Should Parents Tie Allowance to Chore?

Earning an allowance is the right way for kids to learn about money and develop financial habits that can benefit them in adulthood. This topic has become a hot one over recent year, and for a good reason. It’s one of the most impactful ways to teach kids about money management. Your child learns early childhood that they need to work to make money. An allowance teaches your kids to make money decisions. Allowances can help guide the balancing act that budgeting requires. For instance, if kids overspend one week, they’ll have to budget better the next week. 

    As a parent, if you struggle to find the best way to give your kids an allowance, here is some advice from @Moneydad.

1. Chore-based allowance approach

Chores-based allowance methods are a fun and easy way for kids to develop financial habits. Kids are expected to do certain chores around the house in exchange for money. The benefits are that the child sees a direct correlation between effort and the money he or she receives.

2. Pure allowance approach

Children get allowances each week with no link to work. Some parents don’t want to pay their kids for chores. They believe kids are part of the family and they should contribute for the good of the family by default.

3. Hybrid approach

This approach is a mix of chore-based allowance and pure allowance methods. Kids have daily/weekly/monthly budgets no matter what. At the same time, parents make a list of tasks that are not tied to any perks, and kids should do them as a part of the family. Like, make your bed every morning, because you sleep on it. However, if a child wants to earn additional money, they can do extra tasks around the house. For example, rake leaves or wash dad’s car for a charge.

BE FLEXIBLE

It’s important to allow yourself some flexibility. The method you end up using may not be what you started with, as your child may not respond to positive or negative reinforcement as initially expected.

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