How much allowance should we give our kids?

How much allowance should we give our kids?

Our recent Youth Economy Report found that GoHenry children earned a whopping $26 billion throughout 2021. This came from regular allowance payments, gifts, and rewards for the completion of chores. The same report found that children’s weekly earnings have gone up to $11.17 on average, a 16% increase compared to the year before. Surprisingly, kids' allowance payments have risen substantially more than the average weekly wage growth for adults.

 

But how much allowance is the right amount? Should you even give your kids an allowance for doing chores? We’ve looked at a range of sources and feedback from parents to give you the lowdown on allowances, to help you decide how much money is right for your kids.

What is an allowance for?

Perhaps think about this before you consider anything else. Is an allowance a reward for chores you set or is it a regular allowance?

 

Allowances have many pros and some cons and are given for a variety of reasons. They are often awarded by parents or grandparents. Allowance can be used by children to spend on items they need or want. An allowance can be saved up in order to buy things that cost a larger sum of money such as big-ticket items like laptops, phones, or bikes.

 

Just as adults organize their finances around payday, children also get used to managing their money when it’s paid regularly. To help children get used to managing a budget, many parents find it helpful to pay the allowance on a weekly basis. The GoHenry Youth Economy Report highlights that the most popular day of the week for receiving allowances is Friday.

 

But when and how often you give an allowance is your decision to make. Apps like GoHenry enable you to set up scheduled payments so you don’t have to remember to keep exact amounts of cash at hand. With online money apps, you can also amend payments, stop them altogether or pay extra at the click of a button. Plus, the allowance you give your kids via GoHenry goes straight onto their prepaid debit card, which keeps their money somewhere that they can't lose it.

When should I start giving an allowance?

A big question for many families is when to start giving an allowance. There are no set rules as to when you should start giving an allowance to your children. It very much depends on your family, your means, and your motivation. Giving an allowance can stem from wanting to teach children about the value of money and that it doesn't ‘grow on trees’. It's also a way of teaching your children about the benefits of saving, which can be a difficult concept for younger children to grasp.

 

Research by behavior experts at Cambridge University reveals that most children can recognize the value of money and understand the link between earning money and income by the age of seven. By this age, most kids can plan ahead, delay decisions, and understand that some choices are permanent. By starting an allowance before this age, you can kick-start their financial education and begin shaping their money habits in a positive way.

How much allowance by age

According to GoHenry’s Youth Economy Report the amount of allowance given generally rises with age. Here are 2021 weekly averages for the US. It’s worth noting that whilst these figures are averages, allowances enable children to learn about earning, saving, and spending. The amount given is less important than the purpose it serves.

  • Age 7: $5.06
  • Age 8: $5.17
  • Age 9: $5.75
  • Age 10: $6.45
  • Age 11: $7.31
  • Age 12: $8.65
  • Age 13: $10.33
  • Age 14: $12.22
  • Age 15: $13.42
  • Age 16: $15.40
  • Age 17: $16.85
  • Age 18: $16.34

Remember, these are averages and just a guideline. How much you choose to give is based on what you can afford and what you think is fair. Paying your children regular allowance money is more important than the amount you give. Teaching them how to manage that regular payment, no matter how big or small, enables kids to learn about saving, spending, and budgeting from a young age.

How much allowance should I give per chore?

You're not going to reward a 6-year-old for picking up toys in the same way you'd reward a 10-year-old for making their bed and a 15-year-old for mowing the lawn/washing the car. However, it's useful to have an idea of how much other parents are spending per chore.

 

The GoHenry Youth Economy Report is a handy compilation of all things allowance related. It will help you decide what chores are worth and which chores are popular.

 

  1. Tidying room – earns an average of $1.67
  2. Doing homework – earns an average of $1.93
  3. Loading or unloading the dishwasher – earns an average of $1.23
  4. Make the bed – earns an average of $0.97
  5. Doing the laundry – earns an average of $1.48
  6. Vacuuming – earns an average of $1.55
  7. Emptying bins – earns an average of $1.14
  8. Feeding pets – earns an average of $1.21
  9. Washing the dishes – earns an average of $1.79
  10. Reading daily - earns an average of $1.36

How much allowance can you afford?

Everyone is going to have different ideas about how much allowance money is enough. The latest GoHenry Youth Report shows that even though kids’ weekly allowances have increased by up to 13% since 2020, at least 4 in 10 kids say that they’re still not earning enough.

 

If you're already paying for clothes, trips to the cinema, and other treats, consider whether you're going to factor these into the amount of allowance you give. It might not be feasible to give an allowance and treats. Giving an amount that addresses money for necessities and treats can help children learn to budget from a young age.

 

When you are deciding how much allowance is right for your children, think about how much you are happy for them to spend and whether you want them to save. It doesn’t matter if they’re using a piggy bank or an online money app, they can still put money away for a rainy day.

Budget for your children's wants vs needs

Understanding wants and needs takes patience and practice. Recognizing that what we spend today will mean less tomorrow. This can become a lesson learned when savings are spent.

 

When deciding how much allowance money you’re prepared to give, include your children in the conversation. Be clear on what will be funded by you and what they’ll be expected to pay for. This will not only teach them early budgeting skills, it may even potentially change the way they spend their money. If sweets and gadgets become their financial responsibility, buying both might not seem as necessary anymore.

Set out conditions such as the completion of chores to earn an allowance

How and why allowances are given comes down to individual choice and what works best for your family.

 

An allowance can be given as a reward for completing a set of given tasks. Pairing the payment of allowances with finishing household chores can teach children that money needs to be earned and that hard work pays off.

 

Have a list on the fridge of the chores that are set. This way children can see what the expectations are and ensure they do each job. Alternatively, you can set up chores lists on apps such as GoHenry. This way children can virtually tick off their chores as they finish them.

Discover how easy it is to set up allowance payments with GoHenry

Most of us are carrying much less cash around than we used to. When our children stand in front of us expecting an allowance or payment for a job well done, we might not always have the correct money in our pockets. If you use an allowance app, getting that payment to your kids only involves the click of a button.

 

Only you can decide if you can afford to give your kids an allowance and what amount this is going to be. We recommend that you set out a clear plan as to how you expect allowance money to be earned and set agreed goals about budgeting and saving. An online GoHenry account can support your children as they navigate the world of money while giving them the freedom and independence to manage their cash in a fulfilling way as they prepare for adulthood.

 

Find out more about our allowance feature today with the GoHenry kids debit card.

 

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Written by GoHenry Published Sep 21, 2022 ● 5 min. read