Art Carden  

How Can Small Kids Earn a Few Dollars?

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This morning, our six-year-old earned fifty cents. That fifty cents topped of the money he has been earning recently and gave him enough to buy a $17 toy he wants. I couldn't be prouder: when he wants something, he finds a way to earn the money to buy it.

Some of our kids' household responsibilities are non-negotiable. Keep the bedrooms and playroom clean(ish), fix your own breakfast and snacks, help us when we make reasonable requests, etc. The kids still have a lot of opportunities to earn money. Here are a just a few examples of some things our kids do for money:

1. Fix Dad's lunch (usually just avocados and nuts, so nothing difficult).

2. Fix Dad a cup of coffee when he's working at home (we have a Keurig, so this is also pretty easy)

3. Pick up sticks in the yard

4. Shelve my books (they're still working on this as it's not exactly fascinating work)

5. Scan and destroy documents (with the shredder or in the fire pit--this is obviously closely supervised)

6. Reading word lists. We're a little hesitant about this because we want our kids to love reading for its own sake, but it doesn't seem to hurt their reading.

I've had less success with paying for book reviews, though I thought saying "Daddy earns money by reading and writing about books; you can, too" would be a winner. Maybe later.

Fifty cents here and a quarter there adds up quickly, and they're well on their way to mathematical fluency and financial literacy. We're currently exploring the feasibility of opening Roth IRAs for them. If they have $5000 in a Roth at age 10 and then never contribute again, they'll still have over half a million dollars at age 70 with a real return of 8%. I would call that a pretty good start.

What are some other ways kids can earn money?


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CATEGORIES: Family Economics




COMMENTS (16 to date)
ColoComment writes:

Re: Roth IRAs for kids. See discussion re: taxable income at this site:

http://fairmark.com/retirement/roth-accounts/contributions-to-roth-accounts/roth-iras-for-minors/

I established and initially funded Roth IRAs for each of my two children, but it was after each had graduated college & had earned & taxable income. (I would have done it earlier, as they each worked part-time in high school and college, but Roth IRAs hadn't been "invented" yet.) :)

Granted, you lose the Roth IRA's earnings power of those minor-child years, but until and unless IRS clarifies the income situation, I'm not sure I'd proceed.

Joe Teicher writes:

> real return of 8%.

Ha! Good one!

Phil writes:

I'd pay him to clean my bathrooms! Seriously. Too bad that's not legal or socially acceptable.

Ben G writes:

My two wee ones feed the dogs twice a day (4 1/2 year old handles breakfast, 8 year old dinner), earning their grade level (pre-K rounded up) in whole dollars per week. Bonus wages: extra love from the dogs.

David R. Henderson writes:

It depends on age, of course, but when I was about 12, my mother paid me 50 cents (I think--it’s been a long time; this was early 1960s), to defrost and clean the fridge and 25 cents to clean the oven.
Like Joe Teicher, I think your 8% real is way too high. I would be inclined to use 4 or 5.
Also, and I think this is what ColoComment was getting at, the universities screw your kids on any wealth they bring, essentially planning to zero it out over 4 years. So if their net worth is $20K, they plan to have the kid pay $5k out of it every year for 4 years.

dullgeek writes:

My kids range in age from 8 - 16 years old. And one of the things we do is create a chore list. There are certain required chores that each of them are assigned and that they just have to do. Failure to complete said chores will result in certain restrictions on freedom. But there are many more chores in the house than just the required chores. And the surplus of chores are typically handled by my wife and me.

So we have a list that lists all of the chores that we'd be willing to pay to have done and the amount that we'd be willing to pay for it. Examples:

$20 Mow the lawn (only available to the 13 & 16 yo)
$7 Vacuume the house
$10 Wash mom or dad's car

It has morphed into an interesting chore economy within our house in that sometimes one child will simply be lazy, and offer to pay another child to do his required chore. We don't get in the way of this negotiation. Because there's always one child with an excess of money (as a result of a birthday or frugality), and another child with a heightened desire to spend.

The market clearing price for cleaning a bathroom appears to be $5. That's the same price for emptying the dishwasher for a week. Both of those chores are required chores. The bathroom must be done on Saturday morning before any playing gets done. The dishwasher must be emptied whenever it's required throughout the week. This same price for each chore suggests that we got the initial division of labor correct when we assigned one kid a bathroom and another the dishwasher.

Today there was an interesting discussion between the 8yo and the 11yo about how much it would cost the 8yo to get the 11yo to do the dishwasher for the rest of the year. $20 was the amount the 8yo proposed. The 11yo eventually refused realizing he could earn that in 4 weeks, and there are many more than 4 weeks left in the year. Still the 11yo had to consider it. Because it's hard to find one thing that will provide a full $20 in one shot. And I think he realized that doing it for 4 weeks, he'd have to renegotiate every week, with the possibility that the 8yo will refuse on any given week.

Bottom line: our kids buy & sell chores in our house and it's working pretty well.

ColoComment writes:

"I think this is what ColoComment was getting at,"

Not really. I was more just cautioning about establishing Roth IRAs for children who do not have taxable earned income, and that paying children for doing chores does not qualify as taxable earned income. The mills of IRS grind slowly, but they grind exceedingly fine. With penalties and interest ground in.

However, each of my kids did have a "college" account set up somewhere around their jr. high years under UGMA (funded by some GM stock my own dad had gifted me in the 'way back.)

One child transferred from a Colorado state university to Univ. of AZ in his second year & had to pay non-resident tuition from his fund for that first year until he had established AZ residency -- that pretty much wiped out his account. After that he relied on grants and loans. With two changes of major, it took him ~7 years to graduate. He's still paying off his student loans, ~15 years later.

The other child chose Metro State Univ. in Denver for a degree in health & human services, and planned out her schedule so that she graduated in 3 1/2 years (with every spring semester off so she could snowboard), and enough left over to buy herself a Toyota Tacoma pick up after graduation.

Kids! Gotta love them even when they drive you crazy.

AC writes:

8% real return for 60 years? Only Piketty knows how to achieve that.

Mark V Anderson writes:

We never paid our kids to do chores, or for good grades. Somehow both seem abhorrent to me, although I can't figure out why. It always felt to me that doing these things for money meant they weren't important to the kids in their own right.

Maybe it's just something ingrained in me when I was a kid. I am still trying to pry this out of my brain as to why this feels so important to me. I don't moralize at others about this, since I don't understand it myself. But something seems wrong about it.

NZ writes:

@Mark V Anderson:

I agree. I was never paid to do chores or get good grades, and I don't plan on paying my daughter for those things either. (If I give my daughter $5.00 to go pick up something from the store that costs $4.15, maybe I'll let her keep the change as a "tip".) Besides, one of the things I was looking forward to when I had a kid was the eventual free labor.

I think the main reason is that you should get good grades because good grades are the evidence of what you're supposed to be doing in school in the first place. (It would be especially absurd if the child was going to a private school--so the parent who pays gets it on both ends!)

With chores, you're part of a family, and helping out is simply one of the things you do as part of a family. It shouldn't even need stating that you also do chores because you're getting room, board, and a host of other benefits, basically unconditionally.

I'm sure yours are perfect Boy Scouts, of course, but kids who do earn money tend to be even poorer savers and purchase-decision-makers than adults (most of whom are awful at saving and making good purchases too). Even as late as high school, I squandered what little money I earned on junk food, drugs, and a death-trap Chevy Celebrity with faulty brake lines. And it wasn't because my mom had failed to teach me better either; it's because I was young, inexperienced, and like just about all youths, the chemicals in my brain hadn't leveled out smoothly yet.

When I'm old and decrepit, will I need to pay my kids to come help me out and spend time with me? Only if I train them to think so.

NZ writes:

PS. By the way, I'm not at all against kids working and earning money. I think that getting a job would be a wonderful alternative to finishing high school, or even junior high school, for many (most?) kids, and I'd rather pay a neighbor's kid to mow my lawn than an adult stranger.

But bringing money into transactions between child and adult family members is, in my view, a bad idea.

Mr. Econotarian writes:

As a high school freshman, I wrote articles for computer magazines that brought in about $300 or so each. It is crazy that I can find some of the computer programs I published on the Internet now and play them on Atari 800 simulators almost 30 years later!

A friend of mine around the same age wrote a book on Atari home computers and made a few thousand (his father was a public university math professor who profited heavily from the college Calculus book he wrote that happened to be required for his huge classes, so he "knew the business").

Today a kid could write an iPhone app and make tens of thousands of dollars!

Tom West writes:

destroy documents (with the shredder or in the fire pit)

I'm confused. How much do the kids have to pay to be allowed to shred or burn stuff?

NZ writes:

Where do people get this notion that more than a fraction of a percentage of kids are Ender Wiggins?

Mr. Econotarian, I think it's fantastic that at age 15 you were able to write well enough and with enough expertise that you could pen articles fetching you $300 apiece--not adjusted for inflation!

But you have to recognize that your ability was so atypical that the anecdote is basically irrelevant. I thought Art Carden was looking for a discussion about what parents generally should do with regards to their kids earning money--which means confronting the fact that most kids are relatively lazy, irrational, ignorant, and short-sighted.

Floccina writes:

I found with my children that starting with task that take a very small amount of time (1 minute - say get me that tool from x it looks like y) and working up worked well.

Rob writes:
Some of our kids' household responsibilities are non-negotiable.
...
There are certain required chores that each of them are assigned and that they just have to do. Failure to complete said chores will result in certain restrictions on freedom.
...
Besides, one of the things I was looking forward to when I had a kid was the eventual free labor.

Translation: Children are slaves owned by their parents. All humans are born directly into slavery without an exit option for almost 2 decades.

I know you don't quite mean it that way, and parents also do much for their children and typically love them. Nonetheless, I find this much more creepy and immoral than paying kids for voluntary chores.

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