Updated 03 December 2020
Should you give children incentives to do well at school? Or do you think bribery sends out the wrong message? Luckily thereâs a third option â which teaches valuable lessons of its own.
Unless youâre a very lucky parent, there will come a point at which you have to chivvy your children along to do their schoolwork. Youâre painfully aware of how close the exams are and how important it is to do well, but your kids donât seem to share that sense of urgency. At this point, many mums and dads pull out the carrot: achieve these grades, and Iâll buy you a [insert suitably expensive item here].
One problem with this approach is the law of diminishing returns. If youâve done it once then youâll probably have to keep doing it, and with ever bigger prizes. A second problem is that once youâve established a pattern, then schoolwork may become about the reward rather than the achievement. Children may actually begin to study less and less if you donât keep dangling the money in front of them.
The third problem with this form of motivation is that a big one-off reward is quickly taken for granted, so ironically the lesson itâs intended to provide often fails to sink in. Having won their prize, the child may switch off and forget they have to do it all again next time.
How money can motivate
There is a better way to reward children for hard work, while also teaching good working habits. Instead of promising a single big prize, some parents set up a savings account with regular small payments, as a kind of wage for doing school work. Small regular payments are easier to budget for, and payments can be paused or withheld with the click of a mouse if the child doesnât keep up their side of the deal.
How is this different from a big prize? Three reasons. Firstly, this kind of incentive rewards not an achievement (getting good grades) but an activity: doing the work. This is actually far more likely to deliver good results than the abstract command to âGet nine GCSEs at grade B or aboveâ. Such a big target may be too daunting to contemplate, so only piles on more pressure. But a series of small, achievable targets (âComplete this piece of homework wellâ) is both easier to grasp and more beneficial.
Secondly, the savings account is a neat parallel with whatâs going on in your childâs brain when they sit down to study. A little bit goes in each time, and over the weeks and months it builds up. Your child can check the rising balance of their âstudy accountâ and receive a confidence boost, when they realise that their own knowledge and understanding is also growing and accumulating interest.
Thirdly, the saving and the studying together teach a life lesson about effort and reward. Children come to realise that achievement doesnât happen overnight, but over long periods of time and many small steps. It demonstrates the link between work and money in a sustainable way â and can also end up being the most valuable lesson of all.
A school will teach your children maths, but not very much about the practicalities of money. Many people pass into adulthood without ever developing financial responsibility, because theyâve never been taught it. A study-to-save reward system at home can train children in the most effective way of all, through experience. By giving them a positive first experience of earning and saving money, you may even reduce the risk of your children getting into financial trouble later in life. And if they do get the grades they were hoping for, theyâll have a fund ready for their next stage of education â and they might even spend it sensibly, when they know how much effort went in.
Find out more about saving and investing at all ages.
For other ways to save and invest for your family, talk to a financial adviser.