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How my kids learned to earn (and value $$$)

This summer I tried something new. I drew a harder line than I ever have before for purchases for my kids. Their, "I want I want I want..." mantra had been getting out of control and no was not the best, long-term solution. Now that they are 7 and 10, it seemed about time for them to get an allowance. did we handle doling out an allowance?

Handing out money to them each week simply for being did not feel right to us. We think it is important to learn how to earn. Also, I am a big believer in kids learning the value of their work and how to negotiate and discuss money.

Tying money to their chores also did not feel right. We believe strongly that each member of the family has an important role and tasks that contribute towards making our home and family run well. Since they were very young, we expected our kids to do certain chores as members of the family. It started simply with picking up toys. Our expectations grew as the children grew. They must fold and put away their laundry, clean up their dishes, care for the pets, gather their trash on trash day, and so forth. In short, we expect them to take care of their own "household footprint" as is appropriate for their ages.

Still, I wanted them to learn to earn and to value a dollar and understand the cost of things, the real cost, when it comes out of your little stash of cash.

Prior to this, we'd provided everything they needed and a lot of what they wanted (within reason). So they perceived that money was something endless that came from mom and dad's bottomless wallets. Except money in our family is finite and our wallets are actually shallow. Having grown up with constant money worries, though, I didn't want my kids to be concerned. So we were sometimes indulgent, and often creative.

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It started with The List. They'd see something (or many things) in stores that they wanted. Usually, it was a passing fancy, an impulse, and not something I wanted to add to our house. The answer no could work, but after a while that didn't feel like the right response all the time either. So I established The Wish List. At first, I kept a piece of paper in my purse, one side for each child. If they really liked something, we'd consider adding it to the list.

The list comprised all the ideas for gifts when family and friends inevitably asked, "What do they want?" for birthday or Christmas. It was pretty handy. It gave them a sense of choice, eliminated "no" tantrums, and served a function. Plus, the list was rewarding because...they did end up getting gifts from it that they wanted.

The thing about the list, though, was the more that was on it, the less chance you had of getting what you liked most of all. A $2 doll at the doll store looks cheap and fun in the moment, but what if someone gets that and another cheap toy instead of the $7 doll outfit that fit the American Girl doll?

The list never got as long as you might imagine -- considering kids usually see 50+ things they "want" every time you go anywhere, see a commercial, or get a catalog in the mail.

Later, though, the cheap toys and junk was too young to appeal to them, and they specialized in things they liked, such as American Girl and Lego. The catalogs for those toys were more appealing, as were a couple of other lines. They'd circle items in catalogs, thrilling the grandparents.

The list? Was moot.

It set a valuable precedent though, and so I had little trouble in establishing the earn-n-spend system. And the kids had little trouble in comprehending it.

Roll Of Money by Anna Langova
This summer I decided to give it a go. My husband and I are extra busy in the summer, so more help around the house is welcome. I'd stop buying them stuff. I'd expect them to use their own money. And I decided that for the kids to get money, I'd try offering to pay them to do chores above and beyond their normal chore responsibilities.


There were strict parameters.

  • We'd negotiate a fair rate for each chore, chore by chore.
  • They had to track the date, chore done, and amount on a piece of paper invoice-style.
  • I'd offer chances, but the work had to get done, get done well, and in a timely way.
  • They had to show initiative and ask or propose work.
  • They could not begin demanding money for their regular responsibilities.
  • I recommended that they set a goal, have something specific to work towards to stay motivated.

This sure had the potential to teach a lot of lessons: how to negotiate, how to value work, how to track your earnings, how to bill, how to save, how to choose to spend, initiative, writing, math, diligence, and so on.

We outlined the opportunity to the kids, who signed up eagerly.

The 7 year old is a work in progress on this. She's earned some, but isn't yet 100% at the living it fully place. She does grasp the concept. She has an invoice, has some cash stashed in her bank, sometimes asks for work, sometimes takes work, in progress. The key lessons are there with her, though. In the store, she wanted a $2 place mat, "It's only $2!" she pleaded. "Okay," I said, "You have enough cash to buy it. Is that how you want to spend your money? Or do you want to keep saving for the dolls?" She opted to keep saving. On another occasion, she started to ask for something but cut herself off, explaining, "It's a want, not a need, and I don't want to spend on it right now, or ask you to."

Joy Decoration by Petr Kratochvil
I may have indulged in a brief daydream sequence of a happy dance with confetti blowing around me.

The 10 year old took to it like a champ. She identified a toy she wanted desperately. It cost $108. However, you had to order it through the Internet, so we discussed projected shipping and tax, then went through the process of starting an order to make sure of the final amount. She needed to earn about $125.

We discussed average amounts for chores, from about $1-$5 max. We looked at how much she'd need to earn per day to have enough by the end of the summer to get the toy. She had her goal, and she worked out a plan. She set up her invoice page, including adding a column for running total so she could see her progress.

I definitely indulged in a long daydream sequence of happy dance, with peppy song and confetti.

Since June, that child has worked diligently. She's taken on tough tasks such as sweeping the drive and sidewalk after the weekly mowing. She's taken on yucky tasks such as scooping the yard of pet poop before the weekly mowing. She's taken out garbage and recycling, sorted recycling, emptied dishwashers, swept floors, vacuumed, dusted, and more.

About half way through, she got discouraged. "This is so hard, I'll never get there, I'm tired..." and so on. We sat down and calculated how far she'd come, how much to go, what she needed to do to get there, how she could maybe earn a big chunk to feel a big progress, and...she dug back in and kept going. A couple of times she'd be tempted by something in a store and we'd have the "weighing pros and cons" talk and she'd decide. Each time she decided to skip the tempting item and keep saving for her treasured toy.

One day she ran down the stairs, clutching a piece of paper, yelling happily, "I DID IT! I DID IT! I EARNED ENOUGH!!"

That day we sat down and ordered her toy. She handed me her invoice, I handed her the full payment, she marked her invoice PAID, then handed the money back to me and I ordered the toy with my credit card. I know it would have been satisfying to hand cash to a clerk but this seemed to work for her.

Then we waited. Seven to ten business days. Because, even though she wanted it right away, it wasn't worth the extra work and wait to earn the overnight shipping.

This week the toy arrived. She is delighted.

"It means so much more because I EARNED IT," she told me.

And so it does.

Thumbs Up by Petr Kratochvil
Like her sister, also, she has become wiser about spending. On our recent vacation, I gave them, as usual, a souvenir budget. Her 7 year old sister spent smartly, finding a deal and buying two things on sale. But spend she did, and quickly. She doesn't regret it, but later, there was a sad moment because she saw another thing she liked. Ultimately, though, she decided she still liked her purchases best. My 10 year old, though, was patient. She waited until the end of the trip, measuring and evaluating each thing for its worthiness. In the end, she decided to go to a nursery and buy a plant. She found the one she wanted, under budget. She wanted something that grew and lasted, not another thing to add to her room. Another thing to tidy. And she didn't spend every dime. "I just want to find something worthwhile," she said, "And luckily it costs less! So we can save the rest."

I'd end there, happily.

But the real ending comes only yesterday, when, while out, I saw something tempting, on sale.

"Oh Mom," said my 10 year old, "Do we really need that?"

"Yeah Mom," echoed my seven year old, "Or would you rather save that money for something more important?"

And there you go.

My kids have learned (will continue to learn) how to earn, how to save, how to spend in a smart way, and the value of a dollar.


Mary said…
Oh my goodness! I am so inspired by this story. I absolutely intend to try it at our house. My kids NEVER save their money and waste it on such junk. I've felt bad about not teaching them better, though I do encourage them to save. This is such a better system than just advising them to save their money with no plan or structure. Thanks, Julie!
Julie Pippert said…
Mary, you're welcome! So glad you found some inspiration. Let me know how it goes.
Anonymous said…
Julie, i dont havt kids but i guess both me and my husband use the need vs want philosophy whenever we are on a savings spree. And trust me it works wonders, else we just dont know where the money goes. Its becoming a habit now for us.

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