Chores vs. Extra Jobs

In order for children to learn the value of money and how to earn it at a young age, you can give them an allowance for doing extra jobs around the house. Extra jobs are not weekly chores they are assigned as a member of the household. Extra jobs are the odd jobs around the house that aren't done on a regular basis but which could be addressed like cleaning out the garage, organizing the basement, washing windows, mowing the lawn, or other yard work. You can make a determination between chores, like cleaning their room, which they should do as part of their duty as a household member, and extra jobs that will earn them allowance, but give them the opportunity to stretch themselves to earn money for the things they want when they are young so they start to build money sense and figure out responsibility. Extending the opportunity to earn allowance through extra work will teach them the value they can contribute to their surroundings and give them a sense of their earning potential.

How much is too much?

The next question you have to ask yourself is how much you'll actually pay your children. How much money is too much and how much is too little? This can be determined by the jobs your children do to earn the allowance or by the age and maturity of your children or a combination of both. Children who are six or seven don't need nearly as much to convince them the job is worth doing as a child who is twelve or thirteen, but you also want to reward your children fairly. Get your children's input on how much the job is worth. They will tell you how much they are willing to work for and you can negotiate from there. This teaches them to determine the worth of their time. It will translate over to determining how much their time is worth when they are older and help them develop a sense of accomplishment. In the workforce, you determine your own worth by how little you are willing to take for a job. Your children can learn the same lesson early on through the allowance system.

Future Effects

If you determine that you will use the allowance system with your children, you'll see them developing money management skills at a young age. They'll understand the concept of getting paid for performance and skill. The higher paying jobs in the work industry are those that are based on performance and skill rather than time. This will help them see the value in themselves. An allowance based on performance rather than just a set amount each week that is given to them whether they work or not teaches them responsibility, work habits, and sound personal finance principles at an early age. It will help them see early on that they can achieve their dreams, get what they want when they want it, and to be creative.