Chores, Allowance, and Teaching Kids That Work Has Value

Monthly Money Man on July 10, 2026

From the time we start toddling around the house, we contribute. Maybe not intentionally at first — but at some point every family figures out the same truth: survival means everyone works together.

Think about it. Someone has to cook. Someone has to clean. Someone has to earn money, pay bills, go to the store, take out the trash. Every single thing that keeps a household running takes work. And when kids grow up understanding that — really understanding it — they develop something most adults wish they had learned earlier.

The understanding that work has value.

Chores Are Not Optional — But They’re Also Not a Job

Here’s a distinction worth making early with your kids.

Chores are the baseline. Making your bed, cleaning your room, helping with dishes, taking out the trash — these aren’t things you get paid for. These are your contribution to the household just for being a member of it. We all eat. We all make messes. We all clean them up.

This isn’t punishment. It’s survival. And teaching kids that early sets the foundation for everything else.

But here’s where it gets interesting — and where the real money lesson begins.

Above and beyond chores is where kids learn that solving problems has monetary value. When your child does something that goes beyond what you normally expect of them — that’s worth paying for. Mulching the yard. Washing the car. Organizing the garage. Helping with a project. These are real jobs that solve real problems and they deserve real compensation.

That distinction matters. Chores are contribution. Extra work is entrepreneurship.

Give Them the Opportunity to Earn

Once your kids understand the difference, give them opportunities to go above and beyond.

Every week or so I look around the house and if I see projects that need doing, I offer them to my kids before I ever call a contractor. I don’t have enough time to do everything — and paying my kids is not only more affordable, it’s more fulfilling. Watching them build skills and create their own wealth is worth more than any invoice. I keep a running Google Reminders list nicknamed after each kid, add jobs as I think of them, and have them check things off and hand me a bill. It’s free, it syncs across phones, and it works for us.

There are a few ways to set this up. Apps like Greenlight automate chore tracking and connect earnings directly to a kids savings account — worth looking into if you want a more structured system. Or keep it simple with a shared Google Reminders list that both you and your child can access from your phones. And if you want something fun and educational, we’re building a free Chore Tracker and Bill Maker right here on Monthly Money — coming soon to the Backpack.

Pay them fairly. Not a token amount — a real amount that reflects the work. When a kid earns $20 for a hard afternoon of work they remember it differently than when they get $5 for doing something small. Fair pay teaches them that effort has proportional reward.

Have the Conversation First

Before any of this works you need to sit down and have a real conversation with your kids. Here’s what that sounds like:

“In this house there are two kinds of work. There’s what we all do just because we’re a family — and there’s extra work that earns extra money. When you see something that needs doing and you step up to do it, I’ll pay you fairly for it. And when you earn that money we’re going to talk about what to do with it.”

That last part is important. Don’t let the money just disappear into a pocket. Have a plan for it.

A simple split works well for younger kids — some to spend, some to save, some to give. But as they get older the conversation needs to go deeper.

Where the Money Goes — and Why It Matters More Than You Think

Here’s where chores and allowance connect to something much bigger.

A teenager who earns money from consistent above-and-beyond work at home has something powerful in their hands — earned income. And earned income opens a door that most teenagers don’t even know exists.

A Roth IRA.

If your teenager has earned income they can contribute to a Roth IRA — up to the amount they earned that year. The money goes in after tax, grows completely tax free, and can be worth hundreds of thousands of dollars by the time they retire. All from money they earned mowing lawns or moving stones as a kid. For casual work like lawn mowing or odd jobs paid by a neighbor or family member, there are typically no payroll tax complications for either party — just keep a simple record of what your teen earned so you’re ready to make that Roth contribution at year end. As always consult a tax professional for your specific situation.

We covered exactly how to open one and what to put in it in a previous Financial Friday — if you missed it go back and read it. It might be the most valuable thing you do for your teenager this summer.

The habits start with chores. The earning starts with extra work. The wealth starts with what they do with that money next.

Start Simple. Start Now.

You don’t need a formal system or a chore chart app. You just need a conversation and a commitment.

Tell your kids what’s expected for free. Show them what’s available to earn. Pay them fairly when they deliver. And then help them put that money to work.

That’s the whole system. And it starts younger than you think.

See you at the top.

Your Kids Are Growing Up. Is Their Money?

Monthly Money Man on April 24, 2026

There’s a photo on my phone I keep coming back to. My oldest, maybe three years old, grinning at the camera with ice cream on his chin sitting next to my nephew and not a care in the world. I look at it now and think: where did the time go?

If you’re a parent, you know the feeling. The days can drag, but the years sprint. And somewhere in the middle of school activities and the chaos we call life  and “Dad, will you play with me?” — time has a way of slipping past without you noticing.

Here’s what I’ve learned after years of helping friends and families manage their money: the clock ticking in the corner of your living room is also ticking in their portfolio. And one of the most powerful tools for fixing that — a Roth IRA for teenagers — is one almost nobody is using.Your kids are going to grow up whether their money is ready or not. The only question is whether you gave their money the same head start you’re trying to give them in other areas of their life.

A Quick Word About Time

If you caught last week’s article on compounding, you already know the secret: time is the most powerful ingredient in building wealth, and it’s the one thing you can’t buy more of. The earlier money goes to work, the less of it you need to get somewhere meaningful.

Which brings me to something most parents have never considered — and once you hear it, you won’t be able to unhear it.

Your teenager might have access to one of the best wealth-building tools in existence-a Roth IRA for teenagers and almost nobody is using it.

The Roth IRA for Teenagers Your Family Could Open This Year

Most people think of a Roth IRA as a retirement account for adults with careers. But here’s what the fine print actually says: any person with earned income can contribute to a Roth IRA. That includes your 15-year-old — as long as they have wages from a W-2 job or documented self-employment income like babysitting, tutoring, or lawn mowing reported on a tax return.

Here’s why that matters so much. A Roth IRA grows tax-free. Your child contributes after-tax dollars now — and never pays taxes on the growth. Ever. When they withdraw in retirement, it’s all theirs.

Now layer on the compounding math. A teenager who puts $1,000 into a Roth IRA at age 16 and earns a modest 7% average annual return will have — without ever adding another dollar — over $50,000 by retirement. That’s the runway no adult account can replicate. We simply don’t have it anymore.

The contribution limit is $7,500 per year in 2026, but it can’t exceed what your child actually earned. So if they make $2,000 this summer, they can contribute up to $2,000. And here’s a move a lot of parents make quietly: you can gift them the money to contribute, as long as the contribution doesn’t exceed their earned income. They did the work. You fund the future. Everyone wins.

One note: if your teen’s income is from informal work — babysitting, odd jobs, neighborhood gigs — make sure it’s being reported properly. When in doubt, a quick conversation with a CPA can save a headache later.

What About a 529?

A 529 plan is the other heavy hitter worth knowing about. It’s specifically designed for education expenses — think college tuition, room and board, even K-12 in some cases. Your contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs. Many states even offer a tax deduction for contributing. It’s a powerful tool, and it deserves its own full article — which is coming. For now, just know it exists, it’s worth exploring if college is on your horizon, and it pairs beautifully with a Roth as part of a bigger picture for your child’s future.

Start Before the Next Photo

You’re going to take another picture this weekend, or next week, or at the next birthday party. And someday you’ll scroll back to it and feel that same bittersweet rush — when did that happen?

Before then, do one thing. Find out if your teenager has any earned income this year. If they do, look into opening a custodial Roth IRA-thats the version designed for minors-before the next contribution deadline. It doesn’t have to be perfect. It just has to start.

Summer job season is right around the corner. We’ll be talking about that in July — and when we do, you’ll already know exactly what to do with the money your kid brings home.

See you at the top.

[Call to Action] Does your teen have a summer job lined up? A Roth IRA could be the best thing that comes out of it. Start by looking into a custodial Roth IRA at any major brokerage — Fidelity, Schwab, and Vanguard all offer them with no minimums to open.