How Do You Teach Children to Earn Money?

My seven year old daughter has caught the money bug.  She wants to earn and spend money as fast as she can.  While she understands the value of money for the most part, she doesn’t understand it completely because she will want to spend it on gum and candy or cheap (expensive) toys in the checkout lane rather than save it for something bigger and better.  We are working on understanding the value of money, but that can be done better once children HAVE money.

So, how do your children earn money?

Many families use an allowance system. While I see many benefits in these systems (as long as they are not connecting regular chores to money or just seen as payment for being alive), they haven’t yet found a place in our family.  One reason for this is that our children are still quite young.  Another is that we can’t really afford to be doling out money each week to our kids just to have them spend it on junk or candy.  

We want them to learn to save, to pay tithing, and to spend responsibly, but we cannot always be their bank.  Especially when they want to save for something substantial.  

In the past, our daughters have earned money from our yard sales, lemonade stands, and doing extra, harder chores beyond their usual.  

After a big storm, for example, we’ll have them pick up sticks and pay them ten cents for a bag of sticks.  It gets the work done, doesn’t break the bank, and they are happy with earning dimes.  

Sometimes my husband will have them help rake, sweep, and bag the grass after mowing and trimming.  Again, ten cents a bag is good enough motivation at this age.  But it adds up VERY slowly. 

This week, my daughter fell in love with the American Girl Dolls.  Thankfully, she has willingly switched that love to the Our Generation Dolls available at Target for a third of the price.  But still, she needs to earn about $35 to cover the cost…but that doesn’t take into account 10% to tithing and 20% to savings.  So really, she needs to earn $50.  Which would be 500 bags of sticks or grass…Maybe she can buy the doll in 2 years at that rate.

This morning, I awoke to find her and my 5 year old collecting stuffed animals, drawing pictures, and putting price tags on things they were going to take to a couple neighbors to try to sell.  A small Care Bear for $5.  A drawing for $1.  This began a conversation about value of goods and market.  They weren’t too thrilled to learn their plan wasn’t going to get them far in their endeavors.

So we talked about the 3 ways to earn money:

1. Work
2. Sell
3. Beg

We all decided begging was out of the question.  So we evaluated each of the other two.  They could do work (like bagging sticks) but mommy and daddy only have so much work they need the girls to do for money.  Most of the work we have needs to be done for free.  The same goes for our neighbors.  I explained how long it would take to earn money that way since they are too young to do work that will earn a lot of money, like babysitting.

That left selling.  We talked about yard sales and lemonade stands and how they have a place, but cannot be done too often.  We’ve already done one this year and that’s all we’re going to do.  We’re also not going to sell things that we own (like stuffed animals and pictures) that are better given away out of the goodness of our hearts, especially to 77 year old men who really don’t need Care Bears and would rather be given a drawing out of love.

So then we talked about combining work AND selling.  I sell products online, but I have to work to make them.  What can the girls make and sell?  Keara wanted to crochet bracelets and necklaces…but who would buy them?  Or, she wanted to make bracelets out of beads, but her designs aren’t likely to draw a sale.  I want them to succeed, but I want them to do the work.  

Thus was born the idea to sell baked goods.  They can certainly (help) make cookies, breads, and such.  They can certainly go to our neighbors and invite them to order.  They can certainly deliver them.  So we did.

I was grateful to see my painfully shy daughter (when it comes to speaking to adults she doesn’t know) give her “speech” because doing the work and earning the money was more important than being shy. We were out for almost 2 hours and she received orders totaling $63.  This allows for the cost of goods sold, tithing, and savings, with just enough for her doll.  

Now, we need to bake a few different kinds of cookies, several loaves of wheat bread, and roast some cinnamon almonds, then deliver them next week.  I’m glad this is a three step process, where she can see that money doesn’t just come to you, but you have to work and it takes time.  I hope that as she goes thru this experience, she’ll understand a little better how valuable her money is because she’ll know better what it took to earn it.

I sort of wish that she didn’t get so many orders, so it wouldn’t have been so easy, but for now, this is a good place to start.  We’ll probably do it again in the fall with our Caramel Apples, but we’ll see how this experiment goes first.

How do your children earn money?