How much? What age? Chores?
Paying kids an allowance, like so many family matters, is fraught with fuzzy edges.Skip to next paragraph
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"There really is no one right way to do it," says Amy Nathan, author of "The Kids' Allowance Book."
Even though the approach often varies from family to family, even from child to child, Ms. Nathan says the main thing is to keep the allowance going. "It's just such a good educational tool for learning about money."
Sharon Danes, an economist at the University of Minnesota who does family financial counseling and studies children's grasp of money matters, agrees.
"I know from my counseling work that we need to start teaching children about money much earlier," Dr. Danes says. "By the time kids are school age, they've already got a lot of their motivations and expectations about money."
An allowance at age 5?
What's the right age to start giving an allowance?
"It all depends on when the child understands what money is and what you can do with it," says Nathan, whose research found some five-year-olds with allowances. It's much more common, though, for allowances to begin when children are between 7 and 9. (About half of nine-to-14-year-olds get allowances, according to national studies.)
One advantage to starting early is that younger children can learn simple, valuable financial lessons with just a little loose change.
They are going to make mistakes, Danes says, so the smaller the amount the less rides on the outcome. Better, for example, to see the folly of wiping out a $1 allowance on candy than blowing $10 foolishly.
"You're really teaching them a skill. When a mistake is made, help them figure out what needs to be changed. One of the stickiest issues is determining whether to tie the allowance to chores.
In her book, Nathan says studies show that most children must do chores to collect.
On average, three chores must be done each week, with room cleaning, dishwashing, vacuuming, lawn mowing, pet keeping, table setting, and garbage and laundry duty among the most common.
There are two basic problems with chores-based allowances:
1. They can become a record-keeping burden.
2. When a job is undone or poorly done, parents are faced with the ticklish job of withholding all or part the allowance.
To avoid this, some parents give what Nathan calls "just because" allowances. Children are encouraged to help out just because their help is needed, but their allowances aren't contingent on doing any chores.
Many parents wind up dipping into both philosophies and utilizing a hybrid that works for them.
The Gray family of Needham, Mass, adopted sort of a pay-as-you-go approach. Sons Brendan (12) and Matt (10) were so busy with sports and scouts that doing weekly chores wasn't practical. Now, whenever they need spending money they work for it. "They can mow the lawn, rake the leaves, or do some serious house cleanup for $5 a hour," says Taylor Gray, the dad.