Is tying allowance to behavior really such a bad idea?

Children between the ages of five and six are good candidates for an allowance. Because the experts I spoke with believe that the primary value of an allowance is to teach children how to manage money, many do not believe that you should withhold allowance as a consequence for undesirable behavior (in fact, I am not even going to site a source for this because there are just so many of them!) Some experts even go so far as to use bold, underlining, and ALL CAPS to drive the fact home that allowance should not be tied to behavior or the completion of chores.

The argument is that children can only learn how to live within their means if they can count on a set amount of money at a set time. They believe that parents should use chores as an expectation of being a member of the family and that you should consider withholding privileges such as television, using the phone, etc., as a consequence for not completing chores. I am not an expert in child development, but I would like to humbly offer a counter-point to this argument.

Speaking as a mother of kids who like money more than they like television or the phone, I am switching gears, ignoring expert advice, and tying allowance to daily behavior. Apparently, I am risking that my kids will grow up not knowing how to manage money, but I think there might be a few benefits as well.

-It reflects real life in that you need to meet certain standards to earn money.
-It teaches them how to live with varying amounts of disposable income.
-It is a good illustration of how money can add up over time.
-It helps with organization (see below).

Plus, I think the majority of what kids learn about money is not from spending a few dollars a week on toys, but from what they see parents do.

So what is this going to look like? I am repurposing a pill reminder.

I’m filling each compartment with 50 cents. At the end of each “good” day, the kids will get their money (don’t worry, most of our days are great!) So, have any predication on how you think this plan will work?


Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

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  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.