“No chores necessary. Children are simply given money (usually weekly) and are either free to do what they want with it, or they must allocate it in specific ways. Lieber gives his seven year old daughter $3 weekly, but she is free to spend only $1. Of the remaining $2, one must go into a savings jar and the other must go into a “give jar for a cause of her own choosing.” “She spends a lot of time thinking about that,” Lieber told NPR.
The upside of this approach is that it teaches children to think carefully about how money is spent. The downside is that it teaches them that money comes from an authority as a gift. And the amount one receives is dependent solely on the generosity of that authority, not on what one actually does to earn or create that wealth.
No allowance at all. The second popular choice is to not give allowance at all, but to take a “communal sharing” approach. The idea here is that we are all part of the same family, and we should all contribute what we can to the common good, cheerfully pitching in to do chores simply because the family needs them done. Some parents sweeten this by covering all their children’s needs but allowing them to present an argument or sales pitch to persuade their parents to buy something they want.
The upside of this is that children learn that there is some value to work other than the financial reward it brings, and that contributing to a common good can be its own reward. The sweetener also teaches them how to be persuasive. The downside is that it teaches them little about financial responsibility, and even less about how to create their own wealth. The sweetener can also teach them to be annoyingly argumentative.
No free money. A third popular choice is “to link allowance to the performance of chores.” “The thinking here,” Lieber explained to NPR, “is that ‘Nobody gets free money in the world and neither should my kids and that would spoil them.’”
The upside of this is that children learn a sense of empowerment—that the amount of money they have in their pockets is up to them and their willingness to work hard. The downside is that if your children may decide they’d rather not do the chores even if it means foregoing their allowance. This is especially true if all of their needs are otherwise taken care of by their parents, and allowance is just the icing on the cake.”