My husband and I enjoy the occasional spoiling of our niece and nephew, especially since we do not yet have kids of our own. We give them Christmas and Birthday presents, take them out on little adventures when we visit my family each year, and always allow them to pick out a new book at a bookstore. Even better than occasionally spoiling them, we feel that we can be a great influence by showing them lives different from their own, talking to them about their interests and possible careers, instilling in them a love of books, and trying to be good examples by always eating mouthfuls of vegetables when we all sit down to dinner.
So when the opportunity to teach one of the greatest lessons of all to my niece came up a few months ago—working for money and saving it for a purpose —we were both very excited. All of my family will be taking a cruise to Alaska in 2012, and my 10-year old niece has made it known that she would like to have her own money to spend while on vacation. This sounds completely reasonable; after all, she will be on the verge of teenage-hood by then, when the hunger for independence will be running through her veins. At the same time, her mother is extremely busy with her children, working full-time, and trying to take care of her husband who has degenerative disc disorder. In other words, she could use a break, and unfortunately I live about 1,000 miles away.
Taking all of this into consideration, Paul and I decided to employ Rhianna for the summer as a helper around my sister’s household . Here is how this will work, as well as the benefits and lessons we hope to achieve by doing this:
List of Chores
Rhianna, her mother and I discussed a list of chores that Rhianna can choose to do each week. Our original list included things such as keeping her room clean and cleaning up after herself from dinner, but we decided that it would set a bad precedent to pay a child money for chores that she should be doing anyway in order to learn personal responsibility and to contribute to the household. Therefore, we only kept chores that were above and beyond the norm, such as the following: helping her little brother clean his room, wiping off the table after dinner, sweeping the floors, and watering her mother’s flowers and the vegetable garden.
Each of these chores has been given a monetary value (see below) so that it is very clear for Rhianna to see the amount of money or commission  that she has the potential to earn. In this way, we hope to stir up some ambition on her part to earn money towards her savings goal, particularly after she receives her first paycheck.
- Helping her brother clean his room: $2 each time
- Wiping off the table after dinner: $1 each time
- Sweeping the floors: $2 each time
- Watering the gardens: $2 each time
Her potential to earn each week is approximately $25.
Tracking and Oversight
Rhianna will be in charge of writing down each chore that she performs, as well as the date when she did it. Her mother will provide the oversight by inspecting the work and putting a check-minus, check, or check-plus beside it. Then we will pay Rhianna accordingly, with the bulleted amounts above being for average work. If she does not perform well, then perhaps we will give her $0.50 below the above amount for her work, and if she performs above and beyond what the chore calls for, we will give her a bonus of $0.50 or so, depending on how far she goes. The goal is to teach her about job performance, and to think above and beyond what is being asked of her if she wants to earn more money.
Getting Paid and Managing Money
We will pay Rhianna every week in order to really motivate her and to keep her interest (kids have a short attention span!). My sister has opened a savings account for Rhianna  so that she can deposit her wages there. In order to teach her about the importance of saving up for big goals, as well as saving a percentage of each of her paychecks for a future date, we have suggested a percentage of each paycheck to go into this savings account. Since she is so young, 85% will go into this savings account, and 15% will be given to Rhianna for family outings and such.
This system should work great for this summer, but I was thinking that in the future we will offer to match the amount of money that Rhianna puts into savings in order to help her reach her goal; right now she has to put as much savings away as her mother wants her to, and she probably thinks that 15% of $25 is a lot of money. But perhaps next summer or the following she will be unimpressed with how slow her savings is growing, and will think that it is better for her to spend that money rather than put it away. By matching her savings, it will give her an incentive to keep saving, even though the goal seems so unrealistic (sort of like retirement accounts and company matches).
Have you ever tried this with your child, niece, nephew, or otherwise? How were the results?