Should you tie chores to allowance? (“3 Ideas to Share & Save” 075)

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“Working to help parents raise money-smart kids.”

Hello, friends!

I recently hopped on a presentation about raising money-smart kids. (Yes, that’s what I do for fun. 😉) I was hoping to pick up some pointers, but I instead found myself frustrated.

A key question many parents have is whether an allowance should be tied to chores. Yet the way this particular instructor approached the topic left me feeling confused.

So in this week’s “3 Ideas to Share & Save,” I want to clarify the purposes of allowances and chores.

I hope the following helps you on your journey.

— 1 —

The Purpose of an Allowance: Before diving too deep, I should emphasize that an allowance is not a handout.

An allowance is a tool we use to help our kids learn money smarts through experience. (And as we all know, experience is an excellent teacher. 😉)

To avoid equating an allowance with a handout, you must be explicit about the above purpose. For example, you can tell your children, “We’re setting up this system to help you be smart with your money, and we’re here to answer any questions you might have.”

You’ll start by teaching your kids the key skills we’ve discussed here before: distinguishing between needs and wants (And needlets!), setting and saving for goals and making smart money choices. It’s even worth reiterating all three at allowance time.

For more details, you can read this post or my book, The Art of Allowance.

You may also want to download the Allowance Launcher that I introduced last week. It will help you start your system today.

And last but certainly not least, I’m launching a new course if you would prefer to build your program alongside other parents.

JOIN THE WAITLIST

— 2 —

The Purpose of Chores: Chores teach kids that they’ll often have to work to earn money. This lesson is no less important than that of an allowance. However, notice the different purpose.

Most parents I talk to don’t pay their kids for everyday tasks like making the bed, clearing the table or unloading the dishwasher.

I agree with this approach, as I consider these basic chores the rent your kids pay to stay in your house.

Ron Lieber offers another framing in his book, The Opposite of Spoiled:

“At home, [dad] finds himself repeating something his father used to say, which is that their house is not a resort but a homestead. They all pitch in, and no one gets an allowance for doing regular chores.”

I like that idea. A homestead. 🏡

Still, a fair amount of parents do tie basic chores to allowance.

And many parents offer “above & beyond” chores, which are tasks they might pay someone else to do or do themselves. Examples include: washing the car, mowing the lawn and vacuuming the house.

Personally, I’m a fan of the “above & beyond” concept because it connects chores with their purpose, teaching kids that work is often required to make money.

But let’s not…

— 3 —

Miss the Forest for the Trees: One of the key benefits of setting up an allowance is that it signals to your children that you’re ready to talk about money. You’re sending the message, “Money won’t be a taboo subject. Not in this household!”

Since I consider discussion vital, I often joke that I could have called my book The Art of an Open Conversation About Money. (Hey, I’ll be the first to admit this title doesn’t exactly roll off the tongue! 😜)

An allowance as a catalyst for conversation underscores why beginning your program when your kids are young is crucial.

However, let’s not miss the forest for the trees here.

If you’re still uncomfortable decoupling chores and allowance, then I think this passage from my book might help:

“So, are you wrong to tie chores to allowance? Not necessarily. There are some authorities who think chores must accompany allowance. The case is not closed. In fact, there are researchers who question an allowance in general. If you feel uncomfortable providing your child an allowance without tying it to chores, then tie away.

My opinion on this issue has evolved over time. I now believe that your giving an allowance to and beginning a money dialogue with your child are more important than my trying to convince you that decoupling allowance and chores is the better path. Whatever you decide, remember, choosing some form of allowance is important. Without real money, teaching money smarts is just an abstraction.”

Linking allowance and chores is a personal decision, and what matters most is that you get started.

I hope understanding the dual purposes of chores and allowances helps you set up – or adjust – your system in a way that works best for your family.

To close, I’d like to share a simple yet poignant thought from Apple CEO Tim Cook’s 2010 Auburn commencement speech:

“Let your joy be in your journey – not in some distant goal.”

A tip of the hat to my brother for sending me the Fast Company article containing this speech. It’s a good one.

Until next time, enjoy your journey!

John, Chief Mammal

P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.

Source:

  • Mandell, Lewis. “Child Allowances – Beneficial or Harmful?” Lewis Mandell, Ph.D., August 12, 2017, http://lewismandell.com/child_allowances_-_beneficial_or_harmful.

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