Pay for Not-Play?
August 21, 2012 1:33 PM   Subscribe

Should my kids have to do their chores in order to earn their allowances? We are going to start paying allowances to the two oldest of our children. They will be allowed to spend only some of the money and will have to save a portion and donate a portion (we'll give them each four charities to choose from at the end of the year). However, my wife and I can't decide whether the kids should be required to complete their chores in order to earn their allowances.

On the one hand, it would be good if they had an additional incentive to finish their chores (the chores are pretty minor right now) and they could learn that work is how you earn money. On the other hand, maybe the kids should learn that the family is a unit and we all pitch in and make the household run without any expectation of a short-term reward. Also, it could be hard to consistently administer a system in which we dock them for failing to complete all their chores.

Parents, children, and former children, what has worked for you? What do you think works the best?
posted by Area Man to Work & Money (42 answers total) 27 users marked this as a favorite
The best solution I know is to give them half their allowance as a definite pay packet. Then they earn the rest if they do the chores you'd like them to do. Which means they always have some money to learn about the value of money and their self worth is reinforced, but you've got wriggle room if you need to punish them. (Which hopefully won't happen, but being realistic, it usually happens to most kids. )
posted by taff at 1:38 PM on August 21, 2012 [3 favorites]

Well, one way of getting the best of both worlds is to have some chores that they just do, because everyone works at stuff, and to have some of their allowance be something they get, no matter what, because part of getting older is learning how to manage money. Then you can have some tasks that they could do to earn some money. You don't mention how old your children are, which might be useful to know.
posted by bardophile at 1:39 PM on August 21, 2012 [11 favorites]

My allowance wasn't strictly premised on anything in particular - that is, I wasn't paid $7 for mowing the lawn and $5 for vacuuming and so on. But my allowance did require completion of chores - that is, I didn't get any cash until I'd done all my chores, but the number of chores and the number of dollars weren't directly tied to one another.
posted by Tomorrowful at 1:39 PM on August 21, 2012 [10 favorites]

We had a setup where we'd get an allowance that wasn't related to chores, but there were some chores that you could get EXTRA money for, like mowing the lawn and cooking dinner.
posted by showbiz_liz at 1:39 PM on August 21, 2012 [7 favorites]

Right now, my niece gets an allowance simply to learn about money and how to spend it. Plus, we found that if she had her own money to spend, she was far more careful about spending it than she was about asking us!

However, I agree with bardophile and showbiz_liz - I think it would be great if there were extra chores that could be done for additional money.
posted by needlegrrl at 1:42 PM on August 21, 2012 [1 favorite]

I always think it's weird when you pay kids to do normal chores. I feel like allowances should be mainly an exercise in handling money first and foremost, and not directly tied to specific chores. Not to say the allowance should be taken away if chores are shirked, but largely it should be a lesson in handling a steady income.
posted by Garm at 1:44 PM on August 21, 2012 [1 favorite]

I had a guaranteed portion, and I could earn extra if I wanted to. I'd ask what I could do and someone would tell me I could have 5 bucks for mowing the lawn or whatever. The saving mechanism worked in that I had to save up if I wanted certain things, and I had no charity requirement. Your system seems awfully byzantine to me.
posted by cmoj at 1:44 PM on August 21, 2012 [4 favorites]

Yep, we are set up like bardophile. Standard rate, more if they do extras regularly, spot bonus for random jobs (weeding garden, hauling leaves).

Raises come around birthday time but are contingent on picking up a new regular chore, such as laundry or dishes or trash or recycling.
posted by tilde at 1:45 PM on August 21, 2012 [1 favorite]

My brother and I didn't get an allowance. (We also didn't really have chores--neither of us loaded the dishwasher the way my dad liked it to be loaded, and my parents figured we were too stupid to do laundry, but that's another story.) We did, however, get money for doing specific tasks. Paint (specific detail thing, not the whole thing) the house, get some money. Weed the yard, get some money. Help haul trash to the dump, get some money. Both of us started working (not formal jobs, but babysitting or doing odd jobs for neighbors) for money at early ages. Money was something that you earned, and not something that you just got.

I realize that different families have different expectations, but I really, really don't like the idea of a guaranteed allowance. Money management is an important skill, but they can do that with the money they get on birthdays and holidays and earn in other ways.

Something you could do is come up with a family job board...a list of special tasks outside of their expected chores that they can do for cash if they're interested.
posted by phunniemee at 1:46 PM on August 21, 2012 [5 favorites]

Our philosophy is this:

You do chores because you're a member of this family and we all have appropriate responsibilities. Not doing chores can result in loss of privileges.

You get an allowance because you're a participating member of this family and deserve a dividend, but by not participating you risk losing that dividend. I generally don't have to go there, my kids are more motivated by the immediate potential of missing out on activities or screen time.

I offer additional tasks for set dollar amounts, especially near the holidays or when someone is saving up for a particular item.

We make them bank half their allowance each month, not that you asked.
posted by padraigin at 1:46 PM on August 21, 2012 [13 favorites]

In my house, chores were completed because that's part of being a family/household - and at about 8 years old some of the chores included bigger things like helping to paint a room, doing some laundry (towels), cleaning the bathroom. The allowance was separate. We were encouraged to save and had personal bank accounts that we participated in opening. I'm somewhat of an underspender now, but I'm not sure how much of that is due to my parents (and I consider it better than being an overspender). I have good money habits.
posted by valeries at 1:47 PM on August 21, 2012 [1 favorite]

My mother always gave us a short list at the beginning of the week of about 6 pretty simple things on it, and each one had a certain cash amount attached to it. The harder or more time consuming, the higher the amount. We HAD to complete at least half the list. At the end of the week, we were given our total, but then had to pay "taxes" and a portion of it was taken away, I assume to teach us how the real world worked. Then our "taxes" were donated to a local charity of our choice. It was a really smart and innovative thing for them to do.
posted by AbsolutelyHonest at 1:47 PM on August 21, 2012 [11 favorites]

On the other hand, maybe the kids should learn that the family is a unit and we all pitch in and make the household run without any expectation of a short-term reward.

I think this is really important. I think it's smart to give them an allowance and smart to make them do chores, but I'm not sure about connecting the two. The idea about paying them for special projects (a big yard-raking or a car wash) maybe, but I would vote for not paying the kids to do the dishes or take out the trash or (especially, ESPECIALLY!) clean up after themselves.

You can adjust it depending on how old they are, too. By the time I was ... probably 13 or so, the way my allowance worked was that we got a certain amount in cash that we could spend freely, and a certain amount (we called it "certificates") that my parents kept track of on paper that was what we had "available" to be spent on clothes -- and maybe other responsible-type stuff, though I remember that being mostly the clothes money, which wasn't a lot but allowed us to be technically paying for our own clothes. And I think -- I think -- that when I started babysitting, they required me to put half of that in savings, but never my allowance.

The donation thing seems a little odd to me -- I'm not used to it and I'm not sure whether it teaches quite what you're trying to teach -- but you didn't ask about that, so.
posted by Linda_Holmes at 1:48 PM on August 21, 2012 [2 favorites]

My kids got an allowance but it wasn't linked to chores. Chores are part of being in a family and taking care of your environment, you don't get paid to wash your own dishes. Mine had to put half into savings as well, which I matched. They got $5/week when they were younger, and they enjoyed holding on to the $2.50 each week until it added up to $10 or more, when they'd want to go to the bank to make a deposit (our bank at the time gave kids little plastic dinosaurs for milestone deposits).

An idea for charities that really worked well for us. Spare change (rather than part of their allowance) went into an upturned water jug for several years. When they were 9 & 11, we counted it up ($300+) and logged into to find a micro-business to fund. We've re-donated that money several times since. It's been great.
posted by headnsouth at 1:48 PM on August 21, 2012 [1 favorite]

I think that anything to get kids in the habit of doing chores is a good idea. I am inherently a lazy person, and rarely did more than the dishes and the occasional lawn-mowing. I never was docked/punished for it; my dad and mom did it all. My mom would complain but it didn't get me off my butt.

Unsurprisingly, the notion of establishing good chore habits in adulthood has been a real bear for me. Maybe it would have been anyway even if I'd been given incentives, but maybe not.

Of course one does not get PAID in adulthood for doing chores, but at least the habit of doing them regularly might be ingrained if you give kids incentives early on.
posted by Currer Belfry at 1:50 PM on August 21, 2012 [1 favorite]

If allowance is linked to chores, but your kids don't think their allowance is big enough, they'll quickly realize that it works the other way, too. "It only costs me $X a week to never have to clean my room again? That's a great deal!"
posted by Faint of Butt at 1:52 PM on August 21, 2012 [16 favorites]

However you end up doing it, I think it would be really valuable to have a set-up like this to show the breakdown of spend-save-charity. The idea of spending $25 on a piggy bank is kind of silly, but I'm sure you could set up your own system for free or almost free.
posted by charmcityblues at 1:59 PM on August 21, 2012

I received a weekly allowance, and on top of that, I was the one who mowed the lawn, for a fixed amount per completed mowing. If I didn't mow the lawn, I just got the allowance but no extra, and I also got grumped at.
My allowance was somewhat less than what my classmates got, but it all added up just fine. Never had a conflict about it either with my parents more than said grumping.

When my kids grew up, we were really mild about what could be called "normal" chores. I figured they'd find out about stuff soon enough, there's no need making them hate it prematurely.
Then, right enough, there was a divorce, and a mom (my ex) who choose to educate them alone in another country, and who had rather frequent and complete household time-outs because of a bad back and other health issues - and they went into fully responsible household mode with not much of a complaint (and no extra payment. The country is Holland, which might explain that).

Today (20 and 23 yrs old) they're totally uncomplicated about doing whatever needs to be done when they're here, and they manage their own lives in an exemplary way without us parents having to interfere.

On the basis of this experience, I'd say, go easy on assigning chores in general, let them choose if possible, and yes, do compensate appropriately.
posted by Namlit at 2:03 PM on August 21, 2012

Like Phunnimee, I grew up in a house where there was no such thing as an allowance. Not really, anyway. We were expected to do chores, which my mother would sometimes bribe us to do with money or more commonly small gifts, when she wasn't there to loom over us and supervise. Otherwise, we were expected to just do the chore.

However, to teach us about money management, every Sunday my parents would give us each $1.00 (this is in the mid-70s), and walk down to the corner store for treats. We could pick whatever we wanted, but we could not exceed $1.00. I learned quickly what would maximize my treat haul for that $1.00 (pro-tip: don't waste your money on a bag of chips). Since we didn't get candy or junk food at any other time in the week, this was an extra-special treat.

Any money we received from family and friends for birthdays, etc., got socked away in an account "for a rainy day". That rainy day account became our college fund as we got older.
posted by LN at 2:04 PM on August 21, 2012 [2 favorites]

I had an allowance, and I had chores, and those were entirely unrelated. I set the table and put dishes in the sink and cleaned my room and helped fold laundry and got scolded for not making my bed; and I got an allowance. I don't think it ever occurred to young me that these were jobs and people got paid for jobs. My mom was doing those same types of tasks, and she wasn't getting paid. (If) I did what my mom told me to do, (it was) because she told me to do it.

Once I was in middle school, my brother and I were mowing the grass for money, and a couple of other special tasks. We were also fined for swear words and if we left shoes lying around the living room, had to pay a nickel to get them out of hock for school the next morning, but that's a minor detail. That was more about gold stars than cash value really.

In high school, my launch into the world of personal finance was when my parents combined my lunch money and my allowance. Cafeteria lunch was $1.50 per day; 20 days per month = $30. Allowance had been $5/week, and now they gave me $50/month. I could use groceries my mom bought to make my own lunch, which would let me save up to go to the mall and buy earrings. It was a great lesson in longer-term planning and the price of convenience.
posted by aimedwander at 2:06 PM on August 21, 2012 [4 favorites]

One of my early chores was the laundry and as a result I was allowed to keep any change or money left behind in pockets. Typically, I was the only person in the house that left money in pockets, but every now and then Mom would forget a five or bigger bill in a pocket. You can bet though that from the time I started doing the laundry until I went to college, random things almost never got washed. No pens, lipsticks, lists, or anything that was left behind in a pocket went into the washer because I was constantly aware of the possibility of cash.
posted by teleri025 at 2:12 PM on August 21, 2012 [3 favorites]

My parents docked our allowance if we didn't complete chores. This worked well for my brothers, but not for me, because I had the attitude describe above of "I'd rather pay $1.50 than wash the dishes!" Makes sense in a real life sense since you can often pay to avoid something you don't like, but it didn't help in terms of getting the dishes done.

Like most people I got paid extra for doing special chores. And once my parents were onto my dishes-avoidance strategy, they changed it so that it was docking of allowance plus privileges revoked, which I did care a lot about.

By the way, I vote for simplifying your system - require that part of the money be donated, sure, but I don't think you need to require that part of the money be saved. That's part of the lesson, to me, if you don't save your money, you can't afford stuff you want! If you're required to save your money, you didn't make the decision to do it yourself and it doesn't require self discipline. Charity is different because most kids won't think about doing it on their own since it doesn't benefit them or hurt them whether they choose to do it or not.
posted by treehorn+bunny at 2:12 PM on August 21, 2012

If allowance is linked to chores, but your kids don't think their allowance is big enough, they'll quickly realize that it works the other way, too. "It only costs me $X a week to never have to clean my room again? That's a great deal!"

This. My allowance was docked bit-by-bit as a child when I didn't do chores. It almost immediately turned me into a child who got no allowance and did no chores, which seemed like a good deal to me (my allowance was small anyway).
posted by randomnity at 2:19 PM on August 21, 2012 [2 favorites]

I wouldn't call the charity donation part of their allowance, since it obviously is not one. I'd allow them to participate in where the family's charity money gets donated.

Likewise, if I were a kid, if I were told that I had an allowance, but I had to save it, I wouldn't consider that an allowance at all.

My almost-college-age stepkid has been not cleaning his room for several years now, and not receiving an allowance for it. His opinion is that since he's not going to clean his room anyway, he should just get his allowance for nothing. My opinion is that the world doesn't work like that. He gets so much cash from his father that he gets away with this.
posted by musofire at 2:20 PM on August 21, 2012 [1 favorite]

About the charity donation thing.

This is also very strange to me. Not to turn this thread into a phunniemee's-family-walks-like-this, but my parents also expected my brother and me to help others. We were expected to volunteer for things, and if we didn't do it on our own, they signed us up for it anyway. We didn't have to give anyone our money, but we did have to give other people and things our time and effort.

Both of us volunteer in our adult lives, which is nice, because both of us have had stretches of (unemployed) time where there was zero extra money to give to charity, but we still had ways to give back.
posted by phunniemee at 2:26 PM on August 21, 2012 [1 favorite]

As a child, I was given $ to do chores and it wasn't that much money (at one point I remember calculating it would take hours of work to get a dollar). I also was strongly encouraged not to ask for things, so I graduated myself to paper routes etc. as soon as I was 13. In an odd way, I do appreciate that I had to work for whatever it was that I wanted - but who really knows this is anecdotal and there are no control groups.

However, I did want to drop in this discussion about allowances from the podcast Planet Money. An economist designed an allowance and tried to teach his kids certain values (in some cases it failed, others it succeeded). He wanted the kids to learn to manage money (they did), but he also wanted to discourage certain things like spending money on candy so he implemented a "health tax" and found a point that his kids wouldn't cross. Anyway, it was entertaining and thoughtful, so hence the link.
posted by Wolfster at 2:38 PM on August 21, 2012 [5 favorites]

I had no actual charity REQUIREMENT for my allowance but if I chose do to so, my parents matched it 1:1. That taught me a lot about walking the walk and not just talking the talk.
posted by elizardbits at 2:56 PM on August 21, 2012 [6 favorites]

I did not have to work for my allowance as a teen, but boy did I do a lot of work anyway (washing, cooking, shopping, cleaning). I got a huge allowance for the time and for my age (1970s, $50 and up per week). I was not expected to use it for anything I needed. My parents paid for clothing, school supplies, etc. It was my money to do with as I pleased. As a small child though, did not get an allowance. I started getting a regular weekly allowance when I turned 13.

My mother considered an allowance a "right." So there was no expectation that it was done in exchange for chores, I would get it no matter what. She also did not want me to work while I was in school. This was somewhat unusual among my peers.
posted by fifilaru at 3:42 PM on August 21, 2012

The way you've phrased it, the charity requirement sounds more like a tax. Maybe make charity giving separate from allowance? For example, when I was a teen my grandmother would donate $500 each year to a charity of my choosing. The gift she gave me was the choice.

As for the savings: Make it voluntary, but offer an incentive, such as matching savings deposits or a nice interest rate.
posted by qxntpqbbbqxl at 3:43 PM on August 21, 2012 [1 favorite]

My dad did a combined system - $1 a week was "for buying my lunch" and would never be revoked, and $2 was "for doing all your chores." The list of chores was VERY long - 21 items total, about 14 of which were daily (the rest were weekly or less frequent.) The fatal part is that I was docked at a rate of $.10 per chore not done. If you're even really terrible at math you'll notice that I could do my chores perfectly on five days, slack off on two days, and be down to just $.60. That works out to doing 80 separate line-items (minimum) at a rate of less than $.01 per item.

One penny to empty my trash bin. One penny for making my bed. One penny for sweeping the entirety of my (surprisingly large) bedroom. If I slacked off on 3 days I had no money. For a while he actually carried over the debt from one week to the next. I probably don't need to tell you that I completely gave up on this system (way way way sooner than my dad did) and just believed that I had a $1 allowance. Because, yeah.

Don't do that. It was a terrible system and he dropped it by the time custody switched to my mom and he had a few more kids to raise. When I was a teen he gave me $5 a week just, you know, because. I had various expectations to meet (not many) and he offered me cash to do anything unusual.

My mom's system was actually worse in some ways - she added several levels of complexity, paid me and my sisters a penny per minute for how long it "ought to take (her)" to do whatever the thing was, and insisted that only certain people could do various chores on certain days, so you couldn't even get desperate for a candy bar and just start doing random undervalued chores for the minimal cash. Like, my sisters (theoretically) took turns sweeping the kitchen floor - I was never assigned to do it. I was only paid for doing harder jobs. So, in her house I had no money at all except that which I got from outside sources, like babysitting. My sisters just plain had no money.

Please don't make it complicated. Complicated doesn't really work and teaches very little except "my parents aren't very good at this, didn't think this through, and don't consider anything from my viewpoint." Not good lessons.

I (also) strongly recommend you give the kids some (actually, a great deal of) say in what charities are selected. If you give them the option of, say, four left-leaning charities, and they decide to be Republicans just to spite you, you will be buying yourself one extra battle where it was totally unnecessary. Or what if they suddenly have an interest in something obscure that you didn't think of? More importantly, I really think that charity needs to come from a place of love and desire for helping others, and if the kids get no input into the amount and have to pick from an arbitrary set of organizations, it's not charity - it's kabuki.
posted by SMPA at 3:46 PM on August 21, 2012 [1 favorite]

I was raised that allowance was earned via chores. This lead to my early realization that I could make more by washing the neighbors cars / mowing their lawns / feeding their pets / etc than I could by doing the chores my parents wanted me to do.

With my kids, I'm trying the 'you do chores because you're part of the family' and 'you get allowance because you're part of the family' method. So far so good, but it's too early to tell.
posted by grudgebgon at 4:18 PM on August 21, 2012

In my family: there was punishment for not doing chores - chores were required.

That punishment did not include docking our allowance. It was either being grounded (from leaving the house to play or go out with friends) or losing phone/laptop/TV privileges. When grounded one frequently was assigned to do even more chores, as one was home and available to help with things.

We alternatively were grounded (from having fun/leaving the house or from using our phone/laptop/TV) until the chore was completed, until the chore+extra work was completed, or for some arbitrary period of time (friday night, a whole weekend, or longer).

We received generous allowances - to cover our school lunch, plus spending money, and enough that we could also save a little bit extra for special purchases. Once I turned 16 I also got a gas allowance for driving. Dad wrote us a check on the first of every month for 4 weeks worth, and we were responsible for getting to the bank to deposit it (we had debit cards) or cash it. The bank was less than a mile from the house and we could walk or bike (or, eventually, drive) there ourselves. Dad or mom would also take us if we asked. Allowances were raised each year on our birthday.
posted by amaire at 4:20 PM on August 21, 2012 [1 favorite]

Yeah, if getting an allowance hinges on doing chores, you're introducing the idea that chores have a price, as does getting out of them. In the real world you always have the option of exchanging time for money and money for time -- i.e., if you'd rather have free time than a salary, you can quit your job, and (in most cases) nobody can prevent you. If you plan on requiring that your kids do chores no matter what, but then make the punishment merely transactional, you're basically banking on disobedience, when really what you want is for the kids to just see chores as part of their lives.
posted by ostro at 4:28 PM on August 21, 2012

I really think you got to do chores to be part of the family. You don't do chores, then you lose privileges -- tv, game time, playing with friends, whatever.

Yes, you can reward or pay for extra chores. My mom always paid me to babysit my little brother which was the only way that was ever going to work because it meant me giving up my Friday night loafing with friends to hang out with my 8 year-old brother. Occasional big yardwork jobs would get a little extra money but more often than not, I just had to do the chores.

I don't recall what my allowance was but it was pretty good, better than most of my friends. I was expected to pay for a lot of things on my own -- clothes (except the once-a-year new clothes for school), makeup, music, food when out with friends.

I had a checking account and savings account and no requirements for what to do with any of it. So, I got pretty good at saving for things!

Did I like doing household chores? Of course not. I hated it so much I'm sure I would have given up allowance to sit and watch Mtv all day. It sets up a bad paradigm, I think.

There was a great RadioLab I heard recently about kids' allowances and incentives – check it out. Very amusing.

One thing my parents didn't do -- give me much understanding of how much big things cost and how much it costs to run a household including budgeting and investing. It took a lot of years for me to get my head around basic personal finance. So, think about how you'll start to impart the bigger lessons along with the money.
posted by amanda at 4:28 PM on August 21, 2012

I was given an allowance because I was part of the household. I also had to do chores because I was part of the household. There was no connection between the two. Ten percent of my allowance was given as a tithe on Sundays.

One neat thing my parents did that would not have worked out well if my allowance was tied to chores was the increase in financial responsibilities.
- In elementary school, I was just given an allowance for whatever I wanted -- a toy, candy, etc. This was back in the 1970s, and I think my allowance was $1/week. I had a jar on my dresser, and every Sunday there was $1 in it. If I saved up enough, my mom would drive me to the bank where I could present them with my passbook savings book, which thrillingly to me looked a lot like the book my mom had to record checks -- like a real adult!

- In middle school, I started getting a clothing allowance in addition to the weekly allowance. My mom and I wrote down every bit of clothing that I would probably get in a year. We then estimated the cost of each item, summed it up, and divided it by 12 months. She fronted me 3 months, I think, for that first time just to make it easier for me. I believe my clothing allowance was $50/month. My weekly allowance had increased to something like $5/week. Every Sunday there was $5 in the jar. Every 1st of the month, there was $50. I could choose to save up my weekly allowance for more clothes, or I could spend my clothing allowance on something that wasn't clothing. If I wanted the designer jeans, but my mom would've bought me regular jeans, I had to decide how much I wanted them. Enough to not have a new top to go with it? Battles over clothing were pretty much non-existent. Also added to my chores were taking care of my clothes -- laundry, ironing, and so on were all my responsibility. (I had other chores too, of course, but the clothing chore was to emphasize how I bought my clothes and I needed to take care of them well or else I'd have to buy more.)

- In high school, my lunch money was given to me every month as well. Lunch at that time was 1.50/day. My weekly allowance had increased to $10. So, I got the weekly, plus the monthly clothing, plus the lunch money. I could choose how to spend it all. The high school offered different lines for different lunches, that cost different amounts. And they had a snack bar where you could get more junky food like nachos. Did I want to only eat nachos for lunch and be a little hungry later? Or get the more sensible food and financial choice (the mid-line tray lunch)? It was up to me to decide.

However, at 16 I had a car. They bought the car, but I was responsible for insurance, gas, and maintenance (although my dad always worked on my car, so my maintenance costs were low). My clothing + lunch + weekly allowance was not enough to cover insurance and gas, so I got a part-time job at the local grocery store with all my classmates. I was allowed to keep everything I earned, and my parents helped me keep records of my pay and checked over my taxes every year.

This gave me increasing financial responsibilities and choices -- and options to make bad choices while still in the safety of childhood. By the time I was 18 and the allowance system stopped, I'd been working out my relationship with money for over 10 years. It was a good system. I'm very financially responsible even now, and I think it's because of that allowance system.
posted by Houstonian at 5:42 PM on August 21, 2012 [11 favorites]

TLDR all the responses, but wanted to state that, in terms of chores, assign tasks that are important to THEM! My kids had to do their own laundry, if it didn't get done, I didn't care (they were teens), they were the ones dealing with the dirty clothes.. as opposed to, for instance, their doing all the towels and sheets, which impacted on everyone....
posted by HuronBob at 5:57 PM on August 21, 2012

The most important part is to have a steady regular allowance they can plan on. My parents randomly threw (sometimes literally! my dad would throw money out the window and the fastest kid got the most) cash at us, so we knew how to spend and scrounge, but had no idea how to budget or plan.

With my kids, they get a regular weekly allowance for buying lunch, etc. The older ones get $200 twice a year to spend on clothes of their choosing. I buy underwear, shoes, school stuff - this is great because we have no arguments over clothes as a result, and they are very aggressive bargain hunters now for clothes.

They are expected to help around the house, full-stop. It's not related to their allowance. Occasionally, they want to earn extra money so we will come up with projects/special tasks. One kid is paying for his phone card by making me coffee and breakfast in bed before school, cleaning out the storage room etc. It's important that they've worked in school holidays (Macdonalds! or cleaning friends' houses) as well, so they understand what an hour's manual labour is worth.

Then they also get given money at Chinese New Year or birthdays. We set up bank accounts, and one has chosen to have some money automatically saved from her account each month. One chose to give his bank card to us to keep so he wouldn't be tempted to spend any money, only save it. The other two are perpetually broke so far, but they're learning.

With their "unearned" money that was gifted to the younger ones, we set up a Kiva account and they got to choose loans. I paid a 10% bump when the loan was repaid to encourage them to keep putting more money into Kiva as a sort of savings/investment account, as well as helping. We track the amounts on a spreadsheet, so every month or so, we'll update it.

They've also given to charities, but again as with Kiva, I use that as an opportunity to get them to think about what the money is being used for and how best to allocate it.

This is a good way to teach them financial skills - how bank accounts work, how to save for short-term or long-term goals, envelope planning, comparison shopping etc. You'll have to tweak your system as they grow older and their needs and wants change. But it is definitely useful. My oldest has a shoe shopping habit, but is otherwise far more financially careful than I was at the same age.

Oh! Chore Wars is an old but useful book that talks about seeing chores not as a punishment or burden for kids, but as a way to build a stronger family. It made me see chores as a way to share the household fairly and give kids skills and a say in how they want the house run.
posted by viggorlijah at 7:16 PM on August 21, 2012 [1 favorite]

Completion of chores and getting my weekly allowance were never explicitly linked in my house growing up, but I knew that my parents would be far less forthcoming in giving me my $5 if I hadn't mowed the lawn, cleaned the bathroom, and done the dishes on my night (it cycled amongst us and we all started doing dishes when we turned 10 years old.) If I slacked off on everything and asked them for my money the response would have been something like, "So you want me to give you money, that I worked for, and for which you've done nothing to earn it? No deal, pal."

The result was that my parents had help keeping the house clean and my siblings and I grew up to have great cleaning habits. I see kids getting money for doing squat and wonder what their incentive will be to ever do chores. I mean, why do anything around the house if you know your parents are going to buy you an iPhone regardless?? It's not about the chores, it's about the incentive. The fact that you get a clean house out of it is gravy.
posted by fso at 7:40 PM on August 21, 2012

I had an allowance, peaking at $5 per week in my early teens (I stopped getting an allowance when I started working at 15). At one point I think I got it on a monthly basis. It wasn't directly tied to chores, but it could be docked $1 or so for various reasons. I don't remember the system well, but what I do remember is that it was pretty inconsistent and that it wasn't exactly the same for my brother and for me. Whatever system you do use, it's much better if it can be something you stick to and if you do make the effort to stick to it. I don't think I learned anything from my allowance.
posted by snorkmaiden at 9:53 PM on August 21, 2012

I personally prefer the easy route: the kid gets a certain amount of money unless the kid is not doing as he's told. But if you're into fancy systems and teaching proper lessons and so on, I suggest something like this:

School is a kid's main job. A kid's allowance is the salary earned for attending school, staying out of trouble, getting good grades, and participating in extracurricular activities. The current report card determines the kid's pay until the next report card comes out.

Decide on the maximum you would want to give the kid and then pay X percent of that amount, where X is the kid's current grade average. If you want to build other penalties into the system, do it up front so it all feels fair. For example, you lose an additional percentage for each missed day of school. You gain an additional X percentage points for each approved extracurricular activity you participate in.

You can also hire the kid for part-time jobs that are unrelated to this stuff. You want the garage cleaned this weekend and he wants money, so you strike a one-time deal.

You could make household chores count for a certain percentage of the allowance, such as 80 percent school and 20 percent household chores.

Tell them what they are expected to buy with their allowance. "We no longer buy you A, B, or C. For those things, you save up, you shop, and you buy, no questions asked. Phone, phone bill, etc., are your problem. If I have to pay your phone bill, I will confiscate your phone until a month after you pay me back."

Raises are linked to inflation and age.

Put it in writing, sign it, make a spreadsheet, and review it after the next report card. Parent like a boss.
posted by pracowity at 12:31 AM on August 22, 2012

random data point:

i was forced to save a huge amount of my paper route money, "for college". hard ass work (it was a big route, non-bikable, cold in winter etc) twice a week for like 7 years or something, and i was forced to save some ridiculous amount (75%?) every week, which i was never allowed to touch. finally college came and the grand total was... $117! are you kidding me? it didn't even pay for 2 weeks of groceries! the candy i could have ate! the video games i could have played!

lesson learned: saving is bullshit, i still don't do it to this day. if i could have spent, i dunno, half of what i'd saved every year on some big ticket kiddy item i feel like the lesson would've sunk in better.

on the other hand, certain added chores got spendable cash ($1 for cooking dinner for instance) to this day i do side jobs for cash, it's a big part of my income.
posted by messiahwannabe at 12:39 AM on August 22, 2012 [1 favorite]

Like others upthread, I had an allowance that was premised on completing chores, but there wasn't any system of "docking" it or little penny-ante fines for not doing specific things. Either I did all my chores by Sunday afternoon and got my allowance, or I didn't do them and I forfeited that week. (Occasionally there would be some sort of negotiation so that I could postpone doing some of my chores into the following week, if I'd been legitimately too busy with school or other activities to complete them, but I'd postpone getting my allowance until they were all done as well.)

That sort of all-or-nothing approach worked fairly well; there wasn't a lot of arguing over things. My brother and I pretty much knew what we were responsible for and got them done so that we could get our allowance. The allowance wasn't payment for chores as much as it was a grant from Dad that could be withheld if we were not seen to be pulling our weight as part of the family.

We were heavily encouraged to save (though not "for college" -- which as others have pointed out is pretty abstract and meaningless to a kid, as well as unsatisfying down the road given how stupendously expensive college is relative to the sum total of all the allowance money they'll ever receive) although we theoretically had full control of the money we received. When we indicated a desire to blow it on something stupid or short-term, our parents would generally use the carrot approach of reminding us of some bigger-ticket purchase we had expressed an interest in. This worked pretty well, and I remember dividing up the cost of something I wanted by my allowance to figure out how long it would take me to afford it. If I had kids, this would certainly be something I'd want to pass down (and especially the idea of saving in advance of buying, rather than buying on credit).

One thing I suspect is harder today than in the past is demonstrating the value of a savings account. When I was young, savings accounts earned enough interest that the effect of compound interest was felt even on relatively short timescales (6 months or a year). Today, with interest rates below 1%, it may be a lot harder to demonstrate why putting money in the bank (pretty inconvenient, to a kid) is a good idea. I don't envy you that lesson.
posted by Kadin2048 at 1:31 PM on August 22, 2012

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