Giving Your Child An Allowance

Why Giving Your Children an Allowance Really Pays Off


An allowance is much more than just a way to reward good behavior, or something that makes our children happy. As adults, we are very familiar with responsibility and hard work. We know that if you want something in life, you must earn it. Time management and good financial habits are essential to making life run smoothly. An allowance demonstrates this to our children, and these are concepts they are never too young to learn.

An allowance is something that benefits both children and parents alike. In my household, their allowance isn’t just a form of bribery (although it doesn’t hurt the cause) but it also teaches them core values that will benefit them their whole lives. I utilize my allowance system to teach a wide variety of lessons like social and community awareness, good hygiene and cleanliness, how to follow directions and work independently, money management, and good behavior. Skills that I feel they will utilize in every aspect of their adulthood.

Each task accomplished is not only a chance to earn a reward, but a chance for us to bond as a family. Through a system of chores and tasks we work together to make our household a home. We must communicate with each other and it also gives each of us a sense appreciation and pride for each other’s functions and jobs within the family.

The Paycheck

Each week I issue my children a paycheck. Why a paycheck? Because this best reflects how real life works. It puts a specific dollar amount that shows exactly how much work and effort they put into earning their allowance each week. You can get creative and print out or make your own checks online. (See below for my example). Make sure the checks highlight exactly what tasks or actions earned or cost them allowance money. This way they can better track their behaviors and improve upon them each week.

Every Monday my daughters start out with a base pay. You can choose whatever dollar amount you want for this. Call it a reward for showing up or a trophy of participation. This isn’t money they get for doing nothing however, when they end a week at the same dollar amount that they started with, it does not get rewarded or praised. In fact it is the equivalent of them not earning any money at all and cannot be used to purchase rewards. This is to teach them that if all they strive for is mediocrity that is all they are going to achieve. Their goal in life should always be to shoot for the stars.

Ways To Earn


I don’t believe in rewarding my kids for doing things like making their beds, or putting their dirty clothes in the hamper. Chores are on the list of ways to earn however, but I choose to allocate chores that go beyond what they should already be personally responsible for anyway. Helping to take care of the house teaches a sense of community and comradeship with their other family members.  It is a bonding experience because we all pitch in together to get the job done, even though we all play our own separate parts. Each chore can be completed either daily or weekly depending.


Good grades, neat homework, and going above and beyond in school are other ways to earn money towards their paychecks. These are also things that I already expect from my children without incentives, but I feel that they are worthy of rewarding anyway. School is a child’s main and most important responsibility, so I feel that any accomplishments should be praised. It also helps make daunting tasks like homework and studying a lot more fun. As well as helps to reinforce a love for school and learning.

Good Deeds

I count good deeds as things my daughters do (unprovoked) that show compassion, consideration, and kindness.  I don’t dictate these tasks because I want them to act on their own accord. Helping their siblings, volunteering for extra chores, or even just helping me carry in groceries are all acts of good deeds. I ask them to reflect on and look for good deeds they can do outside of the home as well. I reward this behavior because as they grow and learn I want it to become second nature to them. My goal is for my children to care about the community and world around them, as well as the people in it. I do not give monetary rewards for this. It’s not a selfless or good deed if you expect something in return. Praise and recognition are important at a young age however, as a form of encouragement.


Here is where this allowance system is unique. My children have the choice to either cash in or deposit their weekly paychecks. Money that is deposited and saved can be used towards a bigger reward in the future, whereas cashing out immediately will reap smaller rewards.

Although there is a dollar amount and value of each paycheck, my children can opt out of receiving cash in favor of a different type of prize. Prizes can vary based on your child’s individual likes and interests.


At the end of each month I hold an auction in which my girls can bid on items that they may want. Items up for auction can be anything from toys, to makeup, headphones, and all sorts of cool stuff. Since they are young, I don’t charge them the full price of the items they are bidding on. So, they can get prizes that would otherwise cost them their entire allowance for only a few bucks.

This helps my children determine the value of something they want versus the amount they are willing to pay for it. It is an exciting way to teach them how to get the best bang for their buck.


Another choice they have for how to spend their paychecks is on a special outing. They don’t pay for the trip at face value; the money in this case is utilized more like points. For example, a trip to the zoo doesn’t cost $3 in real life, but the price will be listed as that in the rewards. This also enables us to spend time together as a family, and gives us a good excuse to get out of the house and go do something fun.


These are usually smaller items that can be purchased at face value. Sort of like going to the store, but all the merchandise is personalized for their likes. This is a favorite for my 3-year-old because it’s less overwhelming than shopping in an actual store.

The Bank

Just as it would in a real savings account, money that they choose to save rather than spend, gains interest. I double all of their savings at the end. Once they save up enough money, we do something big with it. It can be a trip to an amusement park, a family vacation, or expensive items they would not have been able to get at auction like tablets or laptops (depending on the age of your child).

I had originally thought that the temptation to spend their money sooner would be too much for my girls and that the bank would wind up being their least favorite option. I was surprised and happy to find that I was wrong. The girls were patient and determined to get their prize. Saving their money in our pretend bank taught them how to be more frugal in their spending habits. These are qualities I hope they will carry on in the future.

Cashing Out

This option may be more popular amongst older children who like to go out and be with their friends. My children are still little so they don’t cash out their paychecks very often. There are no extra incentives for using this method. It works the way it would in real life, you cash your check and receive real money in exchange.

You can opt out of this all together if you are unsure about giving your child actual cash. The money on their paychecks can also be used to represent points that earn them rewards.

Making Responsibility Fun and Easy 

The amount given for each accomplishment and the tasks themselves can be customized and changed to meet your family’s style and needs. Just remember to have fun. If you have a stubborn child who does not want to participate do not force them. What they earn each week, the amount of effort they put in, and the rewards they get are their choices to make. An allowance is merely incentive for them to make the right choices and to learn that being good and doing the right thing always pays off.


Written by Samantha Catalano

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