Old-fashioned allowance had its place, but can it actually do more harm in today's society than good? We look at why creating jobs at home for kids to earn money is better than the "pay up" mentality of just a few years ago. Here are five great consequences that can come from the experience of having kids, at any age, earn their keep. (For related reading, also take a look at 7 Things Kids Can Definitely Do Without.)
TUTORIAL: Introduction To Banking And Saving
Society, as a whole, generally frowns on the concept of a capable adult receiving weekly payment in return for doing absolutely nothing. This idea of unearned benefits is one that understandably has a place - especially in a short term arrangement - but is not the goal that most parents have for their children. Professional mentor "Marnie" of Marnie.com makes her opinion of this very clear to her own children. "Allowance is simply welfare for children. Within a matter of weeks, the child feels entitled to receive money, at specific intervals, as payment for not working."
What then, can parents do to nip the feeling of entitlement in the bud? As soon as they are old enough to pick up their own toys, for instance, it's time to expect some additional and age-appropriate chore work from them. While kids that don't work will still have their basic needs met, the video games and fancy extras will wait until they are willing to pitch in around the home.
Working Towards a Goal
One of the obvious benefits of having kids earn their cash is that it helps to draw a direct correlation between work and rewards. Erica Sandberg, author of "Expecting Money: The Essential Financial Plan for New and Growing Families" couldn't agree more. "As a mother to an eight year old daughter, I put her to work all the time. Right now Lillian is saving for the new American Girl doll, which is very expensive."
Tasks that may be appropriate for a child in this age range include organizing toys, clothes or books, and folding and putting away laundry. By starting at an age when kids begin to ask for particular consumer items, you can help them to see that nothing in life is truly without a cost.
Valuing their Possessions
If parents find that kids are continually leaving expensive gadgets or collectibles underfoot, it may be the perfect time to stop buying these items for them altogether. By having your son or daughter pay up for their gimmee list, they will associate all the hard hours with the value that item now has for them. While painful for a parent to watch, just one instance of leaving a hard-earned possession on the bus, in the wash or where the dog can get it is usually all it takes to learn this lesson.
TUTORIAL: Budgeting Basics
Prioritizing Needs vs. Wants
Parents have the daunting task of feeding, clothing and caring for the basic and very important needs of a child. They do not need to feel responsible for succumbing to every fashion trend or consumer fad, however. When kids identify that they "need" anything that isn't truly an essential, this is the perfect time to incorporate an at-home job. Kids can learn so much from the process, and it will better equip them to differentiate between the "must-haves" and the "nice-to-haves" as an adult. With the glut of consumer credit now available to adults, this is a skill that they can't afford not to master.
Creating an Entrepreneurial Spirit
Not only can having your child work for you from home help them meet significant short-term goals, it can instill just the initiative they need to accomplish big things in their adult life. Watching a self-employed parent work from home, for example, can be one piece of the puzzle, and if kids are enlisted to help in the family business, their chances of becoming a self-starter increase dramatically.
Business owner Erin Cheyne shares "when I was about seven or eight years old, my dad quit his day job and started his own company full time. I started getting an allowance when he needed help sealing and putting stamps on about a hundred letters in those first few weeks." This ambitious task was a main factor in the business leader's own success.
The Bottom Line
As with any important lesson in the life of a child, the values taught with a chore-based earnings system will take time to truly grasp. Mistakes will certainly be made, and it requires more discipline than just handing over a $10 bill every Friday. If done correctly, however, the life application can have an enormous return, one that goes far beyond the value of the actual currency. (For additional reading, also check out 5 Financial Lessons You Must Teach Your Kids.)