How to manage chores and allowance for kids, without going crazy!

Coins cascaded out of his piggy bank and rolled across the floor. “I’m going to count my money” Noah announced.

This is his favourite thing to do. I think he enjoys counting his money way more than spending it.

As he began tallying up the neat stacks of coins and piles of notes, my eyes started to boggle.

“427 dollars and 65 cents” he announced.

What? How does my 7 year old have $427 (and 65 cents)?? He only gets $2.50 a week allowance/pocket money!

Noah loves money, I think a lot of kids around this age do. Money is interesting, and powerful, and having some opens up a whole new world!

Teaching your kids how to manage money is an important life skill, but working out how best to manage chores and allowance with kids is not always easy.

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So you want to teach your kids about money.

You don’t want them to be ‘entitled’, or to think that money grows on trees. You want them to learn the value of money, of working hard, and earning the reward, and you want them to have good money habits for the future.

So you decide to give them some ‘pocket money’, an allowance. Making that decision is the easy part, figuring out how the best way to manage it can drive you crazy!

Giving your kids an allowance is a great learning experience, and just as every family is unique, the way you choose to manage pocket money with your kids will vary. There is no one right way to do this, but it does pay to think things through before you begin.

Here are a few things we considered (or wish we’d considered) when we started giving our kids pocket money, and some thoughts on how and why we chose to deal with it in our family.

Things to think about when it comes to chores and allowance for kids.

Why should kids be given an allowance?

• An allowance helps kids to learn about what money is, how it works, how you can earn it, and how to use it.
• It lets them practice a variety of maths skills.
• Kids learn about making choices, about identifying things they need vs things they want.
• They learn to compare items and information when shopping to make a good choice.
• They learn the social conventions of buying things.
• It introduces the concepts of saving and goals, budgeting, investing and lots of other financial life skills.

What age do you start giving allowance?

Common advice is to start giving kids an allowance when they are old enough to understand the concept of money, and when they can count to ten – so, around 4- 5 years old. If you have multiple kids you might set an age when allowance starts. Or you might just start giving pocket money to the younger kids when they are old enough to realise their siblings are getting something the are not!

Our youngest child was around 2 and a half when he started getting pocket money. He wanted what the older kids were getting, and that seemed like a reasonable request.

If you are giving allowance to young children, make sure you store it safely as coins are a choking hazard. A sturdy money box that cannot be opened and that is kept out of reach is a good option.

Paid chores vs unpaid chores.

Should allowance be tied to doing chores?

In our house getting pocket money and doing chores are two entirely separate things. In our house we have unpaid chores and paid chores.

Our kids get an allowance each week as a way for them to learn about managing money, and to practice life skills such as decision making, budgeting, and how to go to a shop and buy things. Teaching kids about money and having real life, hands on, experience with money is a great way to learn.

We believe all family members contribute to the running of the household. Helping around the house and looking after your own belongings are things we all do because we are part of this family, they are not things we are paid for. Our kids are expected to do a range of chores such as emptying the dishwasher, putting away laundry, taking care of pets, helping make dinner etc. They do these jobs because they are part of our family.

Also, our kids don’t loose pocket money for not doing their family jobs (there are other consequences for that).

There is also value in working hard to earn something you want. So to balance the two ideas our kids have unpaid chores, and paid chores.

We offer our kids ‘money jobs’. These chores are typically things that are beyond regular family jobs, often things that I don’t really want to do myself! How much they earn is tied to how long the job will take, or how difficult it is. We usually offer a few different jobs each weekend, and try to make sure there is something on offer that suits each of our children and their various ages and capabilities.

These paid chores are things our kids can choose to do, or not do, there is no obligation, so we need to be prepared for them not to be done! They are things like – cleaning the windows (I hate doing that job!), cleaning the baseboards, mucking out the chook house, weeding the garden etc.

If you want to offer your kids unpaid chores and paid chores these printable chore cards are a great way to get started.

How much allowance money should kids get?

Some people use the ‘1 dollar for every year of age’ rule, but considering things cost the same amount whether you are 3 or 13, we don’t subscribe to that rule. Our kids get a fairly small amount of pocket money – $2.50 a week. There are a few things we took into account when coming up with that amount.

How much can we afford? – We have four kids and we simply don’t have room in the budget to be giving them $10 a week each.

What are they expected to pay for? – Our kids use their pocket money for whatever they want. They are not expected to use it to pay for any essentials, or regular expenses. Since our kids are allowed to buy whatever they want, we don’t want them to have a large amount of money they could spend on loading up on junk! Even if they spend their whole allowance on junk food, because it is such a small amount, we can live with that.

Are you are open to negotiating rises? – Our kids started out with $2 a week and negotiated a 50 cent pay rise after a few years. The whole negotiation process was a great learning opportunity and we are glad we built in room for this kind of stuff.

Should kids do ‘give – spend – save’?

The concepts of saving and giving are important. Teaching kids how to budget, and explaining the idea of saving, spending and sharing a percentage of their ‘income’ willsset them up for good financial literacy in years to come.

These are things we actively teach our kids, but since our kids only get a small amount of allowance, there are no rules about what they do with that money.

I think modelling these values, and making it easy for the kids to put these ideas into action are the best ways to teach them. So each child has a bank account that they can deposit savings into, and we have a family ‘giving jar’ that we all contribute loose change to and then decide on a charity to give to at the end of the year. You might find setting up a system like these ‘spend save share’ piggybank, works well for your kids.

How do you handle chores, allowance, money, and kids in your family?

How do you decide if or when to give an allowance?
How much do your kids get?
Are their any guidelines about spending it?

Leave a comment below and share how you manage chores, allowance, money and kids!