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bank-pegs

In our own work with parents, we often survey our audiences as to what they think is their biggest parenting challenge. The number one vote getter is entitlement—higher than quarreling, higher than peer pressure, higher than disrespect or dishonesty or drugs or anything else. Kids who have an entitlement attitude, who think they should have whatever they want, right now, without waiting or working for it—tend to lose motivation, lose gratitude, lose respect, lose all the things their parents want them to gain.

The best way for parents to deal with this widespread problem is to understand that we give our children more by giving them less, and to set up a family economy where they share household responsibilities and have weekly paydays instead of weekly allowance days.

It is amazing what a profound effect some kind of a wooden chest with a big lock on it can have on children when it is explained as a “Family Bank.” Kids are made more confident and competent by responsibility. A strong family institution needs a way to divide and share the work of the household and a way of letting kids earn a small “share” in the family’s income.

Here is an example of one way to set up a Family Economy (Each family should tailor-make its own system but this example will help). This approach works best for kids between seven and twelve. If you can start it during those years it can continue to work into the teens.

Caution: Don’t try to set this up overnight. It will take a lot of discussion and some trial and error. Remember that infrastructures take time to build but then they save time. Here is the implementation sequence:

  1. Do a big chart of all the household work that exists. List everything from doing the breakfast dishes to sweeping the patio. Explain that those who do a share of the work should get a share of the money that comes into a family. While everyone should take care of their own room without pay, there are plenty of “common areas” in the house and yard that need to be taken care of—and daily tasks that someone needs to do, and those who do them should shave in the family income
  2. Tell kids that this approach will allow them to earn more than they could get as an allowance and that with their earnings they can buy their own toys and devices and clothes. Kids in this age range—seven to eleven—are flattered by responsibility. (Note that this system doesn’t require any additional money. Parents are simply taking the funds they spend on children anyway and channeling that money through the kids who “earn it” and make their own purchase decisions—learning economic and motivational lessons through the whole process.)
  3. Set up a pegboard or chart (pegboard is better because it’s more permanent—more impressive as a prop) and explain that there are four things each child can get “credit” for each day: (a) Getting up and being ready for school on time; (b) One “zone” or area of the house or yard (not their own room) that they make sure is clean and in order; (c) Daily homework (and music practice if applicable). And (d) Being ready and in bed by bedtime. Each day they can fill in a “slip” (on their own initiative—without a lot of reminding from you) with a “1,” “2,” “3,” or “4,” depending on how many of they’re four pegs or checkmarks they completed. A parent must “initial” the completed slip to make it official.
  4. The slips go into a slot on the top of the “family bank” and Saturday becomes “pay day” when the bank is opened and each child receives an amount proportionate to the total of his slips. He can take his money in cash or leave it in the family bank. He is given a checkbook (an old or extra book of your checks) with which he can deposit money to the family bank (with a deposit slip) or draw it out (with a check). When he goes shopping with you, he brings his checkbook and writes a check out to you so you, in turn, can pay for what he buys. He keeps track of his balance in his check register.
  5. This “family economy” can be enhanced in a number of ways. A child can have an interest-paying savings account as well as a checking account in the family bank. Parents may want to pay a high interest rate on the condition that the savings are to be used only for college. When a child turns sixteen, real checking and savings accounts are opened for him at a local bank or a discount brokerage and all the money in his family bank account is transferred in. Children might also be encouraged to donate a certain percentage of what they earn to church or charity.

This type of “family economy” has been used by thousands of families, but as a personal testimonial, let us just say that it has been a huge blessing in our family. Kids have learned principles that will serve them well for the rest of their lives.

  • Principles of self-reliance, (I recall nine-year-old Jonah calculating how much he’d have by age sixteen at the 10 percent per quarter interest we paid on his “education only” family bank savings account. I also recall the look of pride on his face as he wrote out a real check for his full freshman year tuition.)
  • Lessons about the dangers of instant gratification (eight-year-old Saydi spending $80.00 of “her own” money on a pair of designer jeans and wanting to “turn them back in” or sell them to someone the next day because she realized she had no money left in her checking account).
  • Lessons about depreciation (Josh wanting to “sell-me-down” rather than hand-me-down the outgrown clothes he’d bought to his little brother who wanted “a good deal”.)
  • Principles of restraint (ten-year-old Talmadge saying he’d decided to ask himself three questions before he bought anything: “Do I want it,” “Do I need it?,” “Can I afford it?”)
  • Lessons about saving (twelve-year-old Shawni observing that “If I put come in savings right when I get it, it’s like I never had it so I don’t miss it.”)

Good as the “money lessons” are, it’s the life lessons that really count…lessons about responsibility, about motivation, about self-reliance, and about doing your share.

Editor’s note: This is the fourth article in a series of 10 where the Eyres are sharing the ten best parenting ideas they have come across during their three decades of writing to and speaking with parents worldwide. Each is coupled with the key parenting challenge that it helps to solve. The ideas are not in any particular order, but each represents a simple, practical “best practice” that can be implemented in any family. Most of them center on a “prop” or physical object that symbolizes the idea and makes it real and memorable.

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