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Should I Give my Child an Allowance?

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Piggy Bank Savings

          An allowance is an amount of money given on a regular basis for the purpose of helping the person cover business or living expenses, according to Of course, we do not envision our children flying out on a business trip or even paying for their own housing any time soon.  However, the idea of giving our child an allowance is one that we often ponder as our child begins to get older.  We wonder if giving our child money is the right thing to do. At what age should allowances begin?  How much should we give and how often? Finally, how will an allowance benefit the child?

          Many financial gurus like Paul Lermitte, believe that parents need to teach their kids about money.  Since money is something that everyone eventually must use and manage, it is important for parents to introduce healthy habits and attitudes about money. In his book, Allowances: Dollars and Sense, Mr. Lermitte discusses six dangers associated with not teaching your children about money. These include financial dependency, destructive values, debt, loss of confidence, teaching the wrong thing, and family conflict. Lermitte outlines several universal principles that parents need to understand in order to teach their children financial responsibility.

          The age of the child and the interest will determine when a parent should begin lessons on money. If the child understands the concept of money and that it is used for the exchange of goods, then the child is ready for an allowance.  This could mean, depending on your child’s ability, at age four or five the child is ready for small doses of money management. Generally, most kids are seriously ready around the age of eight. By this time, they have learned basic money denominations in school; they can count change and dollars on their own. The child may even have friends who are already receiving allowances and may ask about it.

Gimme, Gimme, Gimme! Children need to learn money sense.

          Figuring out how much of an allowance to give your child can be a daunting task. Some people say that you should allot one dollar per age of the child. Others say you should give what the child’s friends are getting. However, realistically, it would be wiser to review what you already spend on them.  Of course, we are talking about extras like toys, entertainment, etc. and not living expenses like housing, utilities, and the like. Make a list with your child of all the expenses you expect your child to pay with his or her allowance. David McCurrach states in his article, “Give ‘em an Allowance!”, that you should, “Keep in mind the fact that kids have three uses for their money-spending, saving and sharing. Consider all three areas when you are coming up with the amount. In addition to setting the allowance, this process puts an end to the constant  requests to buy this and that and to give them money to do whatever their hearts desire.”     

          Tying allowance in with daily chores can be beneficial as long as it is distinguished between chores that a child must complete to be a part of a household, and chores that receive pay.  For instance, making his or her bed, brushing teeth, and picking up toys after playing are responsibilities that the child must do to be a productive member in the family. It is the extra chores that can be incorporated into the allowance system. Jobs like pulling weeds, washing the windows, and babysitting younger siblings, to name a few, that a parent may wish to put a dollar figure upon.  Remember, that in the adult world, people are paid to do a job outside of their responsibilities at home. This same rule should loosely apply to your child.

          The benefits of introducing an allowance to your child outweigh any fears a parent may experience in teaching the values of money. The child is given the opportunity to try and fail with money decisions in a safe environment with a financial planner nearby-You! Since elementary schools do not teach financial management, it is up to the parent to make sure a child learns good habits and skills. An allowance system is a perfect way to achieve this goal.

Below, are a few interesting places to further investigate the idea of giving an allowance to your child.

Allowances, Dollars and Sense, by Paul Lermitte – Web site and book.

Give ‘em an Allowance!”, by David McCurrach- Article

“Age- Appropriate Chores”, from Family Education-Article and hand chore chart you can print.

Allowance Calculator”, from–  Useful tool to decide an allowance amount.

Money Doesn’t Grow On Trees: A Parent’s Guide to Raising Financially Responsible Children by Neale S. Godfrey – Book

Money Sense for Kids, by Hollis Page Harman- Book


“Age Appropriate Chores”. (200-2012). Retrieved from Family Education:

“Allowance Calculator”. (2012). Retrieved from

Crites, P. A. (2012). Should you give your child an allowance? Retrieved from University of Nevada:

Lermitte, P. (2012). Book One: Allowance, Dollars and Sense. Retrieved from Paul W. Lermitte, Family Business specialist:

McCurrach, D. (2012, 1 28). “Give ’em an Allowance”. Retrieved from Kids’ Money for Parents:

Copyright © Jamie Nowinski and Grandmother Wisdom/ Grandmother Musings 2012-2013.
Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Jamie Nowinski – Grandmother Wisdom/Grandmother Musings with appropriate and specific direction to the original content.

About bigsmileu1

What good is living life if you don't share all the experiences, mistakes, and knowledge you have gained? I am a grandmother, a wife, a mother of two grown children, a Jr. High Teacher for almost two decades, an elementary principal and I want to share my experiences.

20 responses »

  1. Yes. It teaches life long lessons about financial management and responsibility. Their age and understanding will determine the best time to start.


    • Very true. I had an allowance as a child, and I made sure my children did, too. It helps them to know that money is not infinite and that there are choices. Thanks for commenting, Francine. 🙂

  2. As kids become more and more materialistic, yes, they need to learn how to manage money. Thank you!

    • It is so important for kids to learn about money in their younger years, and so very hard to find out in young adult years. Thanks for the comment, Amy. 🙂

  3. I think that every parent (with the means) should give an allowance to their children, provided that they understand that it is something to be earned. The allowance is really a cap if you will, so that a standard amount is set and not up for negotiation. Though there is no rule book that say’s you can’t give them a little something extra if they happen to have over exceeded your expectations upon completed their chores. This instills responsibility and where teaching your children what it means to earn their money. Set the limit at something kids will be willing to work for but not too much that would make the following possible…the less a person has to spend, the more one agonizes over their choice of purchase,thus making them more frugal and less of a spendthrift. It also detours bad habits such as impulse buying (most of the time.)
    Allowances are suppose to be our children’s first experience’s of making informed decisions for themselves and for their money. In short, there’s a lot of lessons and good that comes from giving kids an allowance. To skip this step, may hinder their ability to handle their finances wisely when their older.

    • Yes, and teaches them that sometimes we have to decide between the thing we want and the thing we need. Like, I really want to buy that Woman’s Day magazine, but if I do, I won’t be able to buy bread. It also teaches them to save for quality not just quanity. I love your comments! Thanks for responding. Enjoy the day! 🙂

      • Yes, didn’t think about that at the time but yes. It’s not always easy to wait but it sure is nice when you do to get exactly what you want. Good point.

  4. I think I meant to say Not to give your children too much to make it impossible for them to learn about what it means to agonize over a choice of purchase. Having too much money puts their brain in the situation of “how much can I buy” rather than, “I can afford this and that but that means I wont be able to get this over here.” Kids need to learn how to make choices and learn to deal with disappointments of what they will have to live without.

  5. Where exactly were you when I was raising children!! Very nicely put.

  6. I agree with giving kids an allowance for chores above and beyond those normal things that they do….things that help the parents take care of the household easier. In other words you can’t expect to be paid for everything in life….Diane

  7. Kids should receive an allowance only after they understand that life is not a free ride and they get paid only after they have done some kind of work in and around the house. I have too many friends who give allowances to their kids for no reason at all.

  8. Great topic! Our kids get allowance on Saturdays. This is earned allowance based on their efforts during the week. It is a measured system that is giving them pride in having some money in their jar. Then when they want me to purchase something for them, I can tell them that they can spend the money from their allowance. It really helps them think about $$. I have been learning so much from a book called, “1001 Best Ways, Volume 1” by author Paul D. Angles. 1001 Best Ways asks ordinary people for their best ways to handle 24 important topics, including raising kids, saving money, connecting with the Divine,
    maintaining a relationship, having fun, etc.

    • Thanks Robyn for commenting and for sharing your experience with your own children. I had a chart on the fridge when my kids were young. When they completed a chore that qualified for allowance I would tally it up at the end of the week and pay them. It worked.
      I will check out the book, “1001 Best Ways”. It sounds like something I would be interested in reading. Enjoy the day! 🙂


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