Should money be a reward?

Apr 23, 2012 12:00 PM by Lisa Steinke

Posted in Parenting / Age by Age / School Age Kids

Tax day has come and gone (hopefully you got a big return!) but no doubt, money is still on your mind. Why not take this time to teach your child the value of a dollar -- or more specifically, the value of earning a dollar?

Money for a job
well done?

When deciding how to educate your kids about money, important questions come up: Should you pay your child an allowance for doing household chores or should he do these tasks without compensation because he's "earning his keep"? And when it comes to a job well done like receiving an "A" in school, is it OK to offer money as a reward? Find out how parents and experts weigh in on teaching your child the value of a hard-earned dollar.

Allowance -- yay or nay?

Value of a dollar

Liz, a mother of two from California, says yay. "I think it's so important to teach kids the value of a dollar. I never really learned that lesson growing up, and as a result, feel like I'm terrible with money! By giving my 7-year-old money to earn and choices to make on her own with that money, she will hopefully grow up to understand the value of things."

Money and value

Steve Siebold, author of How Rich People Think, agrees. "By giving children an allowance, you're tying money to value and teaching children to think, 'How can I create value in exchange for money?' It teaches kids to look for problems to be solved and to be entrepreneurial. They associate money with solving problems and not with entitlement."

Responsibilities

Ann Morgan James, author of How to Raise a Millionaire and mother of one from California, says nay. "If you are already paying allowance, or contemplating doing so, stop! Household responsibilities are just that: responsibilities. They are not — and should not be — jobs for which you are paid. I do not get paid to cook dinner or do the dishes, and I do not expect to pay my kid to do his share around the house."

If you decide allowance is the way to go, what's next?

Steve Siebold gives this advice: "Parents should have a combination of tasks that have to be done daily or weekly (taking out garbage or general yard work) to provide the basis for a weekly allowance, and extra chores that happen periodically, like cleaning the car or shoveling snow, that kids get paid extra for. If they want money to buy a toy, you want them to look around the house and think, 'How can I help? What can I do to solve a problem and earn money for the toy?'" Steve also says parents must be consistent about enforcing the completion of chores. If your child's base allowance is $10, but two chores aren't done, the allowance should be less. If there is something going on that kids really want money for, tell them it's an advance.

If you decide against it, how can you help your child earn money?

Ann Morgan James doesn't agree with allowance, but she does believe kids should be able to earn money. Her solution? They should make money outside of the home. "Teach your kids they have earning potential. Help them start a business. Sit with your kids and evaluate where you live and what business they can start. Help them think about the neighbors (their potential customers), what they need and what service they can offer. Of course, my personal favorite is the business my son Jack started: Jack's Garbage Valet, where he takes his neighbor's garbage cans in and out for $10 a month — but I'm admittedly biased."

How kids can make money >>

How much allowance should your kids get? >>

Money as a reward?

Should money be given as a reward for a job well done? For example: Cash for good grades.

Meg Akabas, parenting educator, founder of Parenting Solutions and a mother of four from New York, says no. "When a child receives money for things we want them to do because they are the right thing to do and bring their own rewards, they come to believe they are doing those things only for the monetary reward. The wrong message is delivered because essentially, it's a bribe."

More on teaching your kids about money

12 Ways to teach your kids how to save
How an allowance teaches kids about money
Should you talk to your kids about money?

Tags: allowance chores for kids rewarding kids

Comments

Comments on "Should money be a reward?"

After reading we inutttsied allowances for our 7-year old ($1/week) and 5-year old ($.25/week). It's been about one year since doing and we'll probably make an adjustment soon but haven't decided how much.The allowance is not based on chores (they have to do those regardless) but we will pay for extra chores.We do not require savings or charity because enforced savings or charity is not teaching the correct principle of either. However our 5% interest per month (~70% annualized) helps solve the issue of savings as they quickly see how getting their money to work for them is exciting. We do weekly allowances (Monday when FHE is) and the first Monday of a new month we count up what's in the jar and compute interest (helps teach math and basic counting).They can pretty much spend it on whatever as long as it doesn't break family rules so no TV in their room for us.My take on Rich Dad, Poor Dad is that it's tightly coupled with the MLM crowd. Do you feel the same about RDPD as MLMs?