Giving kids the money skills they need … so they don’t come back.
One of the important thing to teach children is the value of work. Specifically, the concept that money comes from hard work – nothing comes for free.
Unfortunately, many children are routinely taught that everything will just be handed to them. All of their meals are cooked and served. The dishes are cleared for them and washed after dinner (or, more often, they are taken out to eat every night and never need to worry about paying the bill). Their clothes are bought for them. School supplies, uniforms, and activities are provided. They even get money for breathing air each week or each month.
Obviously providing many of these things is simply part of being a parent (although obviously getting the children to help as they are able with meal preparation, laundry, cleaning, and other tasks should be done). The allowance, however, causes children to expect money to simply be handed to them. Replacing the allowance with commissions will teach children that money is gained by performing work. Here’s how:
1. Develop a list of jobs that can be performed, along with a payment schedule. These should not be things that the children should do anyway – like picking up their rooms or helping clear the table after dinner. These should be extra tasks that are needed to maintain the house.
2. If the tasks are completed, the child receives a commission for doing them. If the tasks are not done, no commission is paid. There should also be some penalty for not doing the task within a reasonable amount of time, such as taking away the ability to do the task for a period of time. For example, the trash needs to be taken out at certain times, not when the child feels like getting around to it.
The payments for the jobs should be reasonable – what you would pay an adult to do a similar amount of work. After all, just because they are children doesn’t mean they should receive $0.50 for washing the car.
An example list of tasks and commissions is the following:
Taking out the trash: $1.00
Putting away the dishes: $3.00
Sweeping the floor: $3.00
Mopping the floor: $5.00
Weeding a garden bed: $10 per hour
Mowing the lawn: $20
Folding the laundry: $5.00 per load
Hopefully, by doing tasks to earn money, rather than simply being handed money, your child will begin to learn the importance of work and begin to associate work with earning money.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.