teach budgeting and fiscal responsibility (god knows there and many adults who have to suffer before learning such basics and many who simle never learn). my brother and I both were given allowances - it becomes much more important in the teen years and we are both the same about money - we have minimal debt, no credit card debt and are very fiscally independent and good with budgeting. I suggest that you agree with your first grader what specifically this allowance will cover - candy and snacks on outings or new toys, film for their camera if they have one batteries for their toys. agree on an amount I think I got $5 a week when they started with me in the 4th grade. put it in writing and sign it(both of you). then stick to it. if more is needed for whatever reason, the child must pay the borrowed amount with the next allowance (I don't think I was given the opportunity to go into debt until I was 12 and started running up the phone bill) good luck!

Allowance for a 10-year old

Jan 2005

I'd like advice on how much monthly allowance to give a ten year old (the info. in the archives is about 5 years old). My daughter will not be paying for any clothes, but will be expected to buy presents for friends' birthdays, etc. We won't tie the amount to doing anything other than normal chores, but we expect her to keep good grades. She has a savings account and has been very responsible about figuring out how much to spend and how much to save. Thanks! Charlotte

Hi-- Ah... i remember when my parents gave us allowances! What an interesting introduction to responsibility and finance. My suggestion, seeing as my mom gave me 25 a day ($1.75 a week) and had me put 75 into a piggy bank to learn to save.... how bout a dollar a day. That seems fair. By the end of the week she'll have $7 and she can put some away into her savings. And maybe as an incentive she can earn bonuses for extra good work & grades, extra chores & help, etc... Have fun! alena

In decididng on an allowance amount, we think about it this way: If we didn't give an allowance, and just decided whether to pay for things when asked, how much and what whould we be willing to pay for? Snacks? Books? Lip gloss (if she's into ! that yet)? toys? movies with friens? Then, add up about how much that would be for perhaps six months, and divide it by the number of payments. You might decide that you'll still pay for school book-club books, for example, but she has to pay for other discretionalry items. Perhaps you'll pay for one outing (movie) per month, but hte restis up to her. I might not expect her to pay for all of her friend's gifts yet, though, because she can't predict how many parties she'll be invited to - maybe she'll make a new friend or two, and then not have enough to get them gifts. We try to review this every couple of years (our kids remind us!) as both expenses and expectations change. We generally opt to give a relatively small allowance (compared to some others), but always give the kids the ooprtunity to EARN more by doing extra chores at home (we don't have any expectations at all to get the ''base rate'' allowance, s! ince we figure some of the household money will be spent on them anyway). R.K.

I work at a foster family agency and our guidelines about allowance go as follows: $5-elementary school age, $10-middle school age, $15-highschool age. This is per week. We also recommend giving extra as reward for doing extra chores or other desirable behavior. All the best, Sarah

Our daughter's allowance is tied to her grade in school; as a sophmore in high school, she receives $10.00 per week: $5 for spending money and $5 to be saved. (She also now gets to keep all of her babysitting money and use it at her discretion.) In 11th grade, she'll get $11 a week, etc. We also give her a $5 per diem for her summer camp counselor-in-training time, which she receives in a chunk before school starts; that's for buying school supplies, clothes, etc. Melanie

I have heard of 50 cents per year of age, so that would be $5 a week for a 10 year old. However, when I thought of that for my 9 year old, I thought it would cover his own toy purchases only. I am intrigued by the idea of his having a budget for buying gifts, it will give him more opportunities for managing his money, however birthdays are so sporadic (1 this month, 4 next month), I think it would be hard to cover the cost in a monthly allowance. Maybe a separate present fund would work. I am also curious what other things families might have their pre-teens paying for. Clothes? eve

General Advice

From: Lucy (2/99)

In a recent issue, Consumer Reports listed some average weekly allowances based on a survey they conducted. 8 and 9 year olds got $3.74, 10 and 11 year olds got $5.19, 12 and 13 year olds got $6.66 and 14 yearolds got $9.45 a week. My stepchildren (15 and 11) do not receive this much and I was wondering how otherfolks compare with these averages. A related question is about the going rates for jobs such as babysitting (we have a 15 month old), yardwork, and car washing. The older kids have expressed an interest in more opportunities for paying jobs, butwe're not sure how much to pay them.

From: Jum (2/99)

Re allowances, my two boys are also below the consumer reports averages you quoted. They get $0.25/week for every year of their age (eg 8 year old gets $2). This seems to work, and the best part is that there is no conflict between the 8 year old and the 6 year old. The younger knows why he gets less, and knows that he will get more when it comes his turn.

From: Kathleen (8/98)

There was an article in Harper's or the Atlantic recently that added a great-sounding twist to allowances. The parents set up a virtual bank their kids could deposit their allowances in. The bank pays 5% interest per month (not per year, kids wouldn't have the patience). The kids can deposit any money they earn through babysitting and other jobs into the bank. They can withdraw money when they want and spend their money however they want. Of course 5% interest per month gets costly once the virtual bank balance is very large, so money above a certain level is invested in virtual stocks that the kids choose -- starting, let's say, with one share of Coca-Cola.

The upshot is that the kids have a real incentive to save, and therefore think very carefully about purchases and don't buy stuff they lose interest in the next day. The author says his kids have a lot of fun with the system, and he felt you could start them at an early age because the concepts aren't that complex.