Giving children an allowance

"What is the value of starting an allowance for our child? At what age? How much? Can it be a reward for doing chores?"

An allowance is one of many opportunities to help develop a child’s autonomy, self-esteem, and sense of responsibility, as well as to communicate a family’s values. An appreciation of the value of money and work is an essential part of growing up. How is money used in their domestic economy? To enforce chores? Reward school performance? In a relaxed or tense manner? Other than parental respect and affection, there are few tools as potent as money to help children and adolescents cultivate responsibility, patience, negotiation skills, and discipline.

The pediatrician can offer guidance rooted in knowledge of child development and behavioral principles on this issue. So, approach this opportunity enthusiastically if it comes up in an office visit or build it in to your approach to anticipatory guidance.

At what age should a child begin to get an allowance?

A child should be able to appreciate the value of money and be basically able to handle it in a simple transaction. Otherwise, a parent might as well be giving poker chips or stickers. Most children can retain the value of different coins and understand greater and lesser value by kindergarten or first grade. They should be able to consistently handle the essentials of addition and subtraction by second grade, so that they can figure out what their money would buy and add up change. Some children may be especially adroit at math, and thus interested in and able to handle an allowance earlier, and some may need a little extra time to be able to understand and manage an allowance.

When parents decide that the time is right for an allowance, they should have a conversation with their children to explain how much they will be receiving, when, and what it can be used for.

Should young children be able to spend their allowance?

There is little reason to give a child an allowance if it’s only for saving. (You might as well create a college fund that they can’t use, but could watch grow to illustrate compounding interest.) Being given some money tells the child that the parent is comfortable relinquishing this small bit of power and respects the child’s judgment. If 7-year-olds see a "two candy bars for a dollar" special in the supermarket, and they have a dollar of allowance, then it is up to them financially and nutritionally to make this choice.

Giving children some control does not mean that parents cannot be involved. An allowance provides the chance to let children learn about money, but children will learn more nuanced lessons if their parents are present to listen and reflect with them about the choices they face. Parents should be curious about what a child wants to buy, and talk with them about what they give up when they make any choice.

Beyond the piggy bank, parents might start a bank account in their child’s name. This way, they can delay or facilitate a purchase, as young children will need a parent to help them with a withdrawal. In a split system, where half of a child’s allowance goes into a bank account and half can be spending money, children can watch just how much they save, and compare it to what they may have to show for the money they have spent on themselves or for a holiday gift. In this way, money provides both the material and the reward for teaching children about the value of patience and self-control.

Once children are old enough to have unsupervised time outside of school and home, such as time at a mall or walking to town with friends, they will likely want (and possibly need) some money to spend. Depending on the location and child’s personality, this usually happens around sixth grade. It’s helpful if they have already had a small allowance and been introduced to the value of saving. But if not, this is a good time to begin an allowance rather than simply handing a child pocket money every time he or she goes somewhere with friends. Parents should consider with their children how to use this money (snacks, bus fare, etc.), but stepping back and allowing their children to then manage it on their own is a powerful way to support healthy independence. Times have changed and bus fare and a daily snack can be used to estimate a starting sum.

With older children and adolescents, having an allowance also can help build negotiation skills, whether they want a "raise" or want to purchase something large. Negotiating is a part of every relationship, provides a respectful nudge to autonomy, and contributes to the development of flexibility and listening skills. Negotiations may include added work like raking leaves, making the item a gift for a future holiday, or a reward for reasonable school performance. Parents don’t have to agree to an offer from their child, but can still admire their negotiation effort and model the same in good faith.

Should allowance be a reward for work or contingent on chores?

Children can understand the value of helping out and doing their share at home even before they can understand math, and it is often meaningful for chores to be established quite early, so that children grow up appreciating the value of what they do as well as who they are. Allowance is not a salary in this case; the reward for chores is that children feel they are contributing members of the family. But withholding allowance might still be a punishment, alongside losing dessert or time on the computer.

Some families have a two-level allowance. One for "breathing," a baseline for the child to have some discretion over money, and more for work done that is above and beyond their routine chores. This works especially well for teenagers who have routine expenses (school lunch, the bus), but can negotiate for more, perhaps saving the family the time or cost of mowing the lawn or shoveling snow. Teenagers can learn the value of a dollar earned, without having to work a half-time job (which has been shown to substantially imperil school performance). Responsibility and meaningful self-confidence come from being given control over money, having your judgment respected, saving for a future goal, negotiating reasonably, and earning larger sums for real work.

Some families may object: "Money for breathing! I had to work for every nickel, and my parents would have laughed in my face if I asked for that." Money is among the most sensitive topics in a family’s life and is a leading cause of discord and divorce. So the allowance discussion is an opportunity to assess the parents’ perspectives. Ask how money was handled in their families of origin. Were they poor growing up? Was money an instrument of control? Of tension between their parents? Do they often argue on how much to spend or what purchases are appropriate? Ask the parents to consider what values they want to keep from their past, and how they would like their own children to grow up learning about money, so that they can come to an agreement on an allowance plan. Values ("even if we have the money, spending that much on shoes is inconsistent with how we think money should be used") rather than control is the optimal approach.

How much is the right amount?

There is no single answer to this question. Consider the age of the child, the family’s finances, the values to be transmitted, and the child’s usual expenses. Also consider the developmental stage and personality of the individual child. Teenagers pose the biggest challenge. Consider a family of means with a teenage daughter who is very self-restrictive. Even with parental encouragement she would not buy herself a reasonably priced souvenir sweatshirt while at a concert. Here a higher allowance is a chance to say, "We believe this is a fair amount to spend on yourself, please do so, you deserve it." For a teenager who is more impulsive and irresponsible in spending, a more modest allowance would be appropriate. This would provide for lunch, snacks, and some autonomy on weekends, but real work would be needed to spend at higher levels. Parents should be open to adjustments as expenses go up with age, particularly as teenagers are learning to drive, and realistically decide what is "included" or the expectations for the allowance.

An allowance is one way to teach about money, to model the values of the family, to course correct some patterns from the past, to help the child learn how to plan, and to provide a key step to the independent functioning needed for college and early adulthood. Parents can demonstrate by their words and their own actions that money is a means to an end, not an end in itself, and that "the best things in life are free."

Dr. Swick is an attending psychiatrist in the division of child psychiatry at Massachusetts General Hospital, Boston, and director of the Parenting at a Challenging Time (PACT) program at the Vernon Cancer Center at Newton Wellesley Hospital, also in Boston. Dr. Jellinek is professor of psychiatry and of pediatrics at Harvard Medical School, Boston. He is chief clinical officer at Partners HealthCare, also in Boston. E-mail Dr. Swick and Dr. Jellinek at pdnews@frontlinemedcom.com.

"What is the value of starting an allowance for our child? At what age? How much? Can it be a reward for doing chores?"

An allowance is one of many opportunities to help develop a child’s autonomy, self-esteem, and sense of responsibility, as well as to communicate a family’s values. An appreciation of the value of money and work is an essential part of growing up. How is money used in their domestic economy? To enforce chores? Reward school performance? In a relaxed or tense manner? Other than parental respect and affection, there are few tools as potent as money to help children and adolescents cultivate responsibility, patience, negotiation skills, and discipline.

The pediatrician can offer guidance rooted in knowledge of child development and behavioral principles on this issue. So, approach this opportunity enthusiastically if it comes up in an office visit or build it in to your approach to anticipatory guidance.

At what age should a child begin to get an allowance?

A child should be able to appreciate the value of money and be basically able to handle it in a simple transaction. Otherwise, a parent might as well be giving poker chips or stickers. Most children can retain the value of different coins and understand greater and lesser value by kindergarten or first grade. They should be able to consistently handle the essentials of addition and subtraction by second grade, so that they can figure out what their money would buy and add up change. Some children may be especially adroit at math, and thus interested in and able to handle an allowance earlier, and some may need a little extra time to be able to understand and manage an allowance.

When parents decide that the time is right for an allowance, they should have a conversation with their children to explain how much they will be receiving, when, and what it can be used for.

Should young children be able to spend their allowance?

There is little reason to give a child an allowance if it’s only for saving. (You might as well create a college fund that they can’t use, but could watch grow to illustrate compounding interest.) Being given some money tells the child that the parent is comfortable relinquishing this small bit of power and respects the child’s judgment. If 7-year-olds see a "two candy bars for a dollar" special in the supermarket, and they have a dollar of allowance, then it is up to them financially and nutritionally to make this choice.

Giving children some control does not mean that parents cannot be involved. An allowance provides the chance to let children learn about money, but children will learn more nuanced lessons if their parents are present to listen and reflect with them about the choices they face. Parents should be curious about what a child wants to buy, and talk with them about what they give up when they make any choice.

Beyond the piggy bank, parents might start a bank account in their child’s name. This way, they can delay or facilitate a purchase, as young children will need a parent to help them with a withdrawal. In a split system, where half of a child’s allowance goes into a bank account and half can be spending money, children can watch just how much they save, and compare it to what they may have to show for the money they have spent on themselves or for a holiday gift. In this way, money provides both the material and the reward for teaching children about the value of patience and self-control.

Once children are old enough to have unsupervised time outside of school and home, such as time at a mall or walking to town with friends, they will likely want (and possibly need) some money to spend. Depending on the location and child’s personality, this usually happens around sixth grade. It’s helpful if they have already had a small allowance and been introduced to the value of saving. But if not, this is a good time to begin an allowance rather than simply handing a child pocket money every time he or she goes somewhere with friends. Parents should consider with their children how to use this money (snacks, bus fare, etc.), but stepping back and allowing their children to then manage it on their own is a powerful way to support healthy independence. Times have changed and bus fare and a daily snack can be used to estimate a starting sum.

With older children and adolescents, having an allowance also can help build negotiation skills, whether they want a "raise" or want to purchase something large. Negotiating is a part of every relationship, provides a respectful nudge to autonomy, and contributes to the development of flexibility and listening skills. Negotiations may include added work like raking leaves, making the item a gift for a future holiday, or a reward for reasonable school performance. Parents don’t have to agree to an offer from their child, but can still admire their negotiation effort and model the same in good faith.

Should allowance be a reward for work or contingent on chores?

Children can understand the value of helping out and doing their share at home even before they can understand math, and it is often meaningful for chores to be established quite early, so that children grow up appreciating the value of what they do as well as who they are. Allowance is not a salary in this case; the reward for chores is that children feel they are contributing members of the family. But withholding allowance might still be a punishment, alongside losing dessert or time on the computer.

Some families have a two-level allowance. One for "breathing," a baseline for the child to have some discretion over money, and more for work done that is above and beyond their routine chores. This works especially well for teenagers who have routine expenses (school lunch, the bus), but can negotiate for more, perhaps saving the family the time or cost of mowing the lawn or shoveling snow. Teenagers can learn the value of a dollar earned, without having to work a half-time job (which has been shown to substantially imperil school performance). Responsibility and meaningful self-confidence come from being given control over money, having your judgment respected, saving for a future goal, negotiating reasonably, and earning larger sums for real work.

Some families may object: "Money for breathing! I had to work for every nickel, and my parents would have laughed in my face if I asked for that." Money is among the most sensitive topics in a family’s life and is a leading cause of discord and divorce. So the allowance discussion is an opportunity to assess the parents’ perspectives. Ask how money was handled in their families of origin. Were they poor growing up? Was money an instrument of control? Of tension between their parents? Do they often argue on how much to spend or what purchases are appropriate? Ask the parents to consider what values they want to keep from their past, and how they would like their own children to grow up learning about money, so that they can come to an agreement on an allowance plan. Values ("even if we have the money, spending that much on shoes is inconsistent with how we think money should be used") rather than control is the optimal approach.

How much is the right amount?

There is no single answer to this question. Consider the age of the child, the family’s finances, the values to be transmitted, and the child’s usual expenses. Also consider the developmental stage and personality of the individual child. Teenagers pose the biggest challenge. Consider a family of means with a teenage daughter who is very self-restrictive. Even with parental encouragement she would not buy herself a reasonably priced souvenir sweatshirt while at a concert. Here a higher allowance is a chance to say, "We believe this is a fair amount to spend on yourself, please do so, you deserve it." For a teenager who is more impulsive and irresponsible in spending, a more modest allowance would be appropriate. This would provide for lunch, snacks, and some autonomy on weekends, but real work would be needed to spend at higher levels. Parents should be open to adjustments as expenses go up with age, particularly as teenagers are learning to drive, and realistically decide what is "included" or the expectations for the allowance.

An allowance is one way to teach about money, to model the values of the family, to course correct some patterns from the past, to help the child learn how to plan, and to provide a key step to the independent functioning needed for college and early adulthood. Parents can demonstrate by their words and their own actions that money is a means to an end, not an end in itself, and that "the best things in life are free."

Dr. Swick is an attending psychiatrist in the division of child psychiatry at Massachusetts General Hospital, Boston, and director of the Parenting at a Challenging Time (PACT) program at the Vernon Cancer Center at Newton Wellesley Hospital, also in Boston. Dr. Jellinek is professor of psychiatry and of pediatrics at Harvard Medical School, Boston. He is chief clinical officer at Partners HealthCare, also in Boston. E-mail Dr. Swick and Dr. Jellinek at pdnews@frontlinemedcom.com.

"What is the value of starting an allowance for our child? At what age? How much? Can it be a reward for doing chores?"

An allowance is one of many opportunities to help develop a child’s autonomy, self-esteem, and sense of responsibility, as well as to communicate a family’s values. An appreciation of the value of money and work is an essential part of growing up. How is money used in their domestic economy? To enforce chores? Reward school performance? In a relaxed or tense manner? Other than parental respect and affection, there are few tools as potent as money to help children and adolescents cultivate responsibility, patience, negotiation skills, and discipline.

The pediatrician can offer guidance rooted in knowledge of child development and behavioral principles on this issue. So, approach this opportunity enthusiastically if it comes up in an office visit or build it in to your approach to anticipatory guidance.

At what age should a child begin to get an allowance?

A child should be able to appreciate the value of money and be basically able to handle it in a simple transaction. Otherwise, a parent might as well be giving poker chips or stickers. Most children can retain the value of different coins and understand greater and lesser value by kindergarten or first grade. They should be able to consistently handle the essentials of addition and subtraction by second grade, so that they can figure out what their money would buy and add up change. Some children may be especially adroit at math, and thus interested in and able to handle an allowance earlier, and some may need a little extra time to be able to understand and manage an allowance.

When parents decide that the time is right for an allowance, they should have a conversation with their children to explain how much they will be receiving, when, and what it can be used for.

Should young children be able to spend their allowance?

There is little reason to give a child an allowance if it’s only for saving. (You might as well create a college fund that they can’t use, but could watch grow to illustrate compounding interest.) Being given some money tells the child that the parent is comfortable relinquishing this small bit of power and respects the child’s judgment. If 7-year-olds see a "two candy bars for a dollar" special in the supermarket, and they have a dollar of allowance, then it is up to them financially and nutritionally to make this choice.

Giving children some control does not mean that parents cannot be involved. An allowance provides the chance to let children learn about money, but children will learn more nuanced lessons if their parents are present to listen and reflect with them about the choices they face. Parents should be curious about what a child wants to buy, and talk with them about what they give up when they make any choice.

Beyond the piggy bank, parents might start a bank account in their child’s name. This way, they can delay or facilitate a purchase, as young children will need a parent to help them with a withdrawal. In a split system, where half of a child’s allowance goes into a bank account and half can be spending money, children can watch just how much they save, and compare it to what they may have to show for the money they have spent on themselves or for a holiday gift. In this way, money provides both the material and the reward for teaching children about the value of patience and self-control.

Once children are old enough to have unsupervised time outside of school and home, such as time at a mall or walking to town with friends, they will likely want (and possibly need) some money to spend. Depending on the location and child’s personality, this usually happens around sixth grade. It’s helpful if they have already had a small allowance and been introduced to the value of saving. But if not, this is a good time to begin an allowance rather than simply handing a child pocket money every time he or she goes somewhere with friends. Parents should consider with their children how to use this money (snacks, bus fare, etc.), but stepping back and allowing their children to then manage it on their own is a powerful way to support healthy independence. Times have changed and bus fare and a daily snack can be used to estimate a starting sum.

With older children and adolescents, having an allowance also can help build negotiation skills, whether they want a "raise" or want to purchase something large. Negotiating is a part of every relationship, provides a respectful nudge to autonomy, and contributes to the development of flexibility and listening skills. Negotiations may include added work like raking leaves, making the item a gift for a future holiday, or a reward for reasonable school performance. Parents don’t have to agree to an offer from their child, but can still admire their negotiation effort and model the same in good faith.

Should allowance be a reward for work or contingent on chores?

Children can understand the value of helping out and doing their share at home even before they can understand math, and it is often meaningful for chores to be established quite early, so that children grow up appreciating the value of what they do as well as who they are. Allowance is not a salary in this case; the reward for chores is that children feel they are contributing members of the family. But withholding allowance might still be a punishment, alongside losing dessert or time on the computer.

Some families have a two-level allowance. One for "breathing," a baseline for the child to have some discretion over money, and more for work done that is above and beyond their routine chores. This works especially well for teenagers who have routine expenses (school lunch, the bus), but can negotiate for more, perhaps saving the family the time or cost of mowing the lawn or shoveling snow. Teenagers can learn the value of a dollar earned, without having to work a half-time job (which has been shown to substantially imperil school performance). Responsibility and meaningful self-confidence come from being given control over money, having your judgment respected, saving for a future goal, negotiating reasonably, and earning larger sums for real work.

Some families may object: "Money for breathing! I had to work for every nickel, and my parents would have laughed in my face if I asked for that." Money is among the most sensitive topics in a family’s life and is a leading cause of discord and divorce. So the allowance discussion is an opportunity to assess the parents’ perspectives. Ask how money was handled in their families of origin. Were they poor growing up? Was money an instrument of control? Of tension between their parents? Do they often argue on how much to spend or what purchases are appropriate? Ask the parents to consider what values they want to keep from their past, and how they would like their own children to grow up learning about money, so that they can come to an agreement on an allowance plan. Values ("even if we have the money, spending that much on shoes is inconsistent with how we think money should be used") rather than control is the optimal approach.

How much is the right amount?

There is no single answer to this question. Consider the age of the child, the family’s finances, the values to be transmitted, and the child’s usual expenses. Also consider the developmental stage and personality of the individual child. Teenagers pose the biggest challenge. Consider a family of means with a teenage daughter who is very self-restrictive. Even with parental encouragement she would not buy herself a reasonably priced souvenir sweatshirt while at a concert. Here a higher allowance is a chance to say, "We believe this is a fair amount to spend on yourself, please do so, you deserve it." For a teenager who is more impulsive and irresponsible in spending, a more modest allowance would be appropriate. This would provide for lunch, snacks, and some autonomy on weekends, but real work would be needed to spend at higher levels. Parents should be open to adjustments as expenses go up with age, particularly as teenagers are learning to drive, and realistically decide what is "included" or the expectations for the allowance.

An allowance is one way to teach about money, to model the values of the family, to course correct some patterns from the past, to help the child learn how to plan, and to provide a key step to the independent functioning needed for college and early adulthood. Parents can demonstrate by their words and their own actions that money is a means to an end, not an end in itself, and that "the best things in life are free."

Dr. Swick is an attending psychiatrist in the division of child psychiatry at Massachusetts General Hospital, Boston, and director of the Parenting at a Challenging Time (PACT) program at the Vernon Cancer Center at Newton Wellesley Hospital, also in Boston. Dr. Jellinek is professor of psychiatry and of pediatrics at Harvard Medical School, Boston. He is chief clinical officer at Partners HealthCare, also in Boston. E-mail Dr. Swick and Dr. Jellinek at pdnews@frontlinemedcom.com.