First, it’s paying for grades. Then it’s paying for teeth. Finally, we set some limits! Here are my favorite family finance picks from last week:
I chatted with Chris Taylor last week about the classic parenting debate: should you pay kids for grades? It works for some families — see Ganesh’s story in the article. We tried it for a little while with two of our sons and saw no significant impact, so we dropped it. A study out of Harvard I wrote about last year found that paying for good study behaviors along the way is more effective and lasting than paying for the final outcome. That was the basis for my suggestion near the bottom of Chris’ article:
The bad thing about paying for outcome is that if the semester is going down the tubes, then there’s no motivation anymore. But if you’re paying for a habit like reading regularly or doing homework, then it’s never too late.
Read the full article here.
At first blush, you might think that parents with higher levels of income and education would pay their kids heftier tooth fairy rewards. You’d be very wrong according to VISA survey data just published via an online application and a mobile app.
Alex Madrigal from the The Atlantic writes: “I played a bit with the app, holding age, gender, and location steady while playing with the household income and education level variables. The smaller the amount I put in for household income, the greater the size of the average tooth fairy’s gift. In fact, I was only able to get calculator to output $5 by setting my household income to $20k per year and selecting that my highest level of educational attainment was high school. Grad school degree holders making more than $150,000 per year gave their kids an average of $1 per tooth.”
See the article here.
Beth Kobliner makes some excellent points in this allowance article like: you’ll want to base the allowance amount on what your child is expected to purchase (budget-based allowance vs. age-based), and it’s fine to set limits with “their” money. See Beth’s article here.
We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit our ever growing list of family finance bookmarks here. We’re up to 2,832 now!