The Big Allowance Debate

It seems no matter what decision we make as parents there is someone out there telling us to do the opposite. The same can be said about allowance. I’ve found over the years there are two distinct camps, allowance is payment for chores completed or allowance is just given.

However the allowance for chores camp is also divided: Commission per chore (AKA The Dave Ramsey method) or flat amount per week for completing chores. In our house we use the latter. If the boys complete their chores (without having to be nagged too badly) then they receive their allowance. We don’t break each chore down into a price and tally them up. That just seemed like too much work.

So what are the pro’s and con’s of each system?

Paycheck Method: With the paycheck or commission method the biggest pro is that kids learn a strong work ethic and that earnings are completely up to them and their efforts. No Work = No Pay. This will serve them well in the future as expectations of handouts will be minimized. The con however is that household chores are then seen only as a way to get paid. Psychologists worry that chores based allowance will give the wrong idea – that you’ll get paid for every little thing you do. (source: The Kids Allowance Book)

Handout Method: The choice to give children an allowance with no requirements or strings attached is usually chosen by parents who are not focused on the work part of the equation but the spending. They give their child the allowance and then work with them to divide out and manage the spend, save and give portions. The other upside to this method is that kids learn housework is simply a part of normal life and contributing to a household.

Is there a better hybrid? Would the better option be to compromise? Give the kids a basic allowance that is not tied to chores (base pay) but provide opportunities to earn additional cash (bonus) such as helping to clean the garage. This hybrid allows you to teach money management with the base allowance and work ethic with the bonus.

How does allowance work in your house? Have you found a method that works best for your family?

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