“It’s your turn to take out the garbage.” “Those dishes aren’t going to do themselves.” “Clean your room, or no computer time for you.” You’ve tried cajoling, or the threat of punishment, or even a good old-fashioned guilt trip to get your kids to do their chores. But Steve Siebold, author of the book How Rich People Think, believes that tying your kids’ allowance to chores is a smart way to get stuff done and raise a budding entrepreneur. “Kids should help around the house, but the reality is most kids don’t want to,” says Siebold. “In the real world, adults have things they don’t always want to do either, but they have to do them in order to make money. We’re teaching kids from an early age that money is a dynamic medium of exchange for goods and services.”
DON’T BREAK THE BANK If money is tight around your household, the idea of handing cash to your kids for mowing the lawn or making their bed may seem potentially bad for your budget. But tying your child’s allowance to doing chores around the house has more to do with a lesson learned than it does with making big bucks. “We’re talking about a few dollars here and there for different chores, nothing that will break the bank,” explains Siebold. “The more important lesson is that the child will learn not to have an entitlement mentality, or to expect to be given money for nothing.” Make sure to set a dollar amount for a chore ahead of time, and stick to that figure once the task has been completed.
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If money is not an issue for your family, you may be worried about handing your children cash whenever they ask for it. All parents, rich or poor, should be concerned about teaching their kids the value of money. “All parents need to understand that they are the primary creators of their kids’ belief systems, and they should consciously and carefully craft every belief about money they pass on,” says Siebold. If your family is doing well financially, you still have the same lessons to teach as a budget-conscious mami.
PROBLEM-SOLVING = MAKING MONEY We moms do dishes all the time, and we don’t get a paycheck for it. Dads pitch in, too (we hope). So why should our children expect a handout every time they perform KP duty? If the feeling of “paying” your child to perform ordinary household tasks leaves you with queasy feeling, ask your child to take an active role in the process. Siebold suggests having your kids to come up with their own ideas for taking care of problems around the house. “If you don’t want your children to feel like they are being paid for a chore, get them to start looking for chores that need to be completed on their own, without you having to ask them to do it,” he says. By coming up with their own solutions to household issues, they are learning about the connection between money and problem-solving. “That’s how people build a lot of wealth in the real world,” says Siebold. “The more problems you solve, the more money you make.”
WHO PAYS FOR THE XBOX? So you and your child have come up with a system for earning money for errands that you’re both comfortable with. Now what? When Junior decides he wants an iPod Touch or Nintendo DS, you may balk at the idea of giving him money for one when he’s been earning money around the house. On his end, Junior may not be content to wait until Christmas for that coveted electronic device.
There are several different approaches you can take with this scenario. You can teach Junior how to save up for a coveted item and agree to match him; for example, once he saves up half the cost, you pitch in the other half. You can insist that he use his own funds entirely, which means saving earned money as well as monetary gifts received on holidays, his birthday, and so forth. However you decide to handle the scenario, stick to it. “Parents need to be firm with their kids in this case,” warns Siebold. Waffling—or simply giving in to your kids’ demands—won’t benefit anyone in the long run. As Siebold says, “When it comes to material items, teach your children to overlook the short-term satisfaction of expensive material possessions, and look forward to the long-term results of financial freedom and abundance.”