It is hard to believe that we are already three months into the year! One of the tasks that I confess that I have been putting off is updating the budget. So last Saturday I sat down and started really looking at how we are doing at telling our money where to go (notice I said telling and not wondering). There were a lot of things Mary and I learned, mostly good (however, we do need to work on the eat out spending). But, there was one category that we have neglected – COMMISSION. So I thought it would be good to share the concept of commission with our loyal MtS readers. Let me start by giving credit where credit is due – all these concepts are straight from Dave Ramsey’s Financial Peace University material.
We have three little people in our house and we are trying to teach them how to relate and be responsible with money. One way we teach them is to lead by example – we show them. I know this is working because if I go to buy something and I don’t have a coupon the kids are like “Dad – why don’t you have a coupon!?”
Another teaching opportunity is through letting your kiddos DO – or work. And this is where we let our kids earn commission. The idea around commission is if you work you get paid – if you don’t work you don’t get paid. Lots of people pay allowance but in most cases allowance is just given without any work or effort required. Without sounding like an old crotchety man we have a generation growing up with a sense of entitlement – they are work brittle! Commission is a great opportunity to start teaching your kids that money is earned through effort. A few things to consider about commission:
- Make sure the tasks you assign are age appropriate. For example, our 9 year old has tasks like take out the trash, empty the dishwasher and bring the dirty laundry downstairs.
- Not all tasks that happen around the house should be paid. There are certain things that a child should do “just because” as a member of the family. For example – keeping your room clean or in our house helping to set and clear the dinner table.
- Be visual! Make sure you give them the money (and only if they have earned it). Let them see and feel their commission. We review a simple chart at the end of the week to assess if commission is to be paid.
- Start budgeting early! We divide the commission each week into 3 categories- Save (40%), Spend (50%) and Tithe (10%, Deuteronomy 14:22). This begins the process of your child understanding that money shouldn’t burn a hole in your pocket. And when they really want that new video game- they have to evaluate their savings and spending.
- Make it fun! Often times the praise you give your kids is as much a part of the reward as the money.
So let us know – do you pay commission in your house? And if not, this could be one of your best new budget categories.
Also checkout reader Marcie’s great repurposed Commission Jars!
Fourth Friday Financial (FFF) is written by Mary’s Dear Hubby Andy, because he was “voluntold”. 😉 We have been together for 2 decades and you will begin to see that our differences compliment each other well. Through this monthly series we hope you find practical information for taking control of your finances.