Chores and Allowance: Teaching Kids about Money

My daughter wanted to get another new Barbie set. At the time, we had just celebrated the Christmas and her birthday, so I refused - thinking to myself that one more toy was the last thing that she needed. Later when she was counting up the money in her piggy bank, I saw an opportunity that educators call "a teachable moment". I suggested that she had enough money to buy herself that Barbie toy. She considered the idea and agreed to spend her money on the toy.

Later that week, we visited the local Target store. She picked out her toy and carried it proudly around the store as I picked up the items from my regular shopping list. At the checkout, I told her to get in line in front of me. When it was her turn, she handed the cashier the Barbie set and then handed her a twenty dollar bill. The cashier gave her a few coins in change with her toy in a bag. She was so happy to get the new toy, she stood beaming with pride while I checked out with my items.

That week she played with her new toy and decided that she wanted yet another one. Again we visited the local Target store and repeated the shopping experience for another $20. The following week, when she wanted a third new toy, we recounted the money in her piggy bank. To her disappointment, she didn't have enough money for it.

This presented part two of the teachable moment - earning money.

Later that evening, her Dad and I talked about starting an allowance plan. Like many families, we debated the pros and cons of weekly allowance verses a plan to allow her to earn money for performing household chores. While there are benefits that having a weekly allowance can teach the kids the value of saving money over time. However, we didn't like the idea of giving her money for money's sake.

I spent the evening reading a bunch of parenting articles online trying to figure out-

1. How much allowance is appropriate for her age? 
2. What chores are age appropriate? 

The best advice I found is that the amount of the allowance should be appropriate to how you expect them to spend the allowance. For example, a teenager might get a higher allowance and be expected to use the money to buy their lunch at school each day and have a little extra to save up for a special item.

The other consensus from my reading seemed to indicate that a dollar a week for each year of their age is an appropriate dollar value. Seven bucks a week for my seven year old? While I wanted her to be able to save up in a reasonable amount of time to get herself that new toy as a reward for disciplined savings, it seemed like too much money for no effort.

So, I kept reading and researched age appropriate chores. I found a list of chores that I thought she was capable of performing regularly. I then devised a system which, at least to me, seemed like a nice compromise.

Chores for our seven year old:

• Cleaning the Playroom
• Assisting with unloading the dishwasher
• Set the table for dinner
• Clear the table after dinner
• Swiffering the upstairs bathrooms
• Swiffering the downstairs (bathrooms and kitchen)
• Water the plants
• Sort the laundry
• Fold and put away own laundry
• Gather trash from the wastebaskets

We agreed to give her an allowance of $3 a week. The catch was that this amount could be reduced for bad behavior such as the occasional 7yr old tantrum, not cooperating with a reasonable request from Mom or Dad, etc. The upside, is that she could earn additional money (around $3-4 a week) for doing chores around the house. A "big" chore like cleaning the playroom would earn her a dollar, while small chores like swiffering the floors or watering the plants earned her a quarter. Chores were divided into categories of things she could do daily, a few times a week, or weekly. I created a flyer that could hang on the refrigerator and be used to keep track. If she missed her opportunity to help sort the laundry on laundry day, then she missed that opportunity to earn money for that chore for the week.

We explained to her they new system at dinner one evening and hung the new chart on on fridge. She set a goal to buy herself an American Girl doll. In another post, I'll share with you how this system has been working for us so far.

(image used with permission from Microsoft)