Last night my daughter and I had a conversation about the cost of college.
She’s 9.
I didn’t mean for it to happen. But she was asking for math problems, so I said to her, “Here’s a math problem I just did yesterday: What’s the difference between 55,492 and 21,177?”
Naturally she wanted to know WHY I had done that particular problem. I told her it was because I was comparing what my college cost now to what it cost 20 years ago. After we solved the problem, we guesstimated what the tuition would be in another 10 years.
She turned to me. “Dad, I really want to go to that college, but I don’t think I’m going to be able to afford it.” Then she thought a little more and said, “I’ll put all the money from my allowance into college savings. I don’t need spending money.”
Well, then we did a little figuring on how fast money grows if you put it in the bank. (Not so fast.)
And I told her that one way to make her small savings grow much faster would be to invest the money in starting a little business. We ran a few numbers on a hypothetical window washing business, and she was intrigued.
Naturally, later last night I came across this video on a friend’s blog:
The video is 20 minutes long, but it’s worth watching. First off, it’s part of TEDtalks, which if you’re not familiar with it already is a fantastic series of short lectures available as free videos. Second, he’s got some great points about how we can work with our children to give them the entrepreneurial bug.
There were a couple of moments in the piece where I did start to lose interest. For a few minutes it seems like he’s just making a list of all the entrepreneurial things he did as a kid. But even these are pretty inspiring.
What really got my attention were some of his comments about allowance. He thinks a regular allowance is something that trains children to wait for a paycheck. Instead, he advocates training your children to keep their eyes open for things that need to be done, then coming to you and negotiating a fee for doing them.
Honestly, I loved this idea. I am by and large against the idea of paying kids to do chores (and my thinking was confirmed by some comments in Daniel Pink’s recent book, Drive), but this changes the game completely.
Instead of using payment as a compliance tool (“I know you want money so I’m going to give you money to make you help me around the house.”) you give the kids the central role in the transaction, solving our problems in exchange for money. (Note that he didn’t seem like the kind of person who would ever pay a kid to clean their own room. There are many things we do just because that’s part of being alive, and we don’t get paid for them.)
I also liked the focus on negotiation. My kids negotiate with me all the time, but it’s for more dessert or a later bedtime. I’d like to see them negotiate a fair payment for a task I would be willing to outsource.
Take a look at the video and share your thoughts in the comments!
Here’s the blog post where I found the video: SuperWAHM. Mel is smart and worth following.
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What wonderful advice, Joe! I’d have loved this approach when I was small, I would have cleaned up. Encouraging the entrepreneurial spirit would be a gift in navigating the uncertainties of the current job market. Kind of like that old adage “Give a child a fish and feed him once. Teach a child to fish and he’ll be fed for a lifetime.” Same thing here, teach a child to be an entrepreneur and he’ll be fed for a lifetime.
I kind of had both – a mix of an allowance but also a checklist if I wanted to earn a little extra. It was that checklist that I looked forward to marking up every day. If I had kids, you can be the entrepreneurial bug would be keeping them up at night
Fascinating perspective. I got an allowance and felt I lost many Saturdays of my childhood cleaning and washing. There was no negotiation, which may be why I have difficulty negotiating today. Encouraging that childhood entreprenurial spirit may be one of the best gifts you can give your children. Thanks, Joe.
This is all really interesting, thanks for sharing it with us. Like you, I had some second thoughts about the allowance thing after I read Drive. But I like that approach, the whole mindset it teaches about money. That’s it’s perfectly natural to ask for it, but in a context of what you have to offer first.
Had to LOL Joe – your comment on my post about teaching kids to be entrepreneurs has a comment luv link to your post on teaching kids… That’s like a catch-22 in a good way, but it’s doing my head in to think about it. Thanks for the link-love!
We always had pocket money as a kid, however it was reduced for not doing chores rather than being given opportunities to increase it. That’s not something I would ever do to my own daughter, as it really taught us that if we didn’t want to do a chore then it didn’t matter, you just didnt’ get paid. There was no motivation to do any extra or go looking. It’s an interesting topic, being an entrepreneur, let alone a kid-preneur.
I’ll have to add Drive to my reading list.
@Carole, Yes, the entrepreneurial spirit works even for “non-entrepreneurs.” Where I live is on semi-hard times (like a lot of other places). Some of the low-income folks I know who are still getting by okay are the ones who just keep coming up with new opportunities and angles (like helping people who move away due to economic pressures get more of their rental deposits back, in exchange for part of the money)
@Sherice, I like that sense of kids looking forward to finding extra ways to contribute.
@Marsha, The other part of Drive that applies to your situation is the ideas he has about motivating teams of people. Turns out it’s mostly in the intrinsic pleasure of the task, or in some reframing of the task so that it’s more fun (which is something I remember trying to do with wood-stacking as a kid — trying to turn it into a challenge [how many logs could I carry] or a puzzle [how tightly or loosely could I stack].
@Sonia, the difficultly of asking for money from parents. That’s a big one for a lot of people. Whether as a child or adult, you end up asking for a handout, instead of proposing an exchange of value. For children, it all comes back to your essential business model: making other people’s lives better in exchange for money. And if you want to talk about building self-esteem, this is a good one…
@Mel: Glad you showed up! (Since you’re the reason this post exists…) It’s so tempting as a parent to use those carrot and stick motivators like taking away allowance if chores don’t get done. Or creating peer pressure, or subtle shame. Having read Drive, my focus is on finding ways to talk about that intrinsic motivation with the kids (without boring them).
Re Drive, I was also pleased that he listed Montessori schools as a Type I (that’s an i) educational resource, since I spend a lot of my volunteer time trying to keep one going.
My partner and I haven’t quite figured out a final allowance/earnings plan yet for our kids. I’m leaning toward keeping our (meager) allowance in place, and adding in the entrepreneurial component. The allowance we give them takes a long time to add up to something as exciting as a Lego set. Even a small one. We already do the forced savings plan, though it’s actually in thirds: one third to spend, one third to save, and one third to “good works.” (They can donate it to any charity they want to support — so far the food bank is the big winner.)