Are you giving your children an allowance?

When it comes to giving an allowance—or not giving an allowance—there are no hard-and-fast rules to follow. Different parents have different approaches, and the only right way is what’s right for you.

Here are a variety of viewpoints to consider and choices to make to help you determine which practices suit your personal preferences.

To give or not to give

First of all, you need to decide if you’ll even give your child or children an allowance. The majority of Canadian parents who choose not to give their children an allowance say their number one reason is simply that they buy their children what they need.1 Another common reason is that a child has enough money of their own from family gifts or, in the case of teens, from a part-time job.

How much?

Many parents pay by the chore. In this case, you just need to think of what’s fair. If the pay is too high, you may risk giving your child a sense of entitlement and creating a false impression of what work is worth. But if the pay is too low, your child won’t have an incentive to take on the tasks.

If you pay weekly, the amount depends on the child’s age, their financial responsibility and whether you expect the allowance to only cover spending or also apply to savings and charity. A common guideline is to base the weekly allowance on $1 to $2 for each year of their age, so a 10-year-old child would receive $10 to $20 each week. This is only a guideline, and you may wish to give less or more.

The control decision

Some parents believe the child should be free to spend or save their allowance however they wish. If they squander one week’s allowance and feel bad about it, that’s how they learn.

Other parents give an allowance with conditions. About four in five Canadian parents believe their child should be required to save a specific amount of their allowance, and about one in three parents require their child to give a certain amount to charity.¹

A parent who wants to monitor exactly how their child is saving and spending their allowance can set up an allowance app to track transactions.

Should an allowance be tied to chores?

Most Canadian parents believe a child should complete chores to get their allowance, either receiving a regular weekly amount for performing specified duties or receiving pay for each chore.2 Some common chores include cleaning their bedroom, taking care of the pet, washing dishes, doing yard work, and taking out the garbage, recycling and compost.

That said, many parents don’t like tying an allowance to chores. They consider performing household chores to be an expected responsibility, not a “paid job.” These parents are content using an allowance as a way for their children to learn how to manage money.

Some parents take a hybrid approach, in which children receive a weekly allowance that isn’t tied to chores, but can receive extra money to complete certain tasks.

Ways to pay

When choosing how to pay an allowance, consider which method best suits both you and your child.

Giving cash. When your child is quite young, you’ll choose cash if you believe your child isn’t ready for a debit card. However, some parents prefer cash regardless of the child’s age. The child can clearly see the amount they’ve saved and how much is left to spend until the next allowance payment. Also, by physically handling bills and coins, a child may be more mindful of how they’re spending their money.

Using a debit card. The typical reason to use a debit card for allowance is convenience. You can easily transfer allowance payments into your child’s bank account, and your child only has to carry a card and tap to make a purchase. Your child can also make purchases online.

There's an app for that. Both you and your child can download an app that takes providing an allowance to a new level. You can assign chores through the allowance app and send money. Your child has access to a variety of money management tools, including setting savings goals and tracking their spending. The child also receives an accompanying debit card.

 

¹ Mydoh, “Canadian allowance report,” 2024.
² Finder, “Chores for kids survey,” 2022.