I was unloading the dishwasher recently when my daughter started grabbing all of the silverware. She headed over to the silverware drawer to put it away, and for the first time, I had a helper. Even if quality control isn’t quite as strict and even if the small forks intermingle with the bigger forks, it doesn’t matter because I have a helper. It took all of 10 seconds for me to start fantasizing about the day when she can do more than the silverware, when I can delegate the entire dishwasher to her and my son.
I’m obviously not going to be a slave driver, but I think it’s important for kids to have responsibilities and chores. I always busted my butt in the summer to help clean the house. My brothers “helped”…but my mom knew who really did the dirty work. And while I didn’t have a weekly allowance, I was rewarded frequently with a little cash flow. It helped me learn that hard work earns you a bit of money. That’s why I love these tips today from Steve Siebold, author of the book How Rich People Think.
As kids have free time in the summer—and want money for summer activities—Siebold says it’s the perfect time to teach kids important money lessons. And one of the best ways to do it is to tie a child’s allowance to chores. Here are a few of his tips for teaching your kids to value hard work and the dough they earn!
Kids’ Allowance: 5 Tips
1. Chat cha-ching. Sit down with your kids and set a price on all chores that go beyond the basics like making their bed and cleaning their rooms. Keep the amounts small and do your research. For example, if a chore is mowing the lawn, find out what the going rate is in your neighborhood and don’t exceed it.
2. Chore schedules. You 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 for 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?”
3. Consistent enforcer. Parents must be consistent about enforcing that chores are completed. 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.
4. Earn to build. When you tie an allowance to chores, you’re teaching kids important lessons about earning money. Saving money is important, but the fastest way to building wealth is by finding ways to earn it.
5. Big picture. Remember 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.
Thanks to Steve for the tips! When did you start giving your kids an allowance? —Erin