With my children’s chapter book Analysis Alice and the Stripy Sweater currently available for pre-order, I thought I would share some of the research about allowances that I did in preparation for writing the book. As the parent of two young children myself, it’s something that I have thought a lot about. When should I start giving them an allowance? How much should I give them? Should I tie it to chores? Will my kids spend the money right away, or will they learn how to save? Thankfully, a number of surveys have been conducted on the topic, so we can dig into how parents are currently approaching allowances with their kids.
What Is an Allowance?
An allowance is money given to a child by their parents or guardians, usually on regular intervals such as weekly or monthly. The amount of money may be fixed or may vary based on chores or grades.
When Do Kids Start Getting an Allowance?
Though Scholastic recommends introducing the concept of an allowance around age 5 or 6, a survey by Inuit Mint found that only 9% of parents actually start giving an allowance at this age, as you can see in the graph below. 1/4 of parents begin to give an allowance to their kids between age 7-9, and about 1/3 start when they’re between age 10-12. 22% never give an allowance. Interestingly, Rooster Money suggests that in families with multiple children, younger children will often start earning an allowance younger because they want to catch up with their older siblings.
How Much Do Kids Earn?
Common rules of thumb suggest paying a weekly allowance of between $0.50 to $2 for each year of your kid’s age ($0.50 to $1 according to Scholastic or $1 to $2 according to Investopedia). This matches up pretty closely with data from Rooster Money, shown below. However, this data is significantly different from that found by a 2019 AICPA survey, which found that kids receive an average of $30 per week. However the average age of children receiving an allowance in this survey is unclear, and the methodology includes “children” up to age 25, suggesting that adult children living at home receiving an allowance may be skewing the survey results.
Other than being paid by age, some children receive an allowance based on the number or type of chores completed. Still others are paid based on behavior or grades, such as a certain amount for each ‘A’ on a report card. According to the Intuit Mint survey, most parents determine how much allowance to give based on chores, followed by behavior, age, and grades, shown below. Some, but significantly less, consideration is also given to the parents’ income and the parents’ childhood allowance.
What Kinds of Chores Do Kids Do to Earn Their Allowance by Age?
Rooster Money did a great job of breaking down typical chores by age. I will summarize them below.
4-5:
- Putting away toys/clothes
- Tidying up bedroom
6-7:
- Setting/clearing the table
- Watering plants
- Folding laundry
- Looking after pets
8-9:
- Loading/emptying the dishwasher
- Helping to prepare dinner
- Vacuuming
- Raking leaves
10-11:
- Taking out trash/recycling
- Sweeping
- Cleaning the kitchen/bathrooms
- Walking dogs
12+:
- Making dinner
- Mowing the lawn
- Washing windows
- Washing cars
What Do Kids Do With Their Allowance?
As you might expect, kids tend to spend most of their allowance, either right away or after saving up for a larger purchase. In fact, the 2019 AICPA survey found that only 3% of children primarily save their allowance. That may be an outlier, though, as as a much larger survey by Rooster Money found that 34.9% of kids between 4-14 were saving up money in 2021, granted this was down from 42% in 2019 and 72% in 2017. It should be noted, however, that many of these kids were saving up specifically to make larger purchases.
What Do Kids Spend Their Allowance On?
Different surveys have different findings about what kids spend their allowance on, but they tend to include video games, toys, and books. Specifically, the 2019 AICPA survey found that most allowances were spent on outings with friends, followed by digital devices/downloads or toys.
The Rooster Money surveys broke spending down into two categories: immediate spending and saving for later spending. In 2017, the top 3 things kids would immediately spend money on were apps, toys, and candy. In 2019, they were candy, presents, and books. In 2021, they were video games, books, and Legos. The top things kids were saving up to buy were mostly electronics or Legos. In 2017, they were Legos, phones, or bikes. In 2019, they were phones, Legos, or tablets. In 2021, they were video game consoles, phones, or Legos.
Interestingly, there appears to be a cultural difference depending on which country the kids live in. A 2019 survey of Japanese kids found that most children spend their allowance on junk food, followed by stationary and manga.
Cozy Nest Egg 