Money management is a skill that is critically important for successful adulthood. Children are very rarely taught about finances in school so parents need to start addressing this at home as early as possible. Paying your children an allowance can help to teach them about work ethic, budgeting, and responsible spending.
Some families operate under the thought that chores are required for all members and do not deserve the payment of allowance, while others choose to provide children with an unconditional allowance or provide money when requested without requiring chores. Most commonly, families provide a set amount of money each week in exchange for completion of a specific jobs. Neale’s Allowance System suggests that the maximum benefit may come from combining required unpaid chores with additional jobs that can be done to earn income. Basic responsibilities include things like brushing your teeth and hanging up wet towels. Other chores can be based on your household needs and the pay should depend on difficulty.
How Much Should I Pay?
Paying your children too little will minimize the value of their work and take away their incentive to complete chores. If it’s financially feasible, a good rule of thumb is to start with fifty cents to a dollar a week per year of age. This means that a five-year-old would earn about five dollars a week while a ten-year-old would be paid ten dollars a week.
When determining allowance amount, you should also consider the expenses that your children will be required to pay for. If they are expected to pay for their own school lunches, entertainment expenses, or clothing then their allowance will need to be enough to reasonably cover it. It’s a good idea to make sure that your child clearly understands which expenses will be his responsibility to avoid any conflict. Ideally the money your child earns should be for discretionary spending and not for necessary items like groceries or household expenses.
You may also consider non-monetary rewards for the successful completion of chores. Ideally, this wouldn’t be an object but rather the opportunity to do something fun like a trip to the park or family movie night.
When Should Children Start Doing Chores?
Children of all ages can begin to learn responsibility by completing age-appropriate chores. Children develop at different paces, so make sure that your child is capable of completing the assigned job. Watch carefully and be sure to praise your child while the work is being done. Remember that you are trying to teach valuable lessons that are much more important than a perfectly completed chore.
What Other Things Should Be Considered?
It is recommended that you teach your children additional responsibility by requiring them to apply a certain percentage of their allowance to savings. Depending on your family values, you may also suggest that a portion goes towards a charity of their choice. Having your children track their spending will also help them to learn from their decisions and make good financial decisions.