Chores, Yes. Allowance, Maybe: Teaching Kids About Work and Money

In the old Cybil Shepherd/Bruce Willis comedy Moonlighting, the office workers at the Blue Moon Detective Agency once chanted "No work and pay!" hoping for just that -- to be paid for doing nothing. Many of America's children might have the same hope, but alas, according to a recent survey, their parents have other ideas.

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The survey, called Chores & Allowance and the 21st Century Kid, was conducted by, a company dedicated to family financial education. It found that the vast majority of parents -- 89% of them -- assign chores to their children. Only about half, though, give their kids an allowance. And among the allowance payers, just 21% tied the payouts to chores. Those who aren't paying allowances might want to consider doing so, though.Tying Pay to Chores One of the top reasons for paying allowances is to help children learn to manage money -- 47% of allowance payers cited this reason.

Ken Damato, president and CEO of DoughMain, sees an ongoing debate about allowances and chores in America and about "whether giving an allowance helps make kids smarter about money -- and whether parents should require kids to do chores to receive one." While some parents focus on either chores or allowances, Damato suggests tying them together. By being assigned chores, children learn responsibility. If their reward is financial, that can serve as compelling motivation for them and can also help them learn the value of money and how to manage it.Unpaid, but Not Unrewarded It's worth noting that while many children who do chores and don't get allowances may seem to be unrewarded for their work, there are other forms of rewards that parents employ. Non-monetary rewards include television or computer time. A growing number of parents are using such rewards (26% of surveyed parents use them instead of money) -- perhaps to some degree out of necessity, as many parents are financially pinched these days. And some parents object to connecting allowances to chores, wanting their kids to do chores simply because they are expected to, out of a sense of responsibility and not merely in order to receive money.Allowance Tips If you pay your children an allowance or are thinking of doing so, here are some things to keep in mind:

  • Starting early is OK. Some experts suggest that even 6-year-olds can handle a small allowance. To determine what a sensible sum is, think of how much your child might reasonably spend in a week on expenses that you think they should pay for, and pay them all or some of that.
  • Encourage well-rounded money management behavior. It's good to learn how to save for different time frames and goals. For example, designate one portion of your child's allowance/earnings to long-term savings goals, such as a big purchase like a car or even college. Another portion might be earmarked for charity, perhaps supporting one or more causes important to the child. And one portion should definitely be used for fun, to be spent on entertainment or clothing.
  • Combine the chores and allowances with regular discussions about money. Don't just discuss how they're managing their money -- discuss how you are managing the household's money, as well. Children can benefit by knowing how much it costs to hire a plumber or buy the week's groceries.

Here are a few more tips, from the folks at DoughMain:

  • Before assigning an allowance, make sure your kids know the basics of coin recognition and confirm they have a basic understanding of keeping track of dollars and cents.
  • Let some chores be not rewarded with money, to help teach responsibility, while others can be paid tasks tied to an allowance.
  • Consider giving an allowance or rewards for household chores like dusting and vacuuming, but also for important responsibilities, such as homework, hygiene, exercise, punctuality, and positive behavior.

Chores and allowances are great ways to help your children grow up to be responsible people and smart money managers

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