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Writer's pictureKristal Melbye

Allowance Logistics: Setting Up an Allowance System for Your Family

Updated: May 5, 2019

Parents often ask how to introduce allowance to their kids if they’re not linking it to chores. It’s hard for parents to wrap their mind around “just giving their kids money for nothing.” I understand that. And, as I said last time, I definitely think kids should be contributing to the household. I just don’t think the kids should get paid for doing this work.


We’ll cover chores next time, but don't worry, kids will be working. (If your kids aren’t already helping out around the house, it may be best to address that before you start an allowance.) But, please resist the urge to link these two things, because, as you’ll see next time, that will negate the positive effects that completing unpaid chores can have on kids.


If you are ready to start giving your kids an allowance, you can present it like, “Mom and Dad sometimes save up money and get to buy things that we want, so we want you to have that same opportunity. You’ll get $__ each week, and you can spend it as you’d like. This is a good way for you to practice how to best spend money.”


As you think about starting a system of allowance, you’ll first want to decide how much allowance to give your kids. This will vary greatly by family. Ideally, you want to choose an amount that is enough that your child can save up to get things he wants in a reasonable amount of time. But, you don’t want to make it too easy to get, either. Think of something your child might be hoping to buy. Maybe it’s $20. If you gave him only $1.50/week, that would take him fourteen weeks. Fourteen weeks is an eternity to a young child. But on the other side if you give him $10/week and he buys something and doesn’t like it, it’s no big deal. He’ll have $20 more in just two weeks, so he won’t learn a lesson about making a poor choice about how to spend his money. It’s a matter of finding a balance. One thing that often works well for families when first giving allowance is starting the child out with a chunk of money, like $10 or $20 (you can call it back-allowance), and then giving a smaller weekly amount.


Another thing to consider when choosing an amount is what you’ll be requiring your child to buy for themselves. In our household, we pay for all our kids needs (clothes, toiletries, food). They only have to buy themselves “wants” or needs that we think could be met less expensively. For example, Kate needed new shoes. I found a nice pair for $25, but she really wanted a $35 pair. So she paid the $10 difference. We also pay their way when we go on family outings. If we go to the movies, for instance, we’ll pay for the kids’ tickets.


Other families I know require their kids to buy their own clothes and toiletries, pay their own way at fun events, and use their money to buy birthday presents for their friends. If you go this route, then you will, of course, need to give your child a larger allowance.

Once you’ve decided on an amount, you’ll want to decide on a system. You could simply give them the decided amount every week. Alternatively, you could try to add in other lessons. At our house, in an effort to prepare my kids for when they start real jobs, I take out taxes. I tell them I put this toward paying the utilities, just like the government takes money to help build roads.


And to get them in the habit of doing so, we also set aside some money off the top to be saved and some to go toward charity. To make it simpler, each child has a jar that they put this money into. Then every few months, the kids and I deposit the money from the "Save" jar into a college account. They choose a charity they feel passionate about to which to donate the money from their "Charity" jar.


Here are a couple photos of how we have best made things work at our house.


The first picture is of two of the kids allowance sheets. The sheets help me remember what to give each child, and they also help the kids know how much to give back for taxes and how much to put in each jar.  For the younger kids, I use pictures to make it more concrete.  


The second picture is of one of the kid's "Save" and "Charity" jars.  

Behind it is the box I use to hold the jars and keep a stash of small bills

and change to use for allowance.

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