Do You Pay Your Kids for Good Grades?

Does an "A" equal cash-in-hand?

Is it OK to pay your kids for good grades? What about good behavior? Two money-minded parents debate the issue.

Does an "A" equal cash-in-hand?

This content is provided courtesy of USAA.

Pros

At our house, the mantra has always been “just pay, baby.” The kids know that when they come home with a report card teeming with A’s, it’s “show me the money” time!

We do give our kids a small allowance — which is contingent upon their helping out around the house — and we require them to use it for toys, video games and other discretionary expenses. We hope this sows the seeds of financial responsibility.

Grades are a different story. We tell our kids that school is their No. 1 priority and only “job.” Their report cards reflect their attention, efforts and focus over the entire grading period. I believe rewarding the fruits of their labor makes sense for three key reasons.

  • Setting expectations. In the realm of grades, it’s very easy to set clear expectations before the first day of class. The reward system should directly reflect your performance expectations. If your kids know what you expect, they’re more likely to meet your expectations.
  • Motivation. There’s stuff kids want and things they want to do. If they share the financial responsibility for that fun, then being rewarded for grades is a great motivator.
  • Recognition. It’s easy to let today’s fast-paced world overshadow moments that deserve recognition. A formal reward system tied to your kids’ grades at school will help to ensure their efforts are not overlooked.

All that being said, just to check myself, I asked my 13-year-old daughter, Michaela, for her thoughts on cashing in at report-card time. “Dad,” she said, “I don’t do good in school for money, I want to be proud of myself — but money is a nice bonus!”

I didn’t correct her grammar, but I thought, “bingo.”
— J.J. Montanaro, CERTIFIED FINANCIAL PLANNER™ practitioner with USAA

Cons

Good schoolwork falls under “expected” behavior for me. I insist that my children give their absolute best effort. Rewarding the grade sends the message that only the result is important.

To me, a B when you’ve done your best is better than an A earned by sailing through. What I have done, on occasion, is rewarded a particularly great accomplishment in school. Done sporadically and as a surprise, I think that can be quite effective. But handing out an Andrew Jackson for every A is not something I advocate.

I also don’t believe in paying kids for chores they should do as part of the family, such as cleaning their rooms, making their beds and helping clear the table.

Of course, I am all about teaching kids financial responsibility. I think you do that via allowance, given on time, every time. But good behavior or good grades are not prerequisites to receive that allowance.

In my house, good behavior is expected and bad behavior is not tolerated. Rewarding things like common courtesy sets a dangerous precedent for young, impressionable minds.

I think it’s OK — terrific, actually — to pay your kids for things you pay someone else to do: walking the dog and even baby-sitting. Instead of going through the car wash, toss your kids a sponge and promise to pay them as much as you’d pay the pros.

They’ll have extra money. And you’ll have taught them there’s a difference between expected tasks and extra tasks.
— Jean Chatzky, financial writer and motivational speaker

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