Stop Paying Your Kids To Do Chores, Says Financial Expert – Here’s What Actually Works

Dil Bar Irshad | July 19, 2025 | 02:31 PM IST | Breaking News | Follow on Google News

Stop Paying Your Kids: Fresh approach to teaching money skills focuses on entrepreneurship and real-world value creation

Key Points:

• Financial expert explains why paying kids for chores can backfire, leading to entitlement and reduced motivation around household responsibilities
• Expert shares alternative approaches including teaching saving, investing, and earning through side projects that better prepare children for financial independence
• Financial expert reveals what age-appropriate money education actually looks like in 2025 and why traditional allowance systems need updating

The age-old debate continues: should parents pay their kids for doing chores? While families may see the approach as a natural way to teach children about earning money, one financial expert argues this approach might actually be doing more harm than good.

“Paying kids for basic household tasks can create a transactional mindset that doesn’t serve them well in the long run,” explains Fred Harrington, a financial expert with Vetted Prop Traders, a platform that helps traders navigate proprietary trading firms. “When we tie money to chores, we’re essentially teaching them that they should only contribute to the household when there’s a reward involved.”

With financial literacy becoming increasingly important as we move through 2025, parents are on the look out for smarter ways to teach their children about money management. Instead of relying on traditional chore-based allowances, Harrington suggests there are more effective approaches that can better prepare kids for real-world financial independence. He elaborates below.

Why Paying for Chores Creates Problems

If you’ve ever wondered why your child seems to lose motivation for household help the moment the payment stops, you’re not alone. Parents usually discover that tying money to chores can create more problems than it solves.

“When children get paid for basic responsibilities like cleaning their room or helping with dishes, they start viewing these as optional jobs rather than family responsibilities,” says Harrington. “This can lead to a transactional mindset where they only contribute when there’s a direct financial benefit.”

The psychology behind this approach can backfire in several ways. Children may become less willing to help out spontaneously or may even refuse to do basic tasks without compensation. Additionally, the system can create unrealistic expectations about how the working world operates.

“In the real world, you don’t get paid extra for keeping your workspace clean or contributing to team projects,” explains Harrington. “We’re accidentally teaching kids that basic responsibilities deserve rewards, which doesn’t translate well to adult life.”

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Better Alternatives That Actually Work

Instead of linking chores to payments, Harrington suggests several alternatives that can better prepare children for financial independence while maintaining the idea that family participation is everyone’s responsibility.

One effective approach is teaching kids about saving and investing through hands-on activities. Parents can help children set up savings goals for things they want, showing them how money grows over time through compound interest. This creates a more realistic understanding of how wealth is built.

“I recommend starting with simple saving challenges where kids can see their money grow,” says Harrington. “Show them how setting aside a small amount each week can add up to something significant over time.”

Another powerful alternative is helping children develop side projects or mini-businesses that don’t interfere with household responsibilities. This might include selling handmade crafts, starting a small garden, or offering services to neighbors like dog walking or lawn care.

“When kids earn money through entrepreneurial activities, they learn valuable skills about creating value for others,” explains Harrington. “This is much more similar to how real-world income works than getting paid for personal responsibilities.”

The Power of Family Financial Education

One of the most overlooked opportunities is involving children in family budgeting discussions. Some parents might worry about sharing financial information with their kids, but age-appropriate conversations can be incredibly educational.

“Children can learn so much just by understanding how families make financial decisions,” says Harrington. “Show them how you budget for groceries, plan for vacation savings, or decide whether to make a large purchase.”

These discussions help children understand that money is a tool for making choices rather than something that appears automatically when you do basic tasks. They also learn about prioritizing needs versus wants and the importance of planning ahead.

Age-Appropriate Financial Learning

Different ages require different approaches to financial education. Younger children (ages 5-8) benefit from simple concepts like saving for specific goals and understanding that money has to be earned. They can learn to count coins and understand basic spending decisions.

“For younger kids, visual aids work well,” explains Harrington. “Clear jars for saving, spending, and sharing can help them see how money gets divided and used for different purposes.”

Middle-grade children (ages 9-12) can handle more complex concepts like interest, comparison shopping, and understanding the difference between needs and wants. They can also start learning about different ways people earn money and how to make smart spending choices.

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“This is when kids can really start to understand that money is a tool for making choices,” says Harrington. “They can learn to research purchases, compare prices, and understand the value of waiting for things they want.”

Teenagers can learn about more advanced topics like compound interest, basic investing, and understanding how financial decisions impact future opportunities. They can also start learning about different career paths and how education and skills development affect earning potential.

Fred Harrington, financial expert at Vetted Prop Traders, commented:

“In 2025 we’re seeing a shift toward more sophisticated financial education for children. Parents are realizing that traditional allowance systems don’t prepare kids for the complexities of modern financial life. Instead of focusing on chore payments, we should be teaching children about value creation, delayed gratification, and understanding how money works in the real world.

“The most financially successful adults I know learned early that money is earned through creating value for others, not through completing basic responsibilities. When we help kids understand concepts like compound interest, smart spending decisions, and the difference between working for money versus having money work for you, we’re giving them tools they’ll use for the rest of their lives. The goal isn’t to make kids money-obsessed, but to help them develop a healthy relationship with financial planning.”

Dil Bar Irshad

Dil Bar Irshad is a seasoned journalist, hails from Jammu Kashmir's Doda, covers political, social, business stories, index stories.