—>Kids & Money- Part 2
Hey there fellow parents! Last week, I posted about Kids & Money and found that many of my readers were very interested in learning more, so here you go!
Today, we’re diving into the intricate world of chore pricing for our beloved 10 to 14-year-olds. As a CPA, I’ve crunched the numbers, balanced the spreadsheets, and survived more negotiations than a UN diplomat. So, buckle up because we’re about to put a price tag on everything from dishwashing to dog walking!
1. Setting the Minimum Wage (Per Chore)
First things first, every job deserves a fair wage. For basic chores like making the bed or feeding the goldfish, start with a competitive base rate. Let’s call it the “Candy Bar Standard” — the equivalent of one candy bar per chore. Adjust upwards for sibling rivalry tax. In my house each chore has a wage attached to it, so they know going in how much it is worth.
2. Negotiating Hazard Pay
Now, let’s talk about those hazardous duties. Taking out the trash? Handling the bathroom scrub-down? Negotiate for hazard pay. You might start with double the standard rate and work up depending on the gross factor. Don’t forget to factor in the emotional distress of finding that science experiment in the fridge!
3. Time Management Bonuses
Time is money, even for kids. Consider a time management bonus if your junior accountant finishes chores ahead of schedule. This encourages efficiency and leaves more time for important activities like Fortnite or Madden (because, let’s be real, those are their priorities). With my 11-year-old identical opposites, one will always get the work done quickly while the other will go as slowly as possible! The “bonus” helps him move a little faster!
4. Special Projects and Freelancing
Sometimes, the little ones will come to you with special requests. Maybe they want to rake leaves for the neighbors or organize a garage sale. These are freelance opportunities! Let them pitch their rates and negotiate the terms (with parental supervision, of course). It’s a great way for them to learn about market dynamics and the art of the deal.
5. Quarterly Performance Reviews
As responsible parents, it’s our duty to conduct quarterly performance reviews. Sit down with your child, review their chore portfolio, and discuss their earnings. This is a prime opportunity to teach them about budgeting, savings, and the harsh realities of inflation (because, yes, candy bars get more expensive every year). Remember never to assume that your kid knows what needs to be done, nor whether they are doing it the way you want it done!
6. The Taxman Cometh
Let’s talk about taxes. I’m a tax accountant; you had to know that I would discuss taxes! Yes, even chore income is subject to parental taxes. This can take the form of “Room and Board Fees” or “Access to Wi-Fi Surcharges.” Explain to your child the concept of taxation (preferably after they’ve received their earnings) and watch as they develop a newfound respect for W-2 forms.
7. The Parent Trap
As you navigate this fun new world, watch out for the Parent Trap! The Parent Trap is when you work very hard to set up the wage per chore and the chore chart, and when your kid wants something, you buy it for them. Would you go to work if money was just handed to you? Of course not! Make sure your kid is paying for those “wants”. For example, my boys can’t live without EA Games. So they split the cost each month! Now, while I am a big fan of having them pay for their wants, I also ensure they know that food, clothes (not $200 Nikes – this is a want not a need) and housing are my responsibility.
In conclusion, pricing chores for kids is a delicate balance of fairness, negotiation skills, and a touch of parental finesse. Use these tips wisely; you will raise financially savvy children who might balance your retirement fund someday. Happy chore pricing, and may the allowance odds be in your favor!