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Teach Kids Money: Tying Chores & Allowances

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Coins in a JarThis is a guest post by Danny Kofke, a special education teacher and author of How to Survive (and Perhaps Thrive) on a Teacher’s Salary. Danny and I have been emailing back and forth for the better part of the last month or two, working on a guest post about children and allowances. I asked Danny to write this post because it involves a hotly debated topic in parenting – should you tie your kid’s allowance to their chores? Or should they do chores “for free” because they are part of the family? Here’s his take.

My wife, Tracy, is a stay-at-home mom to my two young daughters – Ava, age 5 and Ella, 2. We don’t make a large salary so we have to be frugal with our money. We are trying to pass on our values to our children. Ava gets an allowance every week for the chores she does. We check each chore off on a daily basis and at the end of the week Ava gets paid for doing these chores.

I decided to pay Ava for her chores since this is work she has to do in order to get paid. We actually refer to her allowance as commission since, like a commission, she gets paid for work she does. I use allowance in this story because most are familiar with that term. Most people get paid for work that they complete. I feel that having Ava do some work, albeit minimal work at this point in time, to earn money will help her develop an understanding that work leads to getting rewarded with money. I am lucky enough to drive her to school everyday (she attends the same school where I teach) and she knows I go to work and get paid for teaching my students. I tell her that she gets paid for her jobs too and wanted to demonstrate this with an easy to use chore chart.

Setting Allowances

We have decided to start off small with the amount we give Ava each week. Right now it is $1.00. As she gets older and does actual work that is above and beyond what she should do, we will increase the amount she gets.

The chores she does right now are basic ones (cleaning her room, using good manners, brushing her teeth, etc.) that are expected off her. My goal with her allowance at this point is not to reward her for doing things that she should do but, rather, to teach her about handling money. I know her chores are easy for her to do and I want it to be that way. I want her to be able to accomplish all of them so I can have a teachable moment with her every week when she gets paid. When she gets a little older, and the money management tools I am teaching her now are hopefully ingrained in her, more will be expected of her to earn this money.

Savings, Give Away, and Spending Jars

Ava has three jars:

  1. Savings
  2. Give Away
  3. Spending

When she’s paid, Ava puts some of the money in the Give Away container first, then Savings and finally Spending (she knows the correct order and this is very important). I feel that by doing this she will continue this practice later in life.

If Ava wants something at the store, now that she’s five this seems to happen more often, Tracy and I tell her we have to go home and look in her Spending jar to see if she has enough to buy it. We use her Savings jar to save up for items that might cost a little more money. Ava has used the money in her Give Away jar to buy a present for a student at my school who lost her father and for a canned food drive at our church.

A few months ago she said something that made me so happy. After putting money into each container she said that she had enough money in her Spending and Savings containers and wanted to get more in her Give Away so she could buy a ball for her 2 year-old sister, Ella. I was so proud of her. She is now of the age that she has started to notice that some of her friends have more materialistic things than she does. We explain as best we can to her why this is so but it definitely made me feel good to hear her say that she wanted more money to give something away rather than buy for herself.

I feel that my 5-year old knows more about how to handle money than people many years older than she is. If Ava continues to follow these three simple steps upon getting paid throughout her life, I have little doubt that she will be financially successful.

What are your thoughts on tying chores with allowances and setting up money jars?

(Photo: minidriver)

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10 Responses to “Teach Kids Money: Tying Chores & Allowances”

  1. zapeta says:

    When I have kids, I plan on giving them an allowance so they can learn about handling money but I’m not going to tie it to chores they are expected to do. I don’t want them to think they can get out of their chores if they don’t care about the money. In addition, I’d want to be able to take away the allowance if necessary and not have to explain why they still need to do their chores.

  2. Joy says:

    I agree with the comment above. While Danny’s argument is well thought out and his budgeting values are solid, there is the very real possibility that he may be teaching his children to work only when they are paid. There may come a time when he can’t pay them for work they need to do to contribute to the family’s well-being and they may not feel motivated to do it. As they grow more independent and, as teens, perhaps earn their own money, they may feel that they don’t have to do the routine chores of home since they don’t need the allowance. Chores are part of a commitment to family life, everyone participates, everyone works, everyone benefits. Danny probably doesn’t get paid for taking out the trash, either. Some stuff you just do because it is expected.

  3. Honey says:

    To deal with the valid issues raised in the previous comments, as children get older you can start “charging” them for the things that you provide (food, shelter, etc.) and arrange the math so that if the chores are done, there is a surplus (allowance) and if the chores are not done, there is a deficit (bill).

    Then not only is the child learning how to handle money responsibly, s/he’s learning that these things do not come for free.

  4. I think the Give, Save and Spend banks are an excellent approach. There are values that can be taught within each area that are essential to managing money wisely. Personally, I think it’s a good idea to pay a child for work or chores performed around the house. The value of working to earn is important for a child to understand, mainly as they mature, but helpful to learn early.

    I really enjoyed your post and am looking forward to starting my Ava :) on the G,S,S banks as she turns 5 this next year.

  5. Dr. Jimmy says:

    An allowance is given because the child doesn’t work. He is dependent on the parent for his basic needs and more importantly his dignity. It should never be tied to chores or any other performance. It is freely granted the child regardless of his behavior.

    Teaching the priniciples of saving or giving can be easily taught using the money included in an unconditional allowance just like it can using money the child earns by doing jobs that are above and beyond daily chores. Chores instill family values and responsibility and should never be tied to money.

    If a child has an allowance and he learns to manage it correctly he will never be embarrassed when his friends stop in front of a snack machine by not having some money on him. He also learns that he can have extra money if he’s willing to work for it, over and above his responsibilities to the family.

    Every parent I have given this advice to has offered very positive outcomes reporting that their child’s self-esteem had grown along with their empathy for others.

  6. Patrick says:

    A lot of what people know are based off of what our parents taught us. My parents lived frugal and I live in a similar manner. This is not always the case, but more likely than not they will at least learn small money lessons like these.

  7. lee l says:

    We have a 9 yr old and a nearly 4 year old.
    Recently we have started to tie “jobs” around the house to pocket money (as we call it in Australia), as a way to teach our 9 yr old daughter to value the money and to be more thoughtful with how she spends it, as we were finding she was being quite friviolous with spening money she was just “given”. It is amazing the difference in her attitude when it comes to spending her own money that she had to do some work to get!
    We also do a “split” on her money in that she has two money boxes, one to go into her savings account and then one she has easy access to for spending. She also donates money for fundraisers at her school.
    Let me say though that I purchase all my daughters clothes, school supplies, and everything else she needs – but if she wants something over and beyond she is required to use her own money. It is amazing the extra though she puts into deciding to buy!
    BUT she is also required to do jobs that are not linked at all to pocket money, and it is amazing that since chaning our system slightly to encourage her earning her pocket money, she is displaying more responsibility in her general behaviour and doing things on initiative as well (“unpaid”) – which is wonderful to see!

  8. lchadder says:

    Allotting chores to kids, according to their age, makes them responsible, and also teaches them the value of time and money at a very young age.
    My kids are 7 and 3. When it came to chores, I just browsed the net and found some chore charts (my kids liked the designs in the website kidrewardzone). We filled up the chores and columns to mark a star in each chore. There is a minus for each negative behavior, like tantrums, not using dustbins for trash, and so on. They would get bucks for each star minus each negative mark. A trip to the park on Saturday, if BOTH get all the stars (here I don’t count the negatives)for the week. Now, there are no arguments, yelling, and shouting. Its only “YAAAAYYY…”

  9. jeff says:

    Teach your kids some real economics. They work for some money that is printed with no real backing and out of thin air. They pay back the lender at interest on tax day. The lender reduces the value of their earned income then loans them back more money that is worth less and they work harder for less of it.

    Some kids figure it out and just deal drugs for cash or go try to make a quick buck on Wall Street.

  10. jeff says:

    Am I wrong here?


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