22 June 2011

Getting Paid

Our pay system for our boys is constantly evolving, not because it doesn't work but because as they get older, they are able to take on more responsibility.

The other day a very dear friend asked me what kind of system we use, so I thought it was a good opportunity to share what we use.

I'm sure there are many many ways to teach kids about money, and I advocate this one only because I've had experience with it.  We are big fans of Dave Ramsey...we used his advice to become debt free several years ago utilizing the debt snowball.  We find his teachings to be very sensible, solid, and in line with what we believe.

So, when it came time to introduce money to our boys, we used his idea of commission work.  I highly recommend checking into the basic principles here.

To summarize, we have three main categories of work, which we have labeled

1.  Family Jobs
Family jobs are those jobs that are not payable, jobs that should be completed because we are part of a family and we work together.  These jobs include things like picking up toys, setting the table, etc.  We don't list these jobs; rather, we just have a blanket statement that mom and dad determine which jobs fall into this category.

2.  Commission Jobs
Commission jobs are above and beyond family jobs.  These jobs get put on a chart, and when someone completes a job in this category they get a mark.  A mark corresponds to a certain amount of money, and at the end of the week the marks are totaled to determine how much money each boy has earned.  They are then expected to give at least 10% (we tithe, others make a charitable donation) and save at least 10%.  The rest can go into a spend category, which is for small purchases and can be spent on anything within reason.  Parents, of course, get the final say.  The saving category is for larger purchases.  When a boy sees something they want to have, we put a picture and price up by the job chart, to help motivate them to continue working.

3.  Fines
The last category, fines, is for daily tasks that are expected to be done.  If they are not done, they earn a fine, which is subtracted from the total earned at the end of the week.  We charge fines for things like shoes and backpacks left out, dirty clothes on the floor, and doors left open.

In addition, I've started giving each child a weekly chart to help remind him of our expectations.  I don't nag about commission work to be done or the possibility of fines...they just check the chart.  And, if they choose to not work, then they have clear consequences.

If they did every possible job all week, then their potential earnings is about 5 euro, which we feel is a lot of money for their age.  However, with all the playing they still do, their average is more like 2 euros, give or take.

It is amazing how quickly they figured out the cause and effect aspect.  I'm always interested to see how their personalities reflect how they choose to spend their money.

This system works well for us because it offers a clear link between work and money.  Even though they are only paid once a week, they can check the chart all week long to see how they are doing.  Our hope is that they are learning healthy and responsible financial habits that will carry into their adult years.

Anyone else have good suggestions for giving kids money or teaching them how to earn money?  I'm always open to new ideas, and I'm sure my friend would love to hear other suggestions as well.


  1. This is exactly the type of responsibility chart I have been looking for. What modifications have you made after four years now? How many family jobs do you recommend before commission starts?

    1. The number of family jobs each child has is directly dependent on their age. After four years, we now have older kids who can handle a lot more responsibility (think laundry, changing sheets, cleaning bathrooms, etc.). Our system has now evolved where each kid has 4-6 jobs per day, depending on their age and the size of the job. They are able to earn up to half their age in a week for completing these jobs without being told. I also offer 2-3 commission opportunities on top of that. So, the potential is there to earn a significant amount of money. But, if they need to be reminded about their family jobs, their potential for earning goes down. The littlest one still follows the above system as is. Make sense? Maybe I should make a new post...