Giving your child an allowance can be a great way to teach them about responsibility, money management, and saving for the things they want. Not to mention the value of a dollar! But how do you know if your child is ready? And what's the best way to go about implementing chores? Here are 5 things to consider when getting started!
How to know if your child is ready for an allowance
- Are they curious about money? If your child is starting to ask about how much things cost? Or asking questions about why you can’t “just buy” what they want? Then it might be a sign they’re ready to manage some money and learn how to save for something.
- How are their basic math skills? Can they handle simple addition and subtraction? That’s a good indicator that they can start learning how to budget small amounts. This can also be a great way to strengthen those skills!
- Are they mindful of their belongings? If your child can handle responsibilities like keeping track of their toys or staying on top of their schoolwork, they may be ready to handle the responsibility of chores and an allowance.
- Are they patient when working toward a goal? If so, that’s a great indication that they’re ready to see that practice in real life by saving their money toward a bigger purchase. If patience isn’t their strong suit, this is still a great opportunity to help show them that patience in the short term can prove the right choice for the long term!
- Are they “bored” a lot? Kids often complain about being “bored” because they’re not being stimulated in a way that makes them feel confident or like they have a purpose. Or, they are simply wanting to engage with you or another human. Getting them engaged in helping out around the house, or working toward something they are passionate about, can help them feel motivated, stimulated, and confident in their ability to work toward a goal.
Ready to get started? Here are some things to consider
- Talk details Some families tie chores to allowance, meaning kids earn money for completing tasks like cleaning their room or helping with laundry. Others prefer to give a set allowance regardless, so chores are seen as part of contributing to the family. Both approaches can work—choose what feels right for you! Cash? Debit? Gift cards? Think about how you’re going to make it work, and make sure to be consistent!
- Create a chore chart Make it easy to track chores by creating a fun chart with your child’s daily or weekly tasks. Start with simple, age-appropriate chores, and gradually add more responsibilities as they grow.
- Set a consistent payment schedule Whether it’s weekly or bi-weekly, stick to a schedule for giving allowance so your child knows when to expect it. This will help them plan how to use and save their money. Be honest with your child, make sure to thank them for their hard work, and teach them the importance of rewarding yourself for a job well done!
Money lessons for your little humans
- Explain the process Remember, you’re used to paychecks and pay periods. Your little one is not! Explain the process, what they can expect, and how it all works (both in your home and in real life). Teach them about working hard, getting paid to do so, and how then you get to treat yourself! Even mentioning how your own paycheck works can help put things into perspective for them.
- Set fun savings goals Work with your child to set savings goals for things they really want, like a toy, game, or a special outing. This teaches them how to save and builds excitement when they finally reach their goal!
- Use visuals Use clear jars or containers to help kids see their money grow. Or, if they’re more into technology, consider using a kid-friendly savings app that lets them track their allowance and spending.
- Talk about needs vs. wants Use everyday examples, like grocery shopping, to explain the difference between things we need (like food) and things we want (like toys). This helps them make smarter choices with their own money. Using real-world examples help them understand these concepts much easier.
Starting an allowance is a great way to help your child learn important life skills, like budgeting and saving. By tying it to chores, you’re helping them develop good habits that will stick with them as they grow. Everyone’s family is different so make sure to pick a process that works for you!