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Simple Penny Motivation

I wanted to share with you something we have been doing this school year that balances motivation and discipline and ideally hits both in a positive way.


Even my 4 year old is excited by money… must be in his genes 🙂  Before I tell you what we do I wanted to let you know what we believe about kids and money.

  1. Kids need to have money so they can learn to use it as young as possible (when they can count and not choke on it)
  2. It is important for them to learn how to spend as well as how to donate and save
  3. Kids need to have a way to earn their money (Dave Ramsey idea) and not learn that money is just handed out.  Think job, not welfare.
  4. They need to have money to buy the things they want and not walk through the store asking for things.  Now it isn’t up to me if they get something – if they have the money, they can decide to spend or not.

(here is a picture of our money jar.  We use dimes and pennies mostly)

Based on those ideas we have decided to tie money/allowance into their school work and life at home.  … I understand that school doesn’t pay, but it as close as I can come to figure out how to tie their daily activities into income just like a job.

Here is what we do:

  • Every school day they get 20 cents at the beginning of the day
  • If they do an extra assignment they get paid an additional 10-20 cents
  • If I have to ask them to do something twice (like stop yelling, talking during rest/reading time, jumping on the bed, running through the house naked…. ) they lose a penny.
  • At the end of the week they can count their money and take out full dollars.  (extra money is left in the cup for next week).  Of the full dollars 20 cents is donated or ‘given to Jesus’ in a way that they choose and 20 cents is put in savings.

This has worked really great so far.  Both my kids will jump into additional assignments easier (not frequently, but easier).  My daughter has hit chapters in math that have been easy for her and done 5 or 6 assignments in an afternoon to rake in some big bucks.  My son has really jumped on the ‘not loosing’ pennies.  He runs around saying things like “I lost no pennies today mommy”, or “Guess what daddy, ONLY lost 1 penny today”.

I was reading earlier this summer about how our human nature and motivation works better with the fear of loosing than the reward of getting.  For example, weight loss pools where everyone puts in money and the winner walks away from all of it, are more successful because people are working to ‘not loose’ the money they have put up.  It is a silly bit of being people I guess.

At first, I was afraid it would be a bit like negative reinforcement by taking money away when they weren’t obeying.  The problem is that as parents we are much quicker to notice and correct the negative behavior than we are to notice the good.  Sad but true, I do praise my kids for doing a good job, but it is harder for me to remember.  This system seems to work well rewarding them with their money every day in an expectation of great things for the day.

Another option I have read about that is similar is paying kids a specific amount and then letting them ‘spend’ their money on TV or computer time.

Do you have other ways of motivating or ‘creative correction’?  This is a HUGE parenting struggle and key to healthy kids and healthy relationships.  It has the added problem of every kid being different 🙂

Come back next Friday for a photo essay of our FFFT (Final Fall Field Trip)!

Linked up to the Blogging Bee.  Interested in finding more ways to get the word on on my blog.  Let me know if you have any suggestions.


  1. Jenny in NC Jenny in NC


    I have two daughters who are now 15 and 18. Since they were old enough to work (starting with babysitting, then paid employment) they have been earning their own money. They buy their own clothes, entertainment, and now for the oldest, college education.

    I think this has really taught my kids responsibility.

    One thing to remember when you do something like this, is that it is THEIR money. (You touched on this concept.) I let my kids buy the clothes they want, and “blow” their money, even if I think it is a bad idea. My oldest daughter is choosing her own classes and major in college–after all, she is paying for it. It is her decision.

    My parents went on a trip with our family once when the kids were younger. My dad gave each daughter $20 to spend, and then spent the whole trip overseeing their spending. My youngest daughter spent $4.50 on a fancy cup of hot chocolate and my dad about had a coronary. I gently told him to not worry about it–she was completely enjoying that cup of hot chocolate and if she ran out of money, maybe she would learn to be a bargain shopper next time around!

    • Thanks so much for your comment. I do struggle with the ‘their money’ part. I do try and ‘help’ them spend it now and struggle with whether it is helping or not. I think you are probably right… they are just still so little. I try and figure out if it is a responsibility to give them slowly as they grow. I certainly don’t spend it for them or tell them what to spend it on, but I help them come up with ‘idea’s’ on how to spend it. Really, the first kid is such an experiment, always guessing… I will probaly have it figured out better for my second 🙂

      Money definatly teaches responcibility and maturity. I love the fact that your daughter is handling her own college. She will go far in the world!

  2. Kari Kari

    Good post Lorilee. I would like to do something like this in the future. My kids just don’t have enough concept of “how much” money they have or how much something costs. Therefore…not much motivation to earn money yet. I’m glad it’s worked out well for you!

  3. great idea! we may have to start doing this. although i’m not sure how well they would handle losing money for running through the house naked, lol. 😉 clothes are pretty much optional around here. 😉

    • yeah, you can make it fit your family 😉

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