Teach the value of earning with chores and allowances

59% of parents want their kids to understand the meaning of working for money — but how? Chores and allowance = a good place to start.

Choosing to pay an allowance is a personal decision for every family. First step: Consider your goals. The purpose of an allowance is more than just giving kids financial freedom. An allowance is an opportunity to practice real-world money management — and make mistakes with parent guardrails in place.

How much? How often?

While there are no official rules, age 5 or 6 is an average starting line to receive an allowance. When they get older, they get wiser (and usually get more money). Remember your goal? It will evolve as your kids grow up. In the early days, the takeaway lesson will be simple: You can buy this or this. But you have to save up for that.

Once they get the hang of the basics, you can go deeper with budgeting. Use your app to automatically divvy up their earnings to save, spend wisely, give and even invest. You can also use it to encourage a good work ethic like tying allowance to chores (more on that later).

Teach older kids and teens about trade-offs. Decide what they need to pay for with their allowance and assign categories. Maybe 10% of their allowance is just for meals out — or maybe they no longer live totally “rent-free” (hey, they do use a lot of water!). They can also save up for a big milestone, like their first car or a new laptop. The goal is to show them short and long-term financial planning.

Make family finances fun!

Make family finances fun!

With Greenlight’s award-winning debit card and app for kids and teens, financial literacy is one step away.

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Here’s a breakdown of what Greenlight kids average each week:

Now that you’ve decided how much, the next question is: How often? Try weekly for younger kids and beginners. They may have trouble making their money last longer than a few days. Then, switch to giving your kids a monthly allowance when they’re older. This will teach them to budget their money over a longer period of time.

The hot debate: Earning vs. getting an allowance

According to a T.Rowe Price survey, the majority of kids (59%) have to earn their allowance. Only 16% of families give their kids an allowance with no conditions. And another 25% of families don’t give allowances at all.

Many parents are divided on whether it’s a good idea to tie allowance to chores or grades. Let’s take a look at a few schools of thought on this.

• Tie to chores, yes: Some parents believe this teaches a good work ethic. Instead of one-and-done, they’ll ask, “what’s next?”

• Tie to chores, no: Kids could decide to skip chores if they don’t need money. These parents may think: “Grown-ups don’t get paid to do housework, so why should kids?”

• Pay for grades, yes: This practice can teach kids that good work leads to exciting rewards. (Just like their future bonus!)

• Pay for grades, no: It could be tricky for kids who genuinely struggle academically.

If you want to start paying your kids but you’re hesitant, try this: Set up recurring chores that are easy to complete (Think: doing the dishes or taking out the trash). Then, add extra one-time jobs to teach them about taking initiative. How? You’ll post a job — like “Wash the car” or “Rake leaves.” They can claim it, complete it and earn money. It’ll show them that going the extra mile pays off.

Julie Lythcott-Haims, the author of How to Raise an Adult, gave an interesting TED Talk about setting the right priorities for kids. Here’s a key takeaway: “Professional success in life comes from having done chores as a kid.”

We think chores are important too, which is why we love that families use their Greenlight apps to tidy the house, do laundry, walk the pup and more. Haven’t tried yet? Let’s walk through it.

Which chores do I choose?

All families are different, which means their chore routines are different too. Chore schedules can start early on with household tasks. Then, add more responsibility as they get older, like sending your teen driver to run errands.

For our Greenlight families, the five most popular chores are:

1. Clean your bedroom

2. Take care of the pet

3. Take out the trash

4. Wash the dishes

5. Read

Although these are the top 5, Greenlight families aren’t afraid to get creative with their chores (you can customize them in your app). We’ve seen everything from “Tell mom she’s awesome” to “Wear deodorant” to “Work on your attitude.” Check. Check. Aaaaand check.

Setting up chores and allowance with Greenlight

When it comes to paying an allowance, there’s one thing we can all agree on: It shouldn’t be complicated. Remembering to get cash at the grocery store or finding an ATM is a hassle, so we made it easier on parents AND kids. You can schedule and automate allowance and chores in your Greenlight app. 

First, set up a chore schedule. Assign chores that repeat once a week — or several times a week. Want to sweeten the deal? Add extra earning opportunities with one-time jobs for bigger tasks like spring cleaning, babysitting or mowing the lawn.

To give your kids full visibility of their chore schedule, make sure they and check off their chores as they finish them. If they fall behind on chores, we’ll give them a nudge with chore reminders (so you don’t have to).

From the child dashboard, parents can keep track of chore progress and put their allowance on autopilot — if you choose to pay them.

Ready to connect chores and allowance? We’ve created flexible options for teaching kids about the value of money and hard work, no matter how your family chooses to learn together. Here are a few ways you can pay out their weekly, biweekly or monthly allowance:

• Flat rate: Pay a consistent allowance that isn’t connected to chores — and pause anytime.

• Partial payment: Pay a percentage of their allowance based on chore completion. Hello, motivation.

• All or nothing: Only pay their allowance if they complete all their chores. Work hard. Get paid. It’s that simple.

Best practices for paying allowance

If you do choose to give your kids an allowance, make sure you combine it with conversations about money at home. Families that talk money are more likely to have kids who feel knowledgeable about managing personal finances. Score!

Cliché alert, but it’s true: Money doesn’t grow on trees. Be clear with your kids from the get-go. Help them understand what an allowance is, how they can earn it and what will make it go away. Once you’ve set an amount and frequency, be consistent so they can practice planning and budgeting for payday.

Greenlight tip: If you’re trying to encourage an earning mindset, make a distinction between allowance and gifts. Allowance should function similar to a paycheck, while gifts are for special occasions, like birthdays or holidays.

Let them make mistakes — and talk through the aftermath. Maybe they forget to take out the trash and are left with a stinky mess (been there!). Or perhaps they skipped laundry and their uniform isn’t clean for game day. It may be hard to watch them make a couple of slip-ups, but it’s better to have a lesson learned while they’re under your roof than when they’re paying for their own.

They’re doing the hard part, so we make the rest easy for you. Use your Greenlight app to set up chores and one time jobs, tie them to an allowance (if you want!) and stay in the loop to make sure your kids are keeping up with their end of the deal. And don’t forget to have those money convos so they learn to put their hard-earned dollars to good use. Happy earning and happy learning!