Personal Finance: Incentivizing Kids In School

I read an interesting article in Kiplinger's today. It was about whether you should pay your kids for good grades. The author said that is taking yourself down a slippery slope.

I have little kids at home, so I often wonder how they will do in school, and how I can light a fire under them to do better. I don't think its bad to use money as an incentive. I mean, this is the real world. And when they get a job, they will surely be incentivized by money to do a better job.

My initial thoughts would be something like $100 for every "A" they get. If they get straight A's, they can make some good money. But even if they only get one A, at least they get something. So if it looks like they can't get an A in a certain class, at least they won't just give up and quit.

• Here is what the Kiplinger's article had to say:

A plan by New York City's mayor Michael Bloomberg and schools chancellor Joel Klein to pay fourth- and seventh-graders for high test scores has prompted plenty of reaction.

In a tongue-in-cheek blog written by "NYC public school parents," the authors note that the kids are holding out for higher compensation. And a group of students calling themselves "Fifth- and Eighth-Graders for Fairness" are demanding retroactive pay for last year's tests.

In the Christian Science Monitor, one mother recounts a conversation between her 13-year-old son and his friends comparing rewards for their good report cards: a laptop for straight As, a cell phone, $10 per A. "What about high school and beyond?" frets Mom. "What would be left after the electric guitar, the portable DVD player and the iguana in the bedroom?"

Although these comments are meant to be humorous, they highlight a couple of serious problems with paying kids for grades. Because once you start down this slippery slope, you have to keep raising the stakes. And once kids get old enough to earn their own money, you lose leverage.

To read the rest of the article, click here