Should your child do chores to earn an allowance?

Few topics in personal finance evoke such strong emotions as the question of whether or not a kid’s allowance should be tied to chores. People have feelings about this.

I’ve heard many reasonable arguments on both sides of the debate. In the pro-chores camp: We all work for money, kids should learn to do the same. In the no-chores camp: I don’t get paid to wash the dishes, make my bed or rake the leaves. Kids’ should learn to do their share of housekeeping because they’re part of the family.

I’d like to offer an alternative point of view from Clifton Corbin’s recent book Your Kids, Their Money: A Parent’s Guide to Raising Financially Literate Children. Mr. Corbin, a financial literacy advocate with a background in business consulting, argues that the primary purpose of an allowance should be to teach kids about money. Just think of it as driving lessons, he writes.

“Consider small amounts of cash as their parking lot. A safe, confined space to make mistakes. … They are still holding the wheel, making financial decisions, but poor judgment will not cause damaging repercussions like missed bills or creditors starting to call.”

The allowance-for-chores approach becomes problematic when your child is fine with forgoing their pay, according to Mr. Corbin. You can’t fire them, so odds are you’ll be left to pick up the slack, and they won’t get to practice with their money. Kids should, of course, also learn about earning, but summer jobs can take care of that lesson, he writes.

Given my six-year-old’s track record of disdainfully declining candies for chores – simply talking to him about shared responsibility yields better results – I decided to go with Mr. Corbin’s approach. My kid has been getting $2 a week for a couple of months now, and his understanding of money has already made a huge leap forward.

Granted, I still get questions like: “Does our house cost more or less than $100?” But after a trip to the store in which he realized just how little he could buy with $5 (poor guy doesn’t know yet about the worst inflation rate in four decades), his grasp of smaller amounts of money has noticeably improved.

Case in point: The other day he asked if he could buy an upgraded spaceship for an aliens video game he’s been playing. When I pointed out the price tag – which was, I kid you not, $34 – he looked at me in shock. Without further ado, he closed the in-app purchase window, and that was the end of it.

It was a proud parenting moment.

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Callout alert

This Kitchener woman, 35, with zero debt dreams of buying a house. Although she has savings of $179,000, is finding the housing market too competitive in Kitchener and feels like she might have to rent for the rest of her life. Here’s our latest paycheque project, a non-judgemental look at how millennials and Gen Z’s are spending their monthly earning. If you would like to participate, send us an e-mail.

ICYMI

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