Teach Kids Business Sense Early, Change Their Lives Forever

Learn the value of a dollar

When is the last time you asked kids to do chores and they smiled, got right up, and gleefully did whatever you asked of them?

Never, right?

Our kids have age-appropriate chores to do around the house to make money. In the real world, you work to earn a paycheck. As parents, it feels like we’re always being asked for money. Here comes their hand out again, asking for more green stuff to put in it.

From an early age, we wanted to instill the value of a dollar. We’d let the kids buy little things or a pack of gum they desired, and let them count out the money to the clerk to complete the purchase. The clerk was usually kind and obliged a kid’s effort to learn how to count money and make purchases. Knowing the value of money is essential. The earlier kids understand money and what they can do with it, the earlier they learn how to handle money well for themselves.

It’s good business sense.

I got my first credit card in college and didn’t know how to use it well. Luckily, due to high school Economics class, I’d learned how to balance a checkbook. In Junior Achievement, we built a business and had to create a business plan and monitor the business’s finances. My group did reasonably well. I can’t remember the company we started, but I remember that our business was thriving in the end. We earned one of the top three awards for our efforts.

When you learn how to handle money at an early age, you can do things that other people don’t learn until they are into adulthood. Some people never learn how to handle money, so we want our kids to have a good sense of what to do and what not to do, with their money.

Every time payday comes around, kids have their hand out for their weekly allowance, and the conversation begins about what chores they’ve done and how well those chores were completed. We ask: “If you graded your effort like a grade in school, what kind of grade would you give yourself?” These questions come up repeatedly:

• Did you have to be reminded to do your work?
• Did you do a good job?
• Did you do the job on time?
• Are you proud of the work you did?
• If mom and dad weren’t paying, how much money did you earn for the kind of job you did?

Often we’re met with downward glances and nervous flinching while kids sway their bodies and contemplate their efforts versus potential rewards.

Well —

I ran out of time, forgot, didn’t want to. But, I still want the money.

“Do you think mom and dad can share that philosophy with their respective bosses and still get paid?”

Umm — Probably not.

Enter Greenlight.

To be clear, I am not an affiliate; I’m a parent who likes this product because it makes my life easier. It teaches kids how to use their money as a business. I don’t think it’s too early for kids to learn these skills. Ninety-three percent (93%) of successful entrepreneurs say their success results from their childhood experiences, according to Inc. If you ask me, it’s a good thing for kids to learn how to balance a checkbook and to spend within their means.

When the kids were around age 4, they started marking a chart on the fridge when they cleaned their room or made their bed to earn quarters. Later, their chores progressed adequately to match their age. One takes out the trash and the recycle, vacuums, or mops while the other cleans bathrooms and folds laundry.

Inevitably, sometimes they want to buy something, and we would cough up the money upfront and allow them to pay us back when we get home. On occasion, the item kids want to purchase costs a little more than the money they had saved. These scenarios present the perfect opportunity for conversations about interest, debt, and loans.

When you say you’re going to pay someone back, you’re indebted to deliver the work for the thing you’ve already been given, even if you don’t want to do the job. These are suitable lessons for kids to learn at a young age.

Greenlight eliminates a lot of struggles. What is it, and how does it work? It’s a debit card for kids. There is a small monthly fee. It’s less than a cup of good coffee per month, for up to five kids, and eliminates most of our pain points. Our bank account is tied to their accounts so that we can automate money transfers from our account onto their debit cards. Kids can check the app on their mobile or computer to see that their payment has been received.

While you can automate payments every Saturday, for instance, we’ve elected to stop the automation. The kids get to make a payment request equal to the fee we’ve previously agreed upon for the work they’ve completed and whether they deserve full or partial payment for the timeliness of a job well done. Extra accountability, if you ask me, for kids to learn how the real world works. Parents can pay the request or decline to pay it if they feel it is different than expected.

Gone are the days of running to the ATM for cash or raiding the penny bank so kids can hold bills and coins in their hands. Our economy is mostly shifting toward electronic forms of currency, even though financial expert Dave Ramsey says, “Cash is still king.”

Final Thoughts

Paying kids for household chores or allowance can be a burden, but it doesn’t have to be stressful. Make kids accountable for doing good work on time by requesting payments for the work they do.

Shopping is straightforward because kids use their own debit card, instead of paying parents back when they forget their money at home. When you travel, kids can use their debit card anywhere a MasterCard can be used.

Stress about money falls away, and kids either do their work or don’t get paid.

I’ll bet you know some adults who can benefit from these principles. Instill family money values in kids early and watch them grow into entrepreneurs who earn 25% more than the general population.

Foster business knowledge in kids and watch them succeed in life.