If you're a child who wants an allowance in 2013, you're
probably going to have to earn it. That's according to a new study
conducted for MoneyRates.com by online survey firm Op4G.
The survey asked 1,000 parents about their approaches to
awarding allowances to their children. The answers revealed that
the vast majority of parents make allowances contingent upon doing
household chores or performing academically -- and often both.
A look at how other parents manage allowances can be a
good reality check for parents
who are unsure about how to set up an allowance for their own
children -- particularly for those who don't know whether to tie
that allowance to certain tasks.
Trends in allowances
Here are five notable outcomes of the survey:
Allowances are by no means universal.
While a 56.5 percent majority of parents pays their children an
allowance, a significant 43.5 percent minority does not.
Allowances between $5 and $9 per week are the most
Among parents who pay their kids an allowance, 39 percent pay an
amount in that $5 to $9 range. An amount between $10 and $15 was
the second most common response, at 29 percent, while 22 percent
of respondents pay less than $5, and 10 percent pay more than
Allowances are usually tied to performing household
An overwhelming 87 percent of respondents expect their children
to earn their allowances by doing chores.
Many parents also tie allowances to academic
Seventy-one percent of respondents make allowances dependent on
academic performance. With such large numbers
tying allowances to chores and academics
, it is clear that many parents make allowances dependent upon
Men are more generous with allowances -- but also more
The survey found that men are slightly more likely than women to
tie allowances to household chores, and significantly more likely
to tie allowances to academic performance. In return, men are
more likely to award higher allowances.
Benefits of pay-for-performance allowances
The clearest conclusion from the survey is that parents
overwhelmingly believe that children should do something to earn
their allowances. Here are five reasons this approach makes
It demonstrates that money comes from effort.
When they grow up, kids will have to earn their pay, so they
might as well get used to this concept at an early age.
It creates a personal perspective on the value of
Being able to connect a sum of money with what it takes to earn
that money can help children develop a
clearer understanding of its value
. For a child who has developed this understanding, buying
something is no longer as easy as handing over a few dollars --
thoughts of the time and effort that went into earning those
dollars may come into play. Recognizing this can make children
more discriminating about what they choose to buy.
It teaches that performance is generally rewarded in the
Effort is important, but employers tend to pay for results.
Introducing an element of this into an allowance system can
encourage children to become more results-oriented.
It helps children develop responsibility for their
The better children understand the effort that goes into being
able to buy things, the more likely they are to look after those
It can be a springboard toward other financial
Once a child starts to save some money, it creates opportunities
to teach other financial basics such as budgeting, balancing a
checking account and
shopping for better savings account interest
Requiring your children to earn their allowances does not
guarantee that they will learn the right lessons about money.
However, it may help prevent them from developing a sense of
entitlement -- a trait that can prove self-destructive later in