Making the Connection to Commission

Getting kids to associate work and money


The average child is getting so much allowance money these days that you might confuse it for Social Security.

The Financial Literacy Commission of the American Institute of CPAs recently released a survey that says the average American kid gets $65 a month to spend as they like, above and beyond what parents buy for them. Even more shocking (or not), just 1% of the parents say their wee ones put any of the cash into savings.

These kids are this close to being politicians-in-training.

What is dangerous about allowance–just giving money out–is that the child doesn't associate money with work. The earlier they start to learn about doing work and getting paid for it (don't forget the budget), the more prepared they will be for the real world.

If a son or daughter gets stuck in the "bring me money so I can do what I want" mindset, it will be incredibly hard to break them from that thinking. They might struggle to hold onto a job as they get old enough to live on their own. They might even want to move back in with you. Cue dramatic organ music.

Replace allowance with commission. Work and get paid. Don't ... and don't. Just like the real world. Start teaching your children that lesson early so they gravitate toward it throughout their lives. The benefits go beyond just keeping their room clean. They will learn responsibility, and that spills over into other areas of their lives.

And make sure to set reasonable pay for chores. A child who has to work hard and save money for a while will get a more realistic view of money (and the work that goes into getting it) than someone who does a couple of chores around the house and suddenly has enough cash to buy a video game or the shirt they want. Pay should be based on how hard they work relative to their age.

Sitting on your duff doesn't earn money. Work does. Are your kids learning that?

Source: Shine

Reader Comments (7)

Remember, they don't get paid for EVERYTHING they do... some stuff is required because you are a member of the family (i.e. cleaning up your dishes after dinner, doing your homework, etc).
Member at 4:54 PM, August 31 2012
Dave's "Junior" books & give/save/spend envelopes have been really helpful for us to teach our 5 year old about commission. I agree with the last comment though & at times it's difficult to explain at his level what he's getting paid for & what's expected. (More teaching on that would be helpful!!) At times I feel like my kid is getting too money-driven because we did introduce this so early, but at other times I'll have people actually stop & commend me in the store when they hear him say, "Mom, maybe I could save up my money and buy this toy!"
Member at 10:49 PM, August 31 2012
I love it, I use it and the kids are coming along nicely in their financial education. We are still working to get them to understand gving and tithing, though.
Member at 5:12 PM, September 02 2012
How about the opposite side though? My kids have done some very demanding work without pay for different organizations. I think my kids have learned the value of community service and investment in their future (scholarship application perks) through their work they've done without compensation. I think once kids see the connection to working for money they also need to see working for other purposes.
Member at 8:02 AM, September 03 2012
The new FPU Jr. package is amazing in this regard. And not only does our 5 year old love the material, but his younger 2 year old brother is trying to work for commission, too. They both have the envelopes (and banks), so they seem to be applying the principles MUCH sooner than we did!
Member at 8:21 AM, September 06 2012
This is very true. I wasn't taught early in childhood and as an adult I got in a mess even before graduating from college and getting a job. I've had to learn the hard way, so please do the favor and give the blessing your kids by teaching this things.
Member at 3:58 PM, September 06 2012
We refuse to tie chores to money, as household tasks are a required part of living (I don't get paid for chores as a stay-at-home mom, do I?). Allowance in our home is doled out as in the form of a weekly expense fund. Our boys can spend it on junk or save up for something ... their choice. If they spend it all at the beginning of the week and see something later on that they want to do or have, they're out of luck. On the other hand, if they've saved up, they're allowed to spend their funds - but they are also asked if they're saving up for something bigger. It's working beautifully so far.
Member at 2:44 PM, July 21 2013