How is allowance calculated?

If your child achieves 100% on her checklist, it's pretty straightforward: the system will deposit 100% of her regular allowance into each account.

Note: the system will deposit the allowance in effect at the time of point entry. When you change the allowance at some point in the future, it will only affect future point entry.

What happens if my child gets more (or less) than 100%?

There are many possible approaches. The underlying philosophy behind the Active Allowance defaults for families who link responsibilities to allowance is:

1) Not "all or nothing": We don't believe allowance should be "all or nothing" (i.e.. do all your chores or you get nothing). We actually want our children to have money so they can learn to make choices, but we also want them to understand the consequences related to how much initiative they take - positive and negative.

That's why the system enables you to dial allowance up or down based on how well your child has done on his responsibilities.

2) Obligations take priority: Children (and many adults) often treat "immediate gratification" (like Recreation) as more important than others. We want them to learn that first, you cover your obligations (eg long term savings, charity, etc). Then, you get to have the fun money if you have anything left over.

By having shortfalls or overages disproportionately affect the "immediate gratification" account, there's greater encouragement to achieve.

The Default Setup

Picture a glass filling up with milk. The first part of the allowance earned in this example goes to Long term saving until that part of the glass is full (i.e.. equals her weekly allowance).

If there's more milk, it goes to Charity, then to Gifts, etc, then finally to Recreation.

The intention is that if your child underearns, the pain is felt disproportionately on the favorite account at the top of the glass - Recreation. And if your child overearns, the joy is felt on that account too!

Example 1 - Your Child achieves 80%

If your child achieved 80% in this example, his $10.00 allowance would go down to $8.00, and the entire shortfall would be felt in his Recreation account.

If her result was so low that Recreation would be zero, the next account to be affected would be Clothing.

Example 2 - Your Child achieves 120%

Again, the top account would be affected. The extra $2.00 would go into her Recreation account

Changing the defaults

Click the OPTIONS button under the Allowance window on your HOME page to get to Point Allocation Rules.

Changing the Prioritization Ordering

You can do this either by:

1) reordering the Budget Categories on your child's Budget page. See Budget Help for details.

2) changing the order directly on the Point Allocation Rules page by selecting each account in the drop down menus.

Changing the Prioritization percentage

The defaults are set at 100%. However, you might prefer that, instead of all money allocated for, say, Long term Savings first going there, you might take a softer route and decide that, perhaps only 50% needs to go there before moving up to the next account.

You can do this for any or all accounts, with the net effect that your child can get money into her Recreation account despite lower achievement on her Checklist.

This is about Priorities for distribution, not for calculating Total amount

Important note: this tool is just for setting the priorities for distributing the earned allowance for the week, not for determining the total. The total is determined by your child's Checklist result times her Standard allowance (which is determined in her Budget)