Should You Pay Your Kids for Good Grades?
Regardless of whether or not your child needs incentive to get good grades, there are several positive results that can come from paying them when they do well in school. Some students are naturally driven to get the best grades they can: the reward is the grade itself. For other children, especially for subjects they may not be particularly fond of, providing an additional incentive could have a major impact on their school performance.
With half as many teens working today than did just twenty years ago
, while as The New York Times
explains, under increasing “pressure to excel in multiple academic and extracurricular pursuits,” paying them for their academic efforts can both give kids access to spending money and also allow them to prioritize their school work.
But paying children for good grades can happen long before high school, and might even be more beneficial the younger you start, teaching important behaviors—like delaying gratification—while habits are still forming. In this post, we’ll discuss how this parenting technique may improve your child’s performance at school, but also teach them valuable financial lessons along the way.
Benefits of Providing Kids Incentives to Get Good Grades
Regardless of whether or not your child needs the extra incentive to get good grades, there are several positive results that can come from paying them when they do well in school:
How much should you give your child?
- It can foster a good work ethic. For many, education is seen as a means to prepare children for the future when they will need to support themselves. In the “real world,” employees who work the hardest and do the best at their jobs are rewarded with raises and bonuses. Having a paying system for schoolwork that better mirrors eventual employment can help foster the sort of work ethic which will help them thrive later in life.
- It shows that your family values education. Your children already have a good understanding of what you value based on where you are willing to put your hard-earned cash. Whether it is purchasing healthy food choices, setting aside money for family vacation time, contributing to church each week, or buying your family a nice home. When you pay your children for performing well in school, you are also showing them that you value their education.
- It teaches children how to manage their money. Not only does it show your kids what you value, just like giving your children an allowance for chores, having financial assets to manage from an early age teaches your children valuable life lessons.
- It can save you money in the future. As Lynnette Khalfani-Cox of Ask the Money Coach explains, finding ways to encourage your children to perform better in school can actually be a “strategic investment.” Why? Because “high-achieving students are more likely than other classmates to earn scholarships and merit-based aid when they enroll in college.” A few dollars now could go a long way down the road!
What you choose to pay your children is up to you, but you might consider assigning each good grade a dollar value, or a certain bonus based on their GPA or honor roll status, increasing the amount as they get older to maintain the lure of the incentive over time. Many parents will tie the dollar amount into the child’s grade. For instance, in fourth grade, a child would receive $4 for every “A”. Lastly, consider tying the reward in with some kind of savings goal to further the financial lesson.
Other Ways to Teach Financial Literacy to Kids
As mentioned above, paying children for good grades is only one aspect of giving your children a solid set of financial literacy skills. And the earlier you start—even before children start receiving grades—the better. In fact, researchers David Whitebread and Sue Bingham at Cambridge University have found that our basic habits for money management, including delaying gratification and planning for the future, are set by age seven. The fact that so many advertisements are directed at children makes the teaching of these skills that much more important. As they write in their report, Habit Formation and Learning in Young Children,
“because of their increased spending power, children and youth have become a valuable target market for advertisers; web sites and other forms of new-media content specifically designed for teens and children have escalated in recent years.” By setting your children up with good habits early on, they can avoid making poor spending choices later in life.
If your children are too young to receive money for grades, there are many other ways to get started on their money management habits
. Don’t worry if your children are older; kids of all ages can benefit from some dedicated financial education. Here are the most common ways parents can help their children to better understand the value of a dollar.
Make Them Earn Their Allowance
Children in the U.S. currently earn about $500 per year
on average in allowance—a sizable chunk of change! While it’s important for children to do their fair share around the house, having them earn their allowance for going “above and beyond” can allow them to draw the mental connection between income and personal effort, showing them the value of hard work.
Encourage Part-Time Jobs and Small Gigs
Children from a young age can learn responsibility by having work to do outside of the home. Whether it’s as simple as helping a neighbor or, as they get older, getting a part-time job during the summer or after school, there is no substitute for the lessons learned by working for others will convey to your child. Here are some ideas for how children can earn their own money, by age.
Pre-K and Up
Children can help grandparents and neighbors with household chores from weeding to shoveling snow. With your assistance, if they are younger, they can also watch pets or water plants while others are away on vacation. For younger children, consider having them help organize a yard sale, where they keep the profits of selling their own toys and clothing they no longer use.
Middle School and Up
Once children are older they can move on to other, more advanced options. These could include mowing neighbors’ lawns, dog walking services, as well as the classic newspaper route.
High School through College
The percentage of teenagers who have regular employment continues to decline.
However, having a part-time job (with less than 15-20 hours
is important, according to College Board) that doesn’t interfere with other activities not only teaches financial responsibility, but can help offset the costs of college, car purchases, cell phones, and other big-ticket expenses they will encounter at this age.
Have Them Contribute to Purchases
While college and cars are costs that young adults can certainly contribute toward, you can also encourage your younger child to earn and save money to help pay for things that they want. This is especially true when the demand for a particular toy, outfit, or other item falls outside of standard gift-giving holidays. Asking your child to pay for at least half of the cost will give them a better sense of the value of goods, as well as how much effort it takes to work for them. They’ll also learn how to prioritize their spending and set savings goals (and stick to those goals) in order to make bigger purchases.
Open a Bank Account
Lastly, teaching them fluency in the financial tools they will need later in life—like banking accounts—is vital to having financially-savvy children. Though children can certainly save cash in a piggy bank when they are small, as larger and larger amounts are involved, they’ll need the security of a bank account to keep their money safe from loss or theft (or overspending!).
Many banks offer accounts just for children that have no fees and other services specially designed for younger customers. At First National Bank and Trust, we offer a number of Customer Rewards Accounts
including our popular First Choice Savings Account
with special Kids’ Club Membership for children age 13 and under. Kids receive their own membership card, prizes for making deposits, and can even earn cash for good grades.
Visit one of our 16 full-service branches
located throughout Southern Wisconsin and Northern Illinois to learn more about opening a savings account for your child.
It’s never too early (or too late!) to teach your children to make smart financial choices.