Do You Pay Your Kids an Allowance?

Several parents have written to me over the last couple weeks asking for my recommendation on how much to pay their kids in weekly allowance. My response probably surprises them initially, until I have a chance to explain. Zero. I do not pay my kids an allowance. My kids are on a commission schedule. They have a list of chores required of them daily for which they earn a small amount, and they have the option of completing a few extra chores for additional commissions. At the end of the week we add up the totals for each chore completed and they collect a commission payment.

kids raking leaves
photo by terren in virginia

Allowance vs. Commissions

I don’t like the word “allowance.” It looks too much like receiving money whether you work for it or not. I personally do not believe this helps to prepare kids for the real world where they are expected to get out there and earn a living. So around the frugal family household you actually have to work to get paid (novel approach, isn’t it?). The various daily chores are age-appropriate and do not require a great deal of time to complete. We also include some larger chores for the kids to pick from in order to earn a little extra money. These larger chores are optional, but provide our kids the opportunity to stretch to earn more money.

Sample Commission Schedule

Here is a snapshot of the commission schedule for my daughter. Notice the daily chores which pay $0.05 each are things you would expect an 8-10 year-old to do anyway. The $0.05 is really just my way of encouraging her to get in the routine of completing these tasks every day. By rewarding her with a nickel for making her bed I get better results than fussing about a messy bed later in the day.

commission schedule

The “Extra-Credit Chores” range from $0.10 to $0.50 depending on their degree of difficulty. My daughter loves to work this section (so much so that I’ve had to renegotiate the costs to keep from going broke) when she has a savings goal in mind. If a new CD or DVD is due out that she really wants we suddenly find her wanting to vacuum, dust the furniture, etc. every single day! We try to encourage her not to take it too far, but it is hard not to be impressed by her entrepreneurial spirit.

The “Bonus” section is reserved for any extra chores the kids may be asked to help with during the week. I have plans over the next couple weekends to add some wood stain to our privacy fence. Instead of buying or renting a paint sprayer, I plan to hand the kids a paint brush and let them help. Tom Sawyer would be proud! I will pay them something like $0.25 a panel so they can easily tick off their earnings in their head.

Random Acts of Kindness

The “Act of Kindness” section is something Mom and Dad fill in when they witness the kids doing something nice for others. It could be as simple as holding a door open for a mom with a stroller, or as elaborate as volunteering some of their Saturday to help make crafts for a charity. The point is, we want our kids to be givers and we encourage them to find creative ways to be help others. They don’t receive a reward every time they perform a random act of kindness, because if they got paid for it each time it would change the spirit in which they perform the good deed.

My daughter loves to complete her commission schedule on a daily basis, and looks forward to weekend payments. To really make this tool effective you have to resist the urge to give kids “extra” money throughout the week, or buy them too many extras without requiring them to work and save.

Do you pay your kids an allowance, or commissions?

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