They’re the age-old questions for families: Should kids get an allowance and how do you decide how much to give? While each family needs to decide what works best for them, here is some advice and common rules-of-thumb to help you.
Should children get an allowance?
If you decide to give an allowance, an emerging practice is to not tie it to chores. Contrary to the prevailing understanding that money paid for work done is the best way to teach children about the relationship between working and earning an income, many family experts are now advising parents to scrap this way of thinking. Running the household should be a family affair, they say, with everyone pitching in without expectation of payment.
Sometimes that’s easier said than done, and many parents still find the promise of money the surest way to get their children to make the bed and do the dishes.
Still other parents choose not to give an allowance at all, and simply provide a reasonable amount of money on an as-needed basis.
At what age should my children start getting an allowance?
Having some pocket change teaches children about the value of money, the consequences of overspending, and the importance of budgeting. Even very young children can start learning how to delay their gratification (I want some candy today) for a future reward (I want a toy that I’ll have to save up for).
Kids below a certain age don’t yet understand that money is valuable… Consider delaying an allowance until you see that your child understands this concept.
However, kids below a certain age don’t yet understand that money is valuable and that it can be exchanged for things they want. Consider delaying an allowance until you see that your child understands this concept. For example, do they misplace, lose, or give little thought to money? When offered the choice between a toonie and a $20 bill, do they choose the toonie because it’s shiny and more interesting than paper money? These are signs that your youngster isn’t ready for an allowance.
How much should I give and how often?
A common rule-of-thumb is to give each child 50 cents to $1 for every year of their age. This means that a 10-year-old would get $5 to $10. Many families dole out allowances weekly, but you could also choose to do them on a monthly basis. It’s important to stay consistent, so whatever you decide, make sure that, above all, it fits into your family’s budget.
Remember that a strong financial plan isn’t just about your investments. It starts with a strong foundation of day-to-day spending and saving.
We asked some Canadian families about their approach to allowance. Here’s what they had to say.
“We don’t do allowances. It’s too hard to stay consistent, so we just give the kids money when they want to buy a Slurpee or go to a movie with their friends.” – Jillian, mother of two children aged 12 and 14
“Rachel gets a 75-cent raise every year on her birthday. She currently gets $3 a week. My only rule is that one-third goes to savings, one-third goes to a donation, and one-third becomes her pocket money.” – Leanne, mother of Rachel, age 7
“We give a flat rate of $1 for each year. The 15-year-old is now getting $15 a week. It’s not related to their chores, but we will give a ‘bonus’ for bigger projects like helping me stain the deck.” – Andy, father of four children, aged 15, 13, 10 and 9