earning money
6:00 AM
As a parent, there are so many of life’s little stressors that you want to protect your children from. The reality of earning (and spending) money should not be one of them. Earning money can help teach your child important life skills that will make them more responsible now and into adulthood. Whether you decide to start paying your eight year old to do chores, or let your fifteen year old find a part-time gig, earning money will benefit them and you.
Learning the Value of Time
Kids have a hard time gauging the time and effort that goes into any task, which can lead to hilarious and frustrating situations for parents! Who hasn’t had a child ask for help with a science fair project… the night before it was due. At 8:30 pm. When they hadn’t even started…
When children start earning money for their time spent, they learn the value of that time. With some critical thinking skills, kids will start to prioritize how they spend their time to get the most value. They will also think about how much their time should be worth, a skill that will develop self-advocacy later in life.
If kids equate money and time, they may start to look at the things they spend their money on as worth (or not worth) their time. Do they want to buy a giant bag of candy that costs $20? Yes. Do they want that same bag of candy if it costs four hours of cleaning out the garage? Maybe not. Kids can be responsible for their own time and money, and learn to make smarter choices.
Building a Work Ethic
Some people are just born hard workers, right? Wrong. Children have to be taught the value of hard work, and a good work ethic should be nourished. There are a lot of ways to do that with your kids, but paying them for their work is really effective.
Kids who earn money learn to set goals, and they connect their hard work with reaching those goals. Eventually, money can be taken out of the equation. The feeling of achievement is a great incentive.
Finding a Balance
Being responsible for our own wellbeing is a difficult lesson. We overextend ourselves without regard for our own health. We let our kids overextend themselves, too, but then we take the responsibility for it. Earning money and setting goals allows kids to create their own balance. They have to decide which incentive is more powerful, instant gratification or long-term achievement.
As kids make these decisions about the money they earn, they will start to figure out their priorities. A child who always wants to treat their friends to a movie and dinner might need more social time to be happy. A kid who saves for a trip to Europe has different priorities. Those priorities will help them make decisions in the future, between colleges, extra-curricular activities, and even career paths.
As kids grow into teens, those priorities become values. Their values help them find the right balance between money, meaning, and wellbeing. A teen with strong values can make smart choices. They may have to give up social time in order to make extra money for a big event, or give up their job to bring up their grades.
Part of learning how to balance your life is making mistakes. When your kids do overextend themselves, set the example by modeling your own selfcare routines, and help them figure out their own.
Managing Money
The best part about earning money is getting to spend it, but kids don’t always spend wisely. Fiscal responsibility can be the difference between struggle and success as your children grow into adults. Teaching them how to balance a budget, save for financial goals, and navigate the banking system is invaluable.
As soon as your child starts earning money, open up a bank account. Many banks offer special savings and checking accounts for minors. Your current bank probably has some sort of program for kids and teens. Once that bank account is open, navigate all the options with your child. Teach them how to make deposits, withdrawals, and check their balance.
Set long term financial goals with your child, like saving for a trip to Disneyland. As they work and save, remind them of the goal and celebrate small milestones. Add a bonus incentive by matching their savings at each benchmark they achieve!
Saving every penny is an unrealistic goal for kids. Make a budget that puts aside money for fun as well as long term goals. You can take this one step further for teens with jobs outside the home, and teach them how to budget for living expenses! Come up with an amount to cover “rent and utilities”, but put that money into a college savings fund. Your teen learns about real life budgeting, and saves for college. Win-win!
Being Charitable
Earning money can teach kids to take responsibility for their communities, as well. Charity and giving back is a privilege, and it brings deep meaning to the money that your child earns.
Write charitable giving into the budget that you set up for your kids, as well as your own budget. Share your favorite charities with your child, but help them find causes that they believe in, too.
Of course, being charitable doesn’t have to mean giving a monetary donation. There are a lot of ways that your kids can give back, especially around the holidays.
What You Can Do
Handing your kid twenty bucks for mowing the lawn is great, but with a little forethought your child can develop important life skills. Be supportive and help them work out the details. Talk to your kids about money, but don’t try to make decisions for them. Let them learn their own lessons. Responsibility is built through experience and time.
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