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Allowance vs. Commission: Which Works Better for your Kids?

By David Bibby

Kid Raking LeavesMy family and I have revolutionized the way we do allowance in our household. Recently, we have noticed that we were letting things slide, so we decided to look at the motives and behaviors that we want to see in our children. My wife and I have two girls ages 7 and 9, and we’ve found that they were living the easy life and getting paid for it too.

Our girls were each receiving a $5 per week allowance. We insisted that they tithe one dollar and save another, which left them with $3 a week in spending money. Now this might not seem like much, but to our girls this was a considerable amount. Unfortunately, we’ve had some challenges teaching them the value of money and work. If we continued with this allowance system, we realized we would produce some very ungrateful children. We were very frustrated because we were paying money for little or no work. What were we teaching our kids by shelling out money week after week without defined ways in which they were to earn this money?

Problems with the Allowance Strategy:

1) No Consistency – In the beginning, we didn’t really define what it was that they were getting an allowance for. Was it because they made their bed? Was it because they cleaned the game room? What about helping with the dishes or setting the table?  Some days they would do it, but most of the time they didn’t lift a finger. Still, they were paid all the same.

2) No Tracking – A couple of times, we didn’t pay them on allowance day because we just didn’t have the cash on hand. Sure it was in the bank, but we didn’t have the one-dollar bills to distribute out to them. The next thing we knew a few weeks had gone by. Then a our wallets would be quickly emptied when the kids said, “Just to let you know, Mom and Dad, you owe us each for five weeks of allowance!” OUCH!

3) No Ownership – We taught our children (not intentionally) that if they didn’t do their chores, we would take on the duty of reminding them or naggingthem to do it. The problem was that this put the burden on us to make sure the chores got done every day. We were spending a lot of money and energy trying to get them to do something that we wanted done. The kids did not own their chores; we did! They had no true incentive or desire to complete these chores.

Future Problems:

What are my children likely to learn about money and work when they become adults if this mentality is allowed to continue? If they learn that money just comes to them with little or no effort, then they will be completely unprepared to go out in the world as independent adults. At best, they might become slackers and do the minimum amount of work required to get a paycheck and at worst they will live at home until they are age 40, perhaps still asking for an allowance! My wife and I want neither of these options for our children.

Our Solution: The Commission Strategy:

1) Pay commission on defined chores – We defined what chores they will get paid for and which ones they will do because they are part of the family. We wanted repetition so that they can build better work habits. That means some of the chores are daily chores like “make the bed,” “sweep the floor,” and “unload and reload the dishwasher.” Each chore is assigned a dollar amount and we total it up at the end of each day. To make it easy, we gave them five commissionable chores each day at $.20 per task. So potentially, they can earn a dollar a day.

2) Transfer ownership from us to them – We clearly marked on a white board what their chores were. We have a “do” and “done” column in which they move the magnetic button over when they are finished with that chore. If they do it, they get paid for it…if not, they don’t. This helped them realized that they would not get full pay if they did not complete all of their chores.

3) Every day is Payday! – We wanted them to get the immediate rewards (or consequences) of doing all or part of their chores. So at the end of the day, if they did 4 out of 5 chores, they’d get $.80 instead of a full dollar. If they got paid once every two weeks, then we would have to explain why they didn’t get their entire pay saying “Well…two weeks ago you did 3 of 5 chores…and last Wednesday you did 2 of 5 chores…” We didn’t want the hassle of keeping track. So by making Payday at the end of every day, we kept it simple for us. It also helps the kids too as they build an immediate connection between the chores they did and the pay they received that day. It really helps create consistency and repetition.

It’s amazing how these small changes can have dramatic affects. As it turns out, our kids love to do chores! We don’t have to remind them or nag them to do chores anymore. If they don’t do it, or if we have to do it, then they don’t get paid for it. Since we implemented commissions instead of paying allowance, our kids have done a variety of new things that they never did before: vacuuming, mopping, cleaning tubs and toilets, washing windows and mirrors. They are having fun and making money too. We don’t expect perfection, but we do expect them to own their chores and take responsibility for their earnings.

We’ve also added Saturday and Sunday as days they can do chores as well. How we “sold” the kids on these additional days is that we told them that this would increase their potential earnings to $7 each week.

It’s been exciting to teach them a good work ethic, and raise independent, money-wise kids. I look forward to continuing to write about their progress as they learn and grow. Maybe when they are older…they will grow up to be Money Crashers too!

What kind of things worked for you when you were a kid, or for your own kids? I’d love to hear other strategies out there that maybe I can implement into my own children’s routines.

David Bibby
David Bibby is 35 years old currently living in Palm Bay, FL with his wife Catherine and two daughters. David is a Christian, writer, and programmer. He became interested in personal finance at age 20 while working for a credit union. He owns and operates numerous websites on topics ranging from finances to marriage help. His latest project CouponFedFamily.com might be his most ambitious yet!

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  • http://www.famzoo.com Bill at FamZoo

    Your specific everyday commission approach sounds cool, but whether you pay for chores or not, I think the key thing is having a system that is consistent with clear expectations and shared ownership. We happen to do an approach that is in-between – regular allowance + unpaid expected chores + penalties when expected chores not done + some special paid jobs – just because we got tired of checking off chores all the time as the kids got older (younger kids and certain personalities tend to like the daily check-off).

    Have you considered an online system to make the tracking & payment easier? (Hint, hint ;-)

  • http://www.moneycrashers.com/author/davidbibby David Bibby

    At the moment the kids are really enjoying it. They’ve been begging me to let them wash the cars for extra money above any beyond their normal chores. We will most likely consider it in good time.

    I just took a look at your allowance system I must say that it looks pretty good. I may have to enroll and put a review up on Money Crashers if that hasn’t been done already.

    The only thing I’m a bit leery about is giving loans to kids, and having them work it off. We want to teach out children to live a debt free lifestyle from the get-go.

    Thanks for your comment Bill!

  • David Bibby

    At the moment the kids are really enjoying it. They’ve been begging me to let them wash the cars for extra money above any beyond their normal chores. We will most likely consider it in good time.

    I just took a look at your allowance system I must say that it looks pretty good. I may have to enroll and put a review up on Money Crashers if that hasn’t been done already.

    The only thing I’m a bit leery about is giving loans to kids, and having them work it off. We want to teach out children to live a debt free lifestyle from the get-go.

    Thanks for your comment Bill!

    • http://www.famzoo.com Bill at FamZoo


      Thanks for checking out FamZoo. We have a lengthy 2 month free trial with no payment info required up front so families can take it for a very in depth spin before subscribing. We’d love to hear your feedback and we’re always happy to help with any questions.

      On the loan front, I was leery too, but it turned out to be a good way for our older teens to share in the cost of items that they needed right away for school like computers and learn just how long it takes to pay some of those things off on a tight income. They also took better care of them when they saw their allowance was being garnished each week to pay ’em off and they had to forgo other activities!

      That said, a really key point about our platform is that it’s a set of very customizable tools that families pick and choose from in a way that matches their particular money philosophies and values. Aside from encouraging parents to teach their kids about personal finance and philanthropy in a way that’s aligned with their values, we don’t want to push families in any specific direction.


  • http://www.moneyfunk.net Money Funk

    I like your method and may consider implementing it myself. But I am curious how you handle the situation if the chores do not get done? My kids are 10 and 15, so they have a tendency to slack off.
    I like Bill’s concept of being penalized if expected chores are not done. Bill, what are your penalites?

    Great post, David. Allowance is always a great topic for discussion.

    • http://www.famzoo.com Bill at FamZoo

      Money Funk,

      Yeah, gotta love those slacker teen years ;-)

      In our case, we made the penalties such that a week of non-compliance penalties was equal to about a third of their allowance. Maybe we should have gone for 100% – but seems to generally work. For the teens, we also set it up so when we check off the penalty, a text message is sent to their phone – just to rub it in a bit.

      I put a picture of my wife’s setup for the 3 we still have at home (2 in college now) on Flickr if you’d like to see what it looks like:



    • David Bibby

      Since my kids are still young, we don’t impose any NEGATIVE consequences. If they don’t do the chore…then they don’t get paid for it. In other works…NOT doing work gets NO energy from us. When they DO the work… they get POSITIVE reinforcement in the form of praise and cash for their chores.

      Once they’ve earned the money… they do not have to fear losing it. It is theirs and they earned it. We’re not going to take away what they earned but we do insist that they give $1 a week to God and $1 a week into their long term savings.

      When they are older (12-15) maybe then we can teach them about money penalties. Like an adult gets a ticket for speeding… the kids may need a penalty for SERIOUS misbehavior.

      • http://www.moneyfunk.net Money Funk

        Thanks for sharing Bill! I like the consequence of losing a 1/3rd of their allowance. Sounds like its time for me to revamp the chore list.

        David, I would start implementing consequences at a young age. My 10 year old is already slacking at doing her chores. And feels she only needs to do them when she needs money. LOL. Kids.

        • David Bibby

          In a way…we do have consequences when they don’t do the chores that done for being part of the family. We’re not big on PENALTIES but if they are not doing what they are supposed to be doing then they miss out of FUN time. So if they’re not keeping their room clean, friends can’t come over. If they’re acting wild or stubborn or disrespectful, then we won’t take them to that movie they want to see.

          So I guess we DO put in consequences (not monetary) in the form of “missing out” on fun things.

          Our girls love to have fun, so they don’t frequently slack on chores.

  • Jody

    With our older boys, I made a chore chart. I would pay them at the end of the week for the chores that they did. I noticed that if they did not feel like cleaning the bathroom or doing the dishes then they did not!! When I would remind them that they would not get paid if they did not do it, they just said “Oh Well” I do not want to get paid for that this week. So, we took the chore chart away and just told them they would do these things because they are a part of a family and families work together to keep a house running and clean. So now they just do what they are told or they get grounded. We started paying them to babysit their younger brother and sister. Every time my husband and I want a date night or just need to go shopping or something we pay each boy $10 to watch one of their siblings. So one watches his sister while the othe one watches the little brother. It works out great! But they also have to keep the house in order. We do not want to come home to a house that is destroyed. That way we know thay they are playing with them and really paying attention to them and what they do.

    • David Bibby

      Thanks for the comment Jody,

      With our girls, they are saving up their money for an “American Girl” doll. This is something that we told them in advance that we will not buy for them nor would Santa bring it to them. Therefore, if they REALLY want a $95 doll then they will have to do chores and earn money to get it. So far they really like the process because they have put their commissions together with their other money and they are more than half way there now. They are just counting down the weeks now!

    • http://www.moneyfunk.net Money Funk

      Jody. I feel your pain. My husband thinks the chores should just be part of the family keeping the house together, too. I agree to a point, but my issue is that if the kids get an allowance and they want something…they get to pay for it. If they didn’t get paid then that something would always come out of my pocket book without teaching them a thing about being responsible with money. Then again, I could always implement extra duties to earn money. Hmmm…

      Now that my son is older, it is nice to pay him for babysitting. Nice to know what date night is again. :)

  • http://www.castocreationsjewelry.blogspot.com megscole64

    I LOVE the idea of commissions. Especially since that is how I (mommy) get paid now. It’s all about how hard you work. If I don’t feel like working then I’m going to not earn anything. If I work my butt off my income increases. It’s the real world. More so, I’m finding for myself, than being a salaried employee. You’re paid what you’re worth. It was never a concept I was familiar with.

    As my son gets older I can see how doing chores as part of the family is important too…you don’t want them doing things just to get paid. I remember my brother asking my mom how much he’d get paid for normal chores…some things should just be automatic.

    • David Bibby

      A healthy mix of Family Chores and Paid-Chores is essential. With this in mind, a child can grow up and KNOW that they are contributing to the greater good of the family. Plus there are things that they want to buy that you don’t necessarily want to buy for them. Those things you insist they save their earned money to buy. That is how they learn. If you give them everything they want, then the earned money they have doesn’t mean anything to them.

      This also solves the issue of the “gumball machine” woes most parents suffer.

      By the way.. you can start a commission system as early as three years old. Here’s how (this came from Dave Ramsey):

      You want the three year old to clean his room. Now a three year old is not going to make it spotless but if he’ll pick up THREE toys and put them in their place… you can give him/her lots of praise and make it a big deal. “You picked up THREE toys! You’re such a good boy/girl! Here’s a quarter for the jar and when we go out you can buy something from the machine.”

      For younger kids… praise is just as good as money!

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