LET’S TALK ALLOWANCE

May 27

5 min read

Practicing With Money Matters More Than Getting It “Perfect”

by FINANCIAL KID Academy

Teaching kids about money doesn’t have to be perfect.

Allowance can help kids practice real-life money skills in small, safe ways, like saving, making choices, learning patience, and understanding responsibility. Whether your family uses chores, allowance, or a mix of both, the goal is building confidence over time through conversation and practice.

SHOULD ALLOWANCE BE TIED TO CHORES?

This is one of the biggest questions parents debate.

Some families:

Pay for chores
Give a fixed allowance
Use a mix of both

The truth? There probably isn’t one perfect system.

What matters most is:

consistency,
conversation,
and giving kids opportunities to practice handling money.

Kids learn by:

making choices,
spending too quickly sometimes,
saving toward goals,
learning patience,
and practicing responsibility.

COMMON ALLOWANCE SYSTEMS

SYSTEM	HOW IT WORKS	MAIN LESSONS
Fixed Allowance: In this system: chores are expected because everyone contributes to the family, allowance is mainly for practicing budgeting and money decisions. This approach helps separate: family responsibility, from: learning how to manage money.	Kids receive a set amount weekly regardless of chores.	Managing money consistently budgeting practice learning delayed gratification watching savings “grow” making spending choices
Chore-for-Pay ("commission system") In this system: Kids earn money only when they complete certain jobs, not entitlement-based allowance The downside? Sometimes kids start asking: “Do I get paid for THAT too?”	Kids earn money for completed tasks	Responsibility Connecting work and earning Motivation Effort and reward Understanding that money is earned
Hybrid System ⭐ This system combines both approaches: Kids have expected household responsibilities, AND optional extra jobs to earn additional money. This tends to create a healthy balance between: contributing to the household, and learning how earning works.	Family chores + optional paid jobs	Responsibility Connecting work and earning Teamwork Earning opportunities Balance between contribution and reward
3 Jar Method Spend, Save, Give. Kids divide their money into: a spending jar, a savings jar, and a giving jar.	Divide money into Spend / Save / Give	Budgeting visually goal setting saving habits generosity learning trade-offs and priorities

OUR FAVOURITE: THE HYBRID SYSTEM ⭐

The Hybrid System keeps family responsibility and earning opportunities separate and balanced.

And, Honestly? For many families, this is probably the easiest system to maintain long term.

FAMILY CONTRIBUTION CHORES

These are chores that help the household run smoothly and teach kids responsibility, teamwork, and independence.

Morning & Getting Ready	During the Day	Evening & Cleanup
☐ Make bed	☐ Put shoes, coats and backpack away	☐ Help set the table
☐ Get dressed & put pajamas away	☐ Refill pet water bowls	☐ Wipe the table after meals
☐ Clear dishes	☐ Clear lunch bags	☐ Clear dishes
☐ Feed pets	☐ Read for 10 minutes daily	☐ Put dirty clothes in hamper
☐ Help pack lunches and fill waterbottle	☐ Help younger sibling with cleanup	☐ Match socks/fold simple laundry ☐ Put away laundry
☐ Pack school bag (remember all homework & assignments!)	☐ Sweep small messes	☐ Tidy room
	☐ Bring garbage/recycling bins in	☐ Put toys/books back where they belong
	☐ Clean up after crafts or activities

BONUS JOBS (PAID)

These are “above and beyond” jobs kids can choose to earn extra money.

Examples:

☐ Wash the car	☐ Pull weeds	☐ Vacuum
☐ Organize toys to donate	☐ Help with yard work	☐ Babysit younger sibling
☐ Rake leaves	☐ Shovel snow	☐ Wash windows
☐ Help clean out the garage	☐ Organize bookshelves	☐ Deep clean toys or playroom
☐ Help wash the family pet	☐ Help clean the car interior

One of Our Favourite Ideas for BONUS Pay

One simple idea we love is:

earning $1 (or another small set amount) for reading a book,
OR
earning money after reading consistently throughout the week.

It helps connect:

learning,
consistency,
confidence,
and positive habits.

And honestly?

Let's help kids get excited watching their reading skills, knowledge, AND their savings

grow at the same time.

SUGGESTED ALLOWANCE BY AGE

(General guideline only — consistency matters more than the amount.)

AGE	SUGGESTED WEEKLY ALLOWANCE	MAIN FOCUS
4–5	$1–2	Learning coins, saving jars, simple choices
6–7	$3–5	Needs vs. wants, patience, spending choices
8–10	$5–10	Goal saving, budgeting, delayed gratification
11–13	$10–15	Planning purchases, comparison shopping, independence
Teen	Flexible	Real-world budgeting, saving goals, managing larger purchases

One important reminder: there’s no “perfect” amount.

THE MOST IMPORTANT PART ISN’T THE MONEY

It’s the conversation.

Some of the best financial literacy moments happen naturally:

“Was that worth buying?”
“Do you want to save longer?”
“What’s your goal?”
“How did it feel spending all your money right away?”
“What would you do differently next time?”

The goal isn’t raising kids who are obsessed with money.

The goal is raising kids who:

understand choices,
learn patience,
practice responsibility,
and feel confident making decisions as they grow.

Sources & References

Mydoh Allowance Guide – Resources and research-based guidance on teaching kids money management, allowance systems, saving habits, and financial independence through hands-on practice.
https://www.mydoh.ca/learn/money-tips-for-kids/
Kids’ Money – Three Jar Method – Educational resources explaining the “Spend, Save, Give” method for teaching children budgeting, saving, and generosity using visual systems.
https://www.kidsmoney.org/parents/money-management/three-jar-method/
Parents.com – Allowance vs. Chores Discussions – Parenting perspectives and expert commentary on different allowance systems, including fixed allowance, chore-for-pay, and hybrid approaches.
https://www.parents.com/parenting/better-parenting/advice/how-to-teach-kids-about-money-before-high-school/
Ramsey Solutions Parenting Resources – Financial education resources discussing chore commissions, responsibility, work ethic, and practical ways to teach kids about money.
https://www.ramseysolutions.com/relationships/teaching-your-kids-about-money
NestSync Financial Literacy Summary – Summary and discussion of research related to children’s financial habits and the importance of early money conversations.
https://nestsync.org/blog/family-allowance-system-kids-money/
T. Rowe Price Parenting & Money Resources – Research and family guidance around teaching children financial confidence, saving habits, and goal setting.
https://www.troweprice.com/personal-investing/resources/planning/financial-education-for-kids.html

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