Why Allowances Are Outdated: The Surprising Power of the Commission System for Kids

How Earning, Not Receiving, Transforms Your Child’s Attitude About Money

Imagine a world where your kids don’t just ask for money—they earn it. The traditional allowance, handed out every week regardless of effort, is quickly becoming a relic of the past. Why? Because it teaches entitlement, not empowerment. Dave Ramsey’s commission system flips the script: money is earned through chores and contributions, not just received for existing.

The commission system is simple but powerful. Each completed task comes with a small payment, and unfinished jobs earn nothing. This teaches kids the value of work and the dignity of earning their own money. It also builds confidence—children as young as three can match socks or pick up toys, while older siblings can tackle bigger responsibilities. Over time, the habit of working for money becomes second nature, and your kids develop the discipline and pride that will serve them for life.

Switching to a commission system isn’t always easy. There may be resistance at first, especially if your children are used to getting money with no strings attached. The key is consistency and encouragement. Use a chore chart, offer praise for jobs well done, and let your kids experience the consequences of not completing their tasks. If they run out of spending money, resist the urge to bail them out—let the lesson stick.

Practical tips: Start with age-appropriate chores and clear expectations. Pay commissions weekly and use cash or jars so kids can see their money grow. As they get older, introduce new responsibilities and encourage them to set savings goals. Celebrate their successes, and talk openly about the connection between effort and reward.

Real-life stories show that kids who grow up with a commission system are more likely to become hardworking adults, seek out friends and partners who share their values, and avoid the entitlement trap. They learn that money is not a right, but a reward for effort—a lesson that will shape their character for years to come.

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