The 25 10 Cent Child Labor Experiment

Note: Increasing pay to $.25 so he has a bigger stash when he actually gets to spend it. Thanks to reader Scott for the suggestion.

Our four-year-old son loves to help. Whether he’s fetching a fresh diaper for his little sister, making coffee with the Keurig,or mixing ingredients in a baking bowl, he has this electric desire to help Mom and Dad.

I know this won’t last forever. Speaking to friends with older kids, this enthusiasm to help out will surely wane as he gets older. But we’re enjoying it now, and hoping it leads to a strong work ethic as he approaches kindergarten.

Not long ago, his desire to help out would make my job more difficult. When he “helped” rake leaves last Fall, he mostly destroyed my piles and only wanted to jump on the bags to squish the leaves down.

Only recently his willingness to help has actually helped get the jobs done.

We’re just scratching the surface of many years of chores and allowances now that our oldest is finally ready. Another adventure in parenting.

Find A Penny, Pick It Up

A few Sunday’s ago, our boy found a penny on Mrs. RBD’s nightstand and asked if he could put it in his piggy bank. We said yes but then explained that money isn’t free, and in the future he’ll need to earn the penny, not just take it from Mom.

His ears perked up.

I told him if he helped to collect and take out the garbage that evening, I’d pay him 10 WHOLE CENTS and he could put it in his piggy bank. He started jumping up and down with excitement!

Pre-school hasn’t started math yet. Granny gave him $20 once to buy a toy and we took him to spend it. He understands that Dad works so we can “buy milk”, and he understands that money is given at the store in exchange for things.

But otherwise, he has no idea what money is worth. A dime is great, ten pennies is even better!

We’ve done a few simple math problems with fingers. He kind of gets it and he’s definitely curious. In the coming years, he’ll make great strides in math and reading skills. But right now, his skills are nil.

All this has got me thinking.

He’s a fresh canvas. Here’s this human being who I’m responsible for teaching about life. Being the nerd that I am, teaching money skills to my three kids will be an important part of parenting and their upbringing.

So why not make a little experiment out of this garbage job?

Garbage Man

That Sunday evening before dinner, we walked around to every room in the house to collect the trash. Mom and Dad’s room, the bathrooms, his sisters’ rooms, the office etc. He carefully lifted and dumped each trash can into a kitchen-sized garbage bag held by me. He took great pride in his work.

Outside, we put the bag into the bigger trash can. Then we rolled the trash and smaller recycling can (his job) to the curb, side by side.

Once the job was done, payday.

In the office, I dumped some change on the floor and asked if he wanted a dime or pennies. He obviously took the pennies since there’s more of them.

Then I told him he could help me EVERY WEEK and earn 10 cents every time. He was so happy. All week now he asks about helping with trash.

But how long will this last? When he learns what 10 cents is really worth, will he still want to help? When will I need to raise the pay?  What about an allowance?

The Child Labor Experiment

Collecting the trash and taking it to the curb takes about 10 minutes each Sunday. At 10 cents per 10 minutes, I’m paying him $0.60 cents per hour. You and I know that’s lousy, but he acts like it’s a fortune!

I should note that when I offer him money to help, my tone of voice suggests the cash amount is bigger than it really is. Funny how your tone of voice can excite a toddler. 10 cents to him sounds like the lottery.

So I’ve decided to make an experiment out of it to answer a few questions:

  • At what age will my son really understand money?
  • When does a toddler’s desire to be a good helper go away?
  • How will pay effect my son’s willingness to help?
  • When will he realize that he’s being drastically underpaid and ask for more?
  • Should I even pay him to do work that is expected of him?

It will work like this. Every week for the foreseeable future, my son will certainly want to help with trash collection. Each time he does, I’ll pay him 10 cents. We’ll do this every Sunday for as long as it lasts.

I’ll pay him out of a giant jar full of coins. So when he sees where the money is coming from, he know’s there a lot more of it. He’ll also have a choice of denomination. One dime, two nickels or ten pennies.

Here’s a few ground rules I’ve set:

  • Every week I’ll ask if he wants to help. He’s not required to. If needed, I’ll remind him that he gets a whole 10 cents for his piggy bank. I expect he’ll always say yes unless he’s tired and watching TV. But he usually stops what he’s doing to help Dad with a job.
  • The payment remains 10 cents. Tipping 2 additional cents is allowed for exceptional performance or extra effort.
  • If he declines, the bounty increases in 5 cent increments until he accepts. The ceiling is $0.50 for any given week for starters. Amounts may not matter at all.
  • Garbage duty will be the only paid chore for now. Cleaning up toys and other household duties will remain expected without pay.

Current Status of the Experiment

We’re already three weeks into the experiment. Here’s where we stand:

Date Payment Notes
April 24th $0.10  
May 1st $0.12 $0.02 tip for rain
May 8th $0.10 Helped bring in the empty trash can on Monday.
Expected pay (not part of the deal).
May 15th $0.25 Increased pay on reader suggestion. Also helped
make a delivery to a neighbor. $.25 will give him
a more sizable stash to spend, save, give.
 

So far he’s made $0.32 for his efforts. His pleasure comes mostly from helping. But he is certainly excited to get the money, and even more so to physically put it in his bank. This past week he had a minor meltdown because I almost tried to help his sister brush her teeth before we put his coin in the bank.

He also expected more money for helping to bring in the empty can on Monday. I told him that wasn’t part of the deal and he relented. But I may institute a $.05 payment for that job. Seems fair.

The piggy bank is small. For the coming Christmas, I’m planning to buy him a large Coca-Cola Bottle Bank.One of my Aunts bought me this same exact bank when I was nine or ten. For a few years, it was my most prized possession. He’s ready for it.

The Bigger Picture of Chores and Allowance

We are not yet strict about helping around the house. Our son likes to help with certain things. This excludes cleaning up, unfortunately. But we certainly want to institute weekly chores when the kids get a little older. With chores and aging come the idea of an allowance.

When I had satellite radio and listened to the Dave Ramsey show years ago, one of my favorite quotes of his (aside from “you gotta sell the truck), is this:

Work get paid. Don’t work, don’t get paid. – Dave Ramsey

That’s his standard response when addressing allowances.

We’d like to think our kids will do chores out of a sense of family responsibility. But in reality, there will need to be some kind of motivating factor.

Loss of allowance seems like a solid one to me. But that doesn’t mean anything until they understand what money is and what it does.

So, for now, I’ll do my little experiment and see where it goes. We’ll need to visit the toy store to spend some of it. When he sees what $0.32 will buy him, maybe garbage time won’t be so exciting.

Do you give your kids an allowance? Is the allowance related to chores? What if they skip the chores?

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12 Responses to The 25 10 Cent Child Labor Experiment

  1. Dividend Growth Investor May 11, 2016 at 9:43 am #

    This is a very interesting experiment. Teaching kids about the value of money and personal finance is important, so that they grow up to be responsible adults who do not make a lot of money mistakes,

    the richest families in the world have tried to teach their youngsters about money management from an early age. For example, I read the following story recently:

    “According to Nelson Rockefeller, the one-time Vice President of the United States, his father John D. Rockefeller Jr. gave each of his five sons an allowance.

    We got 25 cents a week, and had to earn the rest of the money we got. To earn part of that extra money he raised vegetables and rabbits… We always worked. All the boys were required to keep personal daily account books. They were required to give 10 percent of their income to charity, to save 10 percent, and to account for all of the rest. They had to balance their account books ever month and to be able to tell what happened to every penny they earned. “

    • Retire Before Dad May 11, 2016 at 10:09 am #

      DGI,
      Great addition. I’ll need to check that out. This is my first experience with teaching him about money. In fact, we’ve only just started working on math. And he doesn’t really get it yet. So I wonder if I’m starting too early or if he doesn’t have a math brain.

      So this experiment is my way of learning to teach a young person about money. It’s easy to teach adult about money! But prior to having kids, I was never around them.

      Perhaps Rockefeller would be a good place to look for inspiration.
      -RBD

  2. Scott May 11, 2016 at 1:05 pm #

    Like the experiment. Maybe bump up the amount a bit. If he took out the trash for a year, he couldn’t buy a $5 toy at the store after tax. You don’t want to discourage his ambition when he finds out he isn’t able to do much with what he earned. I’m at the same stage with my first child. Good luck

    • Retire Before Dad May 11, 2016 at 1:28 pm #

      Scott,
      You make a good point. I originally said 10 cents on a whim. Not thinking it would be a regular payment. Not that he’s into it, maybe a bump to a quarter would be a good idea. Thanks for the input!
      -RBD

  3. Stockbeard May 12, 2016 at 7:08 pm #

    We still haven’t discussed allowance/money very seriously with our son. He’s turning 5 (today actually)… we should get started!

    • Retire Before Dad May 13, 2016 at 8:31 pm #

      Stockbeard,
      Time to get on it! Curious if he knows math yet. This next year he should really start picking things up. Slowly probably!
      -RBD

  4. Bret May 13, 2016 at 5:57 pm #

    My almost 4 year old son loves to help us collect the trash. After reading your post today I asked him if he would like to be paid for helping collect trash and he said no! I did ask him if he would rather have 10 pennies or 1 dime and he said 1 dime. I asked 2 nickels or 2 dime and he said 2 nickels. I asked 2 nickels or 10 pennies and he said 10 pennies. Pretty sure we went a full circle with that one!

    • Retire Before Dad May 13, 2016 at 8:30 pm #

      Bret,
      That’s a great story. Thanks for chiming in. Mine didn’t ever ask. It’s kind of a bonus. But he would definitely be excited without pay. Anything helpful, he volunteers immediately.
      -RBD

  5. lena May 16, 2016 at 2:36 pm #

    I have been struggling with this issue for years! How to get Tiny Eivy invested in helping the family because she is part of it while still providing an allowance so that she can start to play around with how money works. Our current system (which is by no means perfect) is this:

    Tiny Eivy has a few chores that she is responsible for (mainly, feeding the dog and cleaning her room)
    Every month on the first, she gets $10 to invest, $5 to give away (presents for friends or donations) and $5 to spend or save. PLUS – she gets 10% interest on her investments (some day we will have to lower this number, but for now, we’re talking about a few extra bucks every month at most). If she wants to pull from her investments, it take a week before she can access that money.

    She is only 7 but so far she has learned that investing is the best deal (yea!) and always invests her extra $5. She access her invested money every few months to get things like a new dress or doll, but we can usually hit up goodwill and get it at a fraction of the price (which she gets very excited about – oh she is so my child).

    Keep me updated on how your experiment goes. I’m still trying to find the perfect way to teach kids about money and if I tie that to chores.

    • Retire Before Dad May 16, 2016 at 10:35 pm #

      Lena,
      Thanks for sharing your strategy! I’m just getting started with our son and our daughters aren’t ready yet. I did increase his pay to $0.25 this Sunday thanks to a recommendation from one of the comments. He needs a decent sum of money to actually buy something. He wasn’t any more excited than normal to get the bigger coin. But he’s still really into helping. He’s even been sick the last few days and helped out. We also had a delivery to make two doors down and he helped with that. Hence, the extra pay this time. But that will likely continue.

      I do like the idea of separating money for different reasons. Spend, save give. We’re certainly not there yet, but hope to institute something like that in the future.
      -RBD

  6. Amy K May 16, 2016 at 9:35 pm #

    We pay our 5 year old for collecting the trash. She has to gather the can from each room and put it at the top of the stairs, where I dump it into a larger can to take downstairs. She’s then responsible for taking each can back to the room. Unfortunately on many weeks I forget that it’s trash night until she’s asleep, so I’m totally stiffing her.

    On the flip side, she never spends her money. When she was small I’d taker her to the store with her Christmas money, earmarked by great-grandma for a toy, and let her pick between a few things int hat price range. When she turned 4 I let her decide if she wanted to go to the store or hang on to it. “Keep it!” When she was 4 and a few months there was a game at the store she really wanted, which think actually sparked the trash collection pay. After a few weeks I remembered that she had Christmas money and asked her if we should go to the store to buy the toy with her money. “No, I don’t want to spend my money, I want you to spend your money.” She repeated that for a few weeks before finally deciding the game was worthwhile.

    She’s 5 and a half now, enjoys collecting money, definitely hasn’t figured out where to spend it yet, and when she wants something and I remind her she has money to buy it herself she repeats that she doesn’t want to spend her money, she wants to spend MY money.

    I’m very curious about how that attitude will work out when she’s an adult.

    • Retire Before Dad May 16, 2016 at 10:38 pm #

      Amy,
      Thanks for sharing. Still so young at 5 years old. I expect things will change quickly and we’ll need to be ready. All it takes is simple math skills. Looking forward to the neighborhood lemonade stands this summer so he can experience paying for something little. We hit a few up last summer and he loved it. The juice, and paying for it. Updating the post reflecting new payment level.
      -RBD

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