By Marcia Hall

For many families, using an allowance to encourage children to do chores is an effective means of both teaching responsibility and money management. For other families, linking chores to an allowance means that the children only learn to help out around the house in exchange for payment. It is important for parents to sit down and talk about what they hope their children learn from the experience of getting an allowance. Here are three common methods you may wish to consider implementing:

The “You’re Part of the Family” Strategy

This strategy will work well for a family that considers all members equal partners in making the family work. You start by pointing out that each adult member of the family plays a very important role in creating harmony in the family dynamic. Every adult has a job, and the same is true for children. In order to keep the household organized and effective in all that is done, everyone has certain jobs to do, so everyone also receives a certain amount of money that they can use at their discretion. This strategy hinges on a few things: adult family members must always set a good example when it comes to their own chores, and the chores given to a child must bring him closer to the whole family. Family work days are effective ways of making this strategy work. The downfall of this strategy is that it can often be harder to track what, when and how well a child completes his given tasks.

The “Must Work for Your Pay” Technique

This technique links each separate job with an amount of pay. The benefit of this style is that it can make keeping track of completed tasks much easier. To make this work, very clear expectations must be set both with a timetable and in regards to how to correctly carry out each task. The downside is that since the children link a task to a certain amount of money, they may decide the amount is not worth the work required to complete the task. This can cause friction and frustration with parents and children.

The “Request as Needed” Method

This method involves you allowing your child to make requests to you for the things he wants, which can allow you to help your child verbalize why what he wants is important to him. It also builds his ability to negotiate and be persuasive. The downside of this method, however, is that you will constantly be having your child ask for and negotiate for what he wants. With this method you can decide if you will link a chore to the money requested or if you will simply ask the child to do work based on being part of the family.

Whatever method you use, there are some universal tips for every allowance strategy:

• Help your child learn to give and save by encouraging her to put 1/3 in a savings jar, 1/3 in a giving jar where she chooses where that money will go every so often, and 1/3 in a spending jar that she can use whenever she wants.
• Begin early. Most experts suggest beginning to help children work with their own money around the time they enter Kindergarten.
• You will need to clearly define that allowance money goes to what your child wants and not what she needs.
• Raises should be given at birthdays and can also be linked to an increase in responsibilities.
• Keep good track of responsibilities completed so that confusion and arguments do not occur over the job being completed.
• As a child grows, it is OK to give extra money for larger jobs completed, like bigger seasonal work around the house.

Learning to work with money is an important childhood milestone. Giving an allowance can be a positive event that brings the family together instead of creating arguments.

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