Proposal Day October 1, 2008
Posted by Tracy Gullett in Earning, Responsibility.3 comments
Well, it’s Proposal Day. Today is the day that I’m supposed to have proposals on my desk from our daughters, aged 5 and 9. On the way to school this morning, G (9) was unsure of what she was going to propose, but she said she does want jobs. Why? “So I can earn some more money.” It wasn’t an enthusiastic answer, but it was a positive answer.
M (5), on the other hand, has known what she wants her jobs to be since the time she was fired. We may actually have to negotiate her down to some more manageable occupations, though, because her preliminary list contained things like “clean the entire house.” Admittedly, she could probably clean the entire house just as well as I could… but the quality of my work in that area wouldn’t be worth 25 cents per day either. 
Assuming we can get new jobs negotiated, each kid will have one week to use as a trial period. They’ll have checklists next week and will be expected to complete them every day, but they won’t be paid for it. If they do an acceptable job on their checklists for that week, then we’ll re-hire them for the following week.
I hope the girls are actually learning real-world lessons out of this. I’m not certain that it’s all sinking in, but I think some of it is. Regardless, they are both excellent kids who tend not to whine, complain, beg, fight, or blame. They’re doing a great job of being great kids, and that’s what allows us to work on programs like this checklist system to help them achieve goals beyond the basics.
And if they fail to do well at their new jobs… I’ll fire them again. 
FIRED! September 20, 2008
Posted by Tracy Gullett in Earning, Responsibility.3 comments
Well, that’s it. The kids are fired.
As of today, G has emptied the dishwasher once and cleaned out Speedy’s litter box twice. Needless to say, Speedy is not happy and neither am I. G has also been neglecting her guitar, the lessons for which we are paying. Her new Nintendo DS seems to be taking up every spare moment, at the expense of her actual responsibilities. That’s something I thought would happen, and I couldn’t resist giving her an “I told you so” talk about it.
M has checked off “Garbage” every day this week. The problem is that she hasn’t done the job every day. A technicality, I know, but I can’t let it go. She has been telling her mother that she doesn’t care whether she gets to earn money or not. So now we’re letting her not.
We have informed both girls that they will not be paid for what they did – which isn’t much – this week. They are also unemployed for at least two weeks. If they come back to us with acceptable proposals, we’ll begin negotiations again. They each need to bring us a list of jobs they are willing to do and the amount they would charge for each. G (age 9) has said that she would like to keep the same jobs and just put more effort into getting them done. M (age 5) has already created a list of jobs, including “Clean the entire house”, “Dust everything”, “Brush Speedy’s hair”, and “Clean mirrors”. We’ll have to help her refine the list a bit to make it manageable for someone her age. We also need to discuss her rate of pay, as she initially proposed being paid $10 to brush the cat. I think I’d rather give the cat a cardboard box and let him take care of the brushing himself.
Including this week, they’ll each have at least three weeks of lost revenue. I’m not sure what impact that will actually have with them, but I’m interested to see whether there’s an increase in motivation the next time they find that “gotta have it” item and don’t have the money to buy it.
I’ve Threatened to Fire My Kids September 17, 2008
Posted by Tracy Gullett in Earning, Responsibility.3 comments
Our kids seem to have lost interest in their jobs checklists. With school in session and other activities going on, the check marks have been getting recorded less and less frequently. G has her Nintendo DS with a little bit of money left and no big spending goals on the horizon, so her motivation has taken a downturn. Suddenly, laundry is too hard or too inconvenient to do, the dishwasher can stay filled, and the cat is apparently expected to fend for himself most days (poor little guy).
M has also slacked off even more than usual lately. The week before last, she earned a dismal $1.25 by completing 5 of her 21 tasks. Last week, I believe there were 6 check marks. Neither of the girls has been paid for last week, however, because I was out of town over the weekend, and no one has asked for their money. We’ll see how long it takes for them to realize they’re missing their money.
After seeing that both checklists for this week are still blank, I told the girls last night that they would be fired from their jobs and lose their source of income if their performance did not improve. The threat had no impact, though. As we left for school this morning, I discovered that poor little Speedy Cat has been left to fend for himself once again. 
This Kid Won’t Give Up! September 3, 2008
Posted by Tracy Gullett in Goals, Responsibility, Saving, Spending.add a comment
G just won’t give up on her Nintendo DS goal. We haven’t tried to talk her out of it much lately. We have mentioned to her that we don’t think it’s necessary, that we don’t believe it’s worth the money, and that we think she could spend her money more wisely. But, as I’ve said before, it’s her money. She’s worked for it, she’s earned it, and she can spend it however she wants (with our oversight, of course. No machetes or penny stocks.).
Today, G brought home two Scholastic book order forms in her school folder. In the past, she has always managed to find several things she wanted to buy through the book order. She has bought a door alarm for her bedroom door, a pair of spy glasses, and has actually picked out some books as well. I don’t have any problem with these book orders. I think they’re a neat deal. I do, however, prefer the books over the toys that are offered.
As I opened her folder today and pulled out the book orders, though, she immediately told me, “I don’t want to buy anything out of those because I want to get a Nintendo DS.” She just won’t let go of that goal! She has been saving her “spending” money for what seems like a very long time with this goal in mind. After working, saving, and waiting this long, she doesn’t want to do anything to slow down her progress.
Something tells me that once she finally buys that game system – and I’m sure now that she will – that we’ll never find it in the bottom of the toy box with those other, cheaper things that she “really wanted” from her book orders in the past.
Prediction Incorrect! August 31, 2008
Posted by Tracy Gullett in Earning, Responsibility, Saving.add a comment
We had pay day afterall. The girls wanted to go outside to play with their friends, and their mom asked whether they’d done their jobs yet. Speedy Cat was apparently taken care of shortly after lunch. I asked G whether she had checked that off her checklist.
“No.”
“Why not?”
“Because you haven’t printed our new checklists for this week.”
“Why not?”
“Because we haven’t done pay day!” (and the light bulb came on).
So, we took care of pay day for last week. G earned $6.25 by taking care of the cat every day, emptying the dishwasher five times, and doing half of a load of laundry. M earned $3.25 by collecting the garbage every day, cleaning the kitchen table four times, and helping to wash dishes twice. This week has been an improvement, but as I mentioned earlier, that was mainly due to prodding by my wife and me.
G and I figured out how close she is to being able to buy a Nintendo DS with her spending money. If she earns the maximum of $10 per week from her checklist jobs, it will take her another 12 weeks to earn the remaining $48 she needs to buy the console and one game (She puts roughly 40% of her earnings into her Spending envelope). That seemed like a long time to wait, but I reminded her that her income is not limited. Her checklist pay is limited to $10 per week, but she can earn as much as she wants by negotiating a deal with a customer (me, my wife, neighbors, etc.).
The wheels began to turn, but I’ll be interested to hear what ideas, if any, she comes up with.
I Wonder Whether Today Will Be Pay Day August 31, 2008
Posted by Tracy Gullett in Earning, Responsibility.add a comment
Sundays are normally pay day at our house. The girls each turn in their checklists for the prior week, we count up the completed jobs, and I pay them out of our Kid Commission envelope. This past week being their first week back to school, I’ve had to repeatedly remind both of them to do their jobs when they are home. It’s made a difference in one sense – their checklists are more complete than in the past few weeks. There are still many more blank boxes though, which is disappointing to me and should be to them as well.
I decided today that I am not going to remind them about pay day. We’ll see how much it actually means for them. 9-year-old G, who is saving for that Nintendo DS, went through the Best Buy ad in the paper this morning, hoping to see a reduced price. Nope. They didn’t even advertise them this week. Thinking about her goal apparently didn’t motivate her to do her jobs for today. Speedy Cat continues to walk around the house in a huff, irritated that it’s nearly 10 AM and his litter box and food dish haven’t been freshened since yesterday.
We’ll see how this goes today. My prediction: Neither kid will get their jobs done for today – putting them behind for this week already – and pay day will end up being forgotten until tomorrow (at least). I’ve apparently got to work on the motivation factor.
Forget Financial Education. More Government Regulation! August 26, 2008
Posted by Tracy Gullett in Education, Responsibility.add a comment
CNNMoney.com posted a story today containing a Q&A with an associate professor from Loyola Law School. Lauren Willis suggests, among other things, that teaching basics of personal finance – like budgeting – is a “waste”. According to her, “Financial literacy classes give people the illusion that they can successfully manage their finances. So rather than seek help, they end up making worse decisions.” Apparently, she thinks there’s no way that ordinary people are intelligent enough to learn how to handle their money. If they do believe they can manage their own finances, it’s only an “illusion.”
Her suggestion?
Willis would like to have politicians regulate what types of financial products advisors offer to their clients. She wants advisors to be required to offer a “default product that is safe.” Okay, let’s see congress define the parameters around that!
This kind of thinking is totally infuriating. We don’t need the government to force anything on us, whether it’s a certain type of financial education or the types of financial products available to us. But a basic financial education is incredibly important, and should not be dismissed as hopeless. If we don’t understand the fundamental principles of personal finance, we have no ability to make the decisions that will allow us to earn, save, and prosper over time.
Discipline with Gift Cards August 24, 2008
Posted by Tracy Gullett in Responsibility, Spending, Sports & Hobbies.add a comment
G didn’t have a birthday party this summer, so before school starts next week, her mom helped plan an afternoon outing with a few of her friends to play mini-golf and have some pizza. Even though we tried to make it clear that G didn’t need any gifts, a couple of the girls figured this was her birthday celebration and brought her some nice presents anyway.
One gift was a $15 gift certificate to a sporting goods store. G is a bit of a tomboy, in that she absolutely refuses to wear dresses, she wants to be a race car driver, and her main savings goal is to buy a Chevy Avalanche when she turns 16. With that in mind, a sporting goods gift certificate is a pretty thoughtful gift for our 9-year-old girl.
We went shopping tonight to give G a chance to spend her gift card. She decided not to take her spending money along, since she has been working so hard to accumulate it for that Nintendo DS (I still haven’t been able to talk her out of it). She is planning to sign up for volleyball this Fall, so she wanted to use the gift card to buy a nice, new volleyball. When we looked through the store, however, the least expensive ball they had was priced at $19.99. Had she brought her spending money with her, we would have had no problem with her adding five or six bucks of her own money to the gift card so she could buy the ball. Since she didn’t bring her cash – a wise move to keep her from spending more than she intended – what do you think she did?
Nope – wrong-o!
She didn’t even ask us. I don’t think it even occurred to her. She’s gotten used to the way things work in our family. Mom and Dad cover necessities and the occasional treat, and things the kids want, they buy with money they earn. I can’t say this happens every time. Once in a while, they want something so bad that they have to at least ask the question. But “no” means “no” and we very seldom hear any begging.
So, the volleyball gets put off to a later time. We know they’re sold for a lower price at other stores. And besides, Mom and Dad might spring for a new volleyball eventually. We haven’t even been asked yet. It was her idea to buy it herself.
Surveying the store, G found a shirt that she liked pretty well and could afford to buy with the card. But then she found something that she was actually excited about buying – and could afford to buy with the card. She decided to go with some accessories for her Crocs sandals. She picked out one package at $9.99 and one at $2.49 and had to stop at that point because if she added another one, the sales tax would put her over the $15 limit. As I turned to my wife to ask whether she thought we should cover the tax so she could get another package (I struggle with my own discipline at times. Okay, all the time.), G skipped off toward the checkout register, happy as could be and not concerned that she wasn’t getting her full $15 worth.
Setting ground rules, applying them consistently, and talking through the reasons behind them with kids makes it possible for the kids to learn self-discipline so that parents don’t have to apply discipline quite so often. Rather than returning home with parents irritated and kid disappointed, we all came home feeling like we had a fun family outing.
Raising Funds for Sports and Hobbies August 20, 2008
Posted by Tracy Gullett in Responsibility, Sports & Hobbies.add a comment
There is some great advice for hobbyists over at Get Rich Slowly today. It got me thinking about the hobbies and extra-curricular activities kids – particularly tweens and teens – get involved with and how expensive they can be. Whether competitive sports like gymnastics, hockey and go-kart racing, or hobbies such as R/C cars, model airplanes and rockets, when we find something our children really seem to enjoy, we want to do all we can to feed their enthusiasm.
Now, I’m all for parents footing the bill for the entry-level sports. When single-digit-aged kids are trying different sports, musical instruments, and other activities to see what they might like, we should try to provide that opportunity. What kid is going to get intense about earning money to play a sport they might not know anything about?
We may be doing a disservice to our older kids, however, if we don’t involve them in the financial aspect of a more advanced or competitive hobby or sport. These activities offer an opportunity to teach our kids methods they can use as adults to finance pursuits about which they are passionate, such as the photography example in the GRS article. We don’t need to reinforce a sense of entitlement by paying their way forever. This is a great opportunity for your kids to develop their interpersonal communication, presentation, and persuasion skills.
Kids don’t have to wait for someone else to come up with a fundraising campaign and they certainly don’t need to go from door-to-door begging people to help them out. Turn their entrepreneurial side loose and help them create a funding strategy. Of course, if they are representing an organization like a sports team or school, they should always present their ideas for approval prior to implementing them.
Here are a few fundraising ideas. If you have others, leave a comment or send me an e-mail!
Work for It
Find jobs to do within your household or in your neighborhood. Offer to clear the weeds out of the neighbors’ landscaping (be sure to have the neighbors define “weeds” before starting). Cut grass, wash windows, or clean out garages. Seasonal employment or extra hours if they already have a job are some more traditional ways to earn some extra cash.
Sell a Quality Product
The girls’ volleyball team in our school district just came by last week selling discount cards for local businesses. We already patronize these businesses, and the cards were of real value to us. Make it something of value, though. Don’t come to my door selling magazines I don’t want for a higher price than I would pay through a direct subscription. In the case of a craft hobby, some of the products created can be sold to raise money as well.
Community Sponsorship
Many local businesses want to support local youth groups and individuals. It helps them promote their involvement in the community and makes their customers feel better about doing business with them. A screenprinting shop, for example, could provide some or all uniforms for your group – with their logo placed prominently. In exchange for their sponsorship, though, they expect quality representation. Those uniforms should be neat and clean at the start of each event. Also, kids should only propose sponsorship arrangements with businesses and organizations that they and their parents believe in and would recommend even if the businesses weren’t providing support.
Product Promotion/Advertising
Whereas sponsorship tends to target other competitors and their families that attend local events, some higher-profile events that attract larger crowds can attract more traditional advertisers. If you’re involved in racing, a local body shop may want you to display a banner in your pit area promoting their painting and lettering services. This type of cash advertising can apply to any spectator-driven event.
Save Money – Hire Your Kid! August 7, 2008
Posted by Tracy Gullett in Earning, Education, Responsibility.add a comment
Lots of people are constantly looking for ways to cut back on their spending. There seems to be a wave of debt reduction and frugality working its way across American society, perhaps partially – but not largely – due to the recent downturn in the credit market and the rapidly increasing cost of energy. This is a good thing. When people are looking internally to see what they can do within their own household to increase income and decrease spending, it is an encouraging sign that we may be moving back toward a society of self-reliance and rugged individualism. Well, a guy can dream, right?
My favorite method of cutting spending, since I author a blog about raising financially fit kids, is to hire our own kids for jobs around the house. There are so many benefits to doing this that I’m sure I’ll have to break it up into several posts.
Primarily, having our kids earn money by providing services to the family household helps them build the skills they’ll need to achieve and maintain financial freedom after they’ve left the nest. Negotiation, accountability, and even project management skills can be acquired and become second-nature to our kids as they progress toward adulthood. Plus, more stuff would presumably get done around the house! Putting the kids in charge of some jobs like washing dishes, vacuuming the carpet, or doing the laundry means that the parents will have a bit more time to devote to other tasks that may be neglected otherwise.
While doing all this character building and productivity boosting, we parents can actually save money by hiring our kids! How can paying our kids save us money? Well, if our kids aren’t earning their own income and we don’t want to deprive them of a few luxuries in life, who pays for those luxuries? The parents do, of course. We may be laying out $30 this month for a shirt that they can’t live without, and $50 next month for that new PlayStation game they’ve seen advertised a hundred times and simply must have. This kind of sporadic spending typically results in significantly more money being spent over time than a parent might realize. Sure, you could have a category in your own household budget for these items and turn down the kids’ requests if the money isn’t there, but why not put the decision-making on them and avoid being the bad guy in the process?
Since we began the checklist and envelope system with our kids, we have mostly stopped buying the “wants”, and they have mostly stopped asking for them. My wife and I added a line item to our household budget called “Kid Commission” where we set aside a bi-weekly $20 for our 9-year-old and $10 for our 5-year-old. This is the maximum amount they can earn by doing their checklist jobs (G earns 50 cents for each completed job, and M earns a quarter for each). Every two weeks, I withdraw $30 from the bank and put it into a commission envelope. At the end of each week when we have Pay Day, I use the cash from the envelope to pay them.
After several weeks, I noticed something interesting. The girls hadn’t been earning their maximum potential, and the Kid Commission envelope still had $40 in it after I had paid the girls for that week. Then I realized I hadn’t done the bi-weekly deposit into the envelope either, so there was another $30 still sitting in the budget (i.e. in the bank). That’s a total of $70 (I did the math in my head) that most likely would have been spent if we weren’t paying our kids based on performance or were just buying them stuff as they asked for it.
Granted, 70 bucks over the course of a couple of months might not be a huge fortune, but as long as the Kid Commission envelope remains funded well enough to handle Pay Day, the $15/week that normally gets added to the commission budget will be redirected to our family emergency fund, which we’re building up to help us weather some career shifts that may be on the horizon.
Now, would I rather have the girls both earn their full commission every week? Absolutely! But that’s totally up to them, and I believe they are learning some great lessons through the pay-for-performance system we’ve put in place. For now, the steady budgeting and results-based pay is allowing more of our money to stay in the bank and multiply!
