How to Teach Your Kids to Earn Money

By Andrea Travillian

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Teaching our children different skills and life lessons is one of the hardest tasks that we have as parents. It can often be overwhelming what we need to be on the watch for and teach them as they grow older. I myself often wonder if I will ever be able to teach Max everything he needs before he turns eighteen and leaves. (This is of course the ultimate goal: that he leave).

One of those many things we must teach is how to handle personal finance. Unfortunately it is one of the commonly looked over items. It is rarely taught in schools, many parents do not know where to begin and it can feel like an item that is just too much to take on right now.

Here is the catch 22, teaching our children about money is one of those things they need in order to successfully leave! So if they are not taught how to earn money and manage what they do earn, they will not leave.

So where do you begin? Over a series of articles I will walk through exactly how my husband and I have been teaching our son Max, who is now 5. For this post we are looking at why to start your kids early and how to teach them to make money.
The Younger the Better

We started Max on his financial journey at the ripe old age of 3 ½. I know this may seem early, but here is why it is good to start them early.

1. The younger they are the more they will still listen to you. They have yet to hit the age where mom and dad do not know anything.
2. The younger they are the less influenced by society they are. As kids grow and get into school, watch TV and even watch you they become more influenced by what society teaches. This is not always what you want to teach them and it becomes harder to teach them your view.
3. When they are young the basics can very easily be broken down to a level they understand and will remember, not as many “ya buts”. For example: when we had the debt conversation with Max we used a transformer as an purchase example. We then asked him if he would rather wait 4 weeks and save $10 or have us buy it for him right now and then he could give us $20 latter. He honestly looked at us like we had three heads and said he would wait and only spend $10.
4. The younger the more ingrained and natural your teachings will be, so even if your child departs from the teachings they tend to come back as they have your lessons as a beginning reference point.

Put them to Work

The first thing we need to teach our kids is that you need to make money to have stuff and to live. If they don’t know how to make money there is no need to teach them how to manage it.

Commission vs Allowance

Max gets a “commission” for doing certain chores and not an allowance. Plus he is required to do general house chores because he is part of the family for no pay.
Why do we do it this way? Because in life you get paid for what you do, plus you just do something’s because you are a good citizen. You work you get paid, you pick up liter to keep our cities clean and organized.

Why not an allowance? What does an allowance teach? That you get paid to live? I don’t know about you, but I don’t get paid to live, that would be really cool if I did but so far I cannot convince anyone to do that for me.

Yes there are some rich kids who never have to work for their family money, but most of those families over time end up losing their money because they do not understand the value of money. Tom Stanley of the Millionaire Mind has even compared kids that were given assistance from their parents and those that made their way on their own (as young adults) and those that did it on their own made more money in their life time.

The Chores

For the tasks that Max gets paid for we pay Max a small amount (a quarter) per chore that he does. In the beginning it was easy things like put away clean silverware, set table with Dad or pick up toys. We have now moved on to tasks such as take out the trash, water the plants, and clean toilets. (Yes he actually cleans the toilets and does a good job – inside and out!)

We re-evaluate his list about every 6 months or so to make sure that they are still age appropriate. In addition it keeps him interested by changing things around.

His house required tasks are things like clean room, put away his stuff in the right place when he gets home and anything else mom says to do.

Start teaching your child to earn money today and you will be amazed at where it takes them both today and tomorrow. My favorite example of Max taking these lessons outside of the house was at a tailgate, where Max charged a guy to retrieve a soda for him. Gotta make money somehow!