Money

Money talks.  It’s what motivates most people to get out of bed in the morning when maybe they’d rather not.  I don’t know many folks who would go to work if they didn’t get paid for it.  My girlfriend likes to say, “That’s why they call it ‘work’ because if it were fun, they would call it ‘fun.’”

At some point in a child’s life, money starts being fun.  When my son was little, he was motivated by all kinds of things that didn’t involve money.  His favorite reward used to be a trip to the library.  Now, he just wants cash, which ironically he spends mostly on electronic books.

We have house rules for how Kaleb handles his money, whether he earns it or receives it as a gift.  I gave him four jars when he was young, which he decorated and labeled Give, Save, Invest and Spend.  He puts one fourth of all his money in each jar.  His “Save” jar is for the fairly short-term, whether it’s for his first car or to help with college.  His “Invest” money he can’t touch until he’s at least 50, as I’m sure there won’t be any kind of social security benefits by then.  He’s used that money to buy stocks, bonds, precious metals and foreign currency.  He’s become a pretty savvy investor as he contemplates long-term growth.  He’s lost about as much as he’s gained in the stock market, but at least he’s learning there’s no sure bet.

The biggest complaint I hear about this system is how little he actually gets to spend.  I told him it’s good practice for adulthood since not many people can frivolously spend 25% of what they earn.  But when he got to the age that his grades really mattered, I decided to start paying him for those, to help increase his cash flow.

Many parents pay their kids an allowance for chores, but I don’t because the way I figure it, everyone has to do chores and no one gets paid for them.  Schoolwork is the most closely related activity a child does that prepares them for the working world, since it’s performance based. 

Kids don’t always think ahead enough to realize what grades do for them, but I know full well they open doors to scholarships and awards that in the end really benefit the parents.  I figure paying Kaleb for getting good grades now is much cheaper than paying for college later, if he’s able to qualify for scholarships because of them.  He gets small amounts of money for important exams and bigger chunks for final grades.  He’s yet to break the bank, but his grades are much better than if there was no money motivating his efforts. 

The only problem I’ve had with my system is that he’s a pretty smart kid and when he received a gift card one year for his birthday and realized he couldn’t divide it into four chunks, he just started requesting gift cards.