Parents have long debated the best way to handle allowance. Should kids earn money by doing chores, or should they receive it no matter what? (For this debate, we’re setting aside the argument that kids shouldn’t receive an allowance at all.) Some believe allowance should teach kids that money comes from hard work, while others argue it should be a tool for learning financial responsibility—not payment for household duties. So, what’s the best approach? Unsurprisingly, American parents are pretty evenly split on whether you should tie allowances to chores, and there are pros and cons to each side.
What the Numbers Say
A recent survey by T. Rowe Price looked at how parents are teaching their kids about money, including how much allowance the average parent is giving out. The survey showed that 79% of American parents give their kids an allowance—and 64% of those parents make their kids earn it. (Roughly 21% of those surveyed do not give their kids an allowance, but, again, we’re setting that option aside for this debate.)
There’s strong evidence for both sides, so in a way, those numbers make sense. A 2019 University of Michigan study found that children who earned their allowance were more likely to develop strong work ethics and financial responsibility later in life. But according to a 2021 Bankrate survey, 59% believe that household chores should be an expectation, not a paid task.
Allowance as Payment for Chores
Many parents tie allowances to chores, believing the practice teaches kids an early connection between work and money. The theory is that by mimicking real-world employers, parents can help kids develop a strong work ethic. So, long before taxes and time clocks, kids learn that effort leads to rewards. They also learn responsibility because—just like adults earning paychecks—their assigned tasks must be completed before they get paid.
However, this method has potential downsides. For one, the Chores-for-Money approach may lead to “negotiations.” Some kids might refuse to do chores if they don’t need the money. Plus, when only certain chores are tied to money, kids might start to think of those chores as their only household tasks—and assume everything else is someone else’s responsibility. In other words, the Chores-for-Money approach could send the wrong message by suggesting that helping around the house is optional rather than a shared family responsibility.
Allowance as a Learning Tool (Not Tied to Chores)
Alternatively, some parents prefer to treat allowance purely as a tool to teach money management, keeping it separate from household duties. In this approach, kids receive a set amount of money each week or month, regardless of chores. With that money, they learn to budget, save, and spend without a focus on earning.
Of course, there are still chores. But with an Allowance-No-Matter-What approach, kids contribute because they’re part of the household—not because they’re earning money. This helps keep chores rooted in family responsibility. It also avoids the common power struggles of “do it better or you won’t get paid.”
But this approach also has drawbacks. For one, it misses the lesson that money comes from work, so kids might not make the connection between effort and earnings. And, while parents don’t have to haggle over whether a chore was done “well enough” to earn money, the Allowance-No-Matter-What approach could lead to entitlement. When kids expect an allowance no matter what, they may not learn to appreciate its value.
A Middle Ground: Hybrid Approaches
If you can’t decide between the Allowance-No-Matter-What and Chores-for-Money approaches, try blending the two with a hybrid model. Many families find success with a blended approach, as it reinforces responsibility while introducing the idea of earning extra through effort and initiative. The beauty of the hybrid approach is that there’s no one-size-fits-all method. Families can tailor an approach to match their values, routines, and what motivates their kids. For example:
- Basic chores are expected, and extra work earns money. With this approach, kids do regular household and personal tasks (like cleaning their room) as unpaid family duties. Then, they can earn money by taking on additional responsibilities (e.g., washing the car, raking leaves).
- Allowance is separate, but deductions happen. Kids get a set allowance, but there is a clear expectation that basic household duties are non-negotiable. If the kids neglect those responsibilities, their allowance is reduced or paused—not as a punishment, but as a natural consequence.
- The Bonus System. Part of the allowance is guaranteed (e.g., $5 a week). The rest is “earned” by completing specific tasks or showing extra effort. You could even label the earned portion as a “bonus.”
There’s no universal right answer because every family is different. What is universal is the need for consistency, clear expectations, and ongoing conversations about managing work, responsibility, and money. After all, how we teach kids about money now can shape how they handle it in the future.
Want more tips on teaching kids money management skills?
- Discover some hands-on tips to help kids save, spend, and earn at any age.
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- Find out how to answer all those challenging questions kids ask about money.