We place a lot of emphasis on our son not only understanding money and personal finance, but the concepts behind the money situations we encounter on a regular basis. In our efforts, we attempt to utilize words, terms and examples that he can understand and that are applicable to him as a six-year-old.
Therefore, when it came to setting up an allowance-type structure of payment for the work he does around the house, we decided after a time that we should not consider it an “allowance” per se. The Merriam-Webster dictionary defines the word “allowance” as, “a share or portion allotted or granted”.
Since our son performs duties to earn his weekly payout, and these funds aren’t just “allotted or granted”, we have decided to do away with the term, instead referring to his set earnings as “payday”. We feel it’s a more accurate term and one that will help teach him more about the real working world where money isn’t given, it’s earned.
Setting a weekly schedule
The first thing we did to help guide our son regarding his assigned work duties was something that most any employer would do for an employee, and this was set a weekly schedule. While we didn’t go so far as to outline exactly when he had to accomplish each of his duties, we made a list of his weekly duties and placed it on the kitchen refrigerator, a place we knew would serve as a constant reminder to all of us.
Bonuses and performance pay
Just as with many jobs, our son has the chance to earn bonuses and extra pay based upon his performance with his job duties. Things like helping out with the baby, doing extra cleaning around the house or just being a really great little boy earns him a little something special for going the extra mile. Don’t get me wrong, we don’t do this often, since then it wouldn’t be special (and we don’t want him to expect money for being a good person), and we don’t make it a lot of money. However, we think it’s important to begin building the monetary foundation upon which he’ll one day be working when out in the real world.
Promotions and increased responsibility
Now that it’s been just about a year — and we’ve hit summer vacation, a season when we’ve got a little bit more time to put toward around-the-house duties — we’re planning our son’s first promotion. His duties to this point have involved things such as:
- Helping take the trash out
- Clearing the table (mostly of his toys) for dinner
- Taking his dirty dishes to the kitchen after meals
- Tidying his room
- Feeding his pet frogs
Every year or so though, we need to re-evaluate these duties as his skills and abilities — and our situation — changes. The frogs have gone to froggy heaven. So that duty is being replaced with duties relating to helping out with the new baby (little things like bringing us bibs, handing us things during feedings, helping with toy pickup, etc.). And now that our son is older and stronger, he has been promoted to doorman, since our condo has a gate and multiple doors through which to pass. When we’re carrying the baby or groceries, our son now helps us by holding doors and unlocking our front door. For this upgrade, we will provide a small pay increase for his services to show him how promotions and pay raises work.
We hope that updating and upgrading these duties over time helps us provide him with a better understanding of what the working world is like, and acts not just as a monetary motivator but as a teaching instrument that shows him money isn’t just given, it’s earned.
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The author is not a licensed financial or parenting professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.