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Why Giving Your Kids Cash For Good Grades Is A Really BAD Idea

We all want to raise happy kids who become successful adults, right?
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That’s why we’re so drawn to the idea that strategically dangling ‘the right incentive’ in front of our children will ensure their future. Like a helpful puppet-master pulling the strings that lead them toward a future of rainbows, glittery awards and unending success.

Well, hate to break it to you Mom and Dad, as appealing as that approach sounds …paying for good grades is the wrong approach!

Confused about why? Yes, many parents are, so let’s look at this topic together …

At our son’s most recent baseball game, we heard parents in the stands chatting about all sorts of parenting struggles — from phone usage to crappy attitudes, and then THIS conversation sparked a heated debate:

Dad #1: “When is our daughter going to figure out thather GPA matters*? She’s a sophomore now! Her lame effort in classes where ‘the teacher is dork’ is killing her GPA and her shot at scholarships!”*

Dad #2: “Well, we pay our kids for their grades.”

At that last statement, the whole crowd of parents turned and started paying attention. The pitcher on the mound quickly forgotten, we all shared our opinion on whether Dad #2’s strategy was wise … or completely foolish.

Dad #2 held his ground, insisting that the carrot-and-stick method of motivation is “the way the REAL world works.” After all, he goes to work every morning to get the paycheck at the end of the week, so why shouldn’t he pay his kids for their grades?

It seems like obvious logic, but there are BIG problems in that approach for reasons you likely haven’t considered.

Are we saying you’re a terrible parent if you reward your kids with cash for their good grades? No, of course not! Not at all. We’re ALL attempting to raise good kids and mirroring adult world incentives to motivate our children seems like a no-brainer.

But, as financial planners who advise adults on making smart money choices (and help them raise money-savvy kids), we strongly advise AGAINST the ‘cash for grades’ approach to motivating school performance. Here’s why:

1. Paying for grades teaches kids that learning isn’t valuable in and of itself.

Paying for performance tells your student that the letter grades they receive are the ultimate goal, not the process of actually learning.

If your kids primarily focus on the final letter grades they receive, they’ll select the easiest classes in high school, ignoring more challenging classes because they might not score as well on those exams. Your children will also have no incentive to do extra work to fortify their learning. “Will we be graded on this?” becomes the deciding factor of how much extra effort they put in. And isn’t this exactly what people dislike about educators who ‘teach to the test’ instead of engaging students in creative exercises that encourage exploring new solutions and enjoying the process of discovery?

Learning and developing critical and creative thinking skills should be the focus of school, not grades. And, parents, you can help reinforce the value of that process by asking your children about what they’re learning in class. Try asking them:

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  • How did your viewpoint change?
  • Was there any part of the material you disagreed with?
  • Name five things you didn’t know when you started that class.
  • How can you apply what you learned to the ‘real world?’

Show your children that you value the expansion of their minds, not just their grades. And hey, if you have to fork over a little cash for ice cream to get them to sit and chat about what they learned … go for it! That’s money well spent.

2. Some “Money Personalities” simply aren’t motivated by cash.

Sure, YOU would personally love to get a windfall of ‘dolla dolla bills’ as a reward, but is that really what motivates your child? In our work as financial planners, we’ve identified five unique “Money Personalities” and we quickly realized that two of those fives Money Personalities are simply NOT motivated by cash (shocking, I know).

Which personalities don’t bat a lash at the green stuff? It’s the Risk Takers and Flyers. Trying to use cash to motivate kids with these Money Personalities is a waste of your time. Here’s why …

Risk Takers feel motivated by the possibility of the next, new thing. Encourage their performance by regularly asking what new concepts they’re exploring in class. Help them connect new information they’re learning to an idea that prompts their next big adventure, their next small business, etc. For example, studying rock formations in Geology class might inspire a rock climbing trip to Colorado or Utah. Motivate these learners by indulging their love of risk and adventure.

Flyers are predominately concerned about relationships. Listen closely and you’ll notice they talk about their classmates, who’s new in class, and what they’ve learned about their teacher. Motivate their success by showing the correlation between what they’re learning and how they can help other people with their newly acquired skills. They’re motivated by connection, not cash.

3. Paying for grades blocks kids from growing their ‘intrinsic motivation’ muscle.

All kids need to learn there are times when you just have to do what needs getting done … because it’s the right thing to do.

If you pay your student for their grades at school, where does it end? Do you have to pay them for other things they should intrinsically care about? Like, doing their chores, helping grandpa fix his computer, helping out in their community, eating healthy, not bullying other kids?

K-12 is not just about what kids learn in a textbook. It’s also a time for learning lots of intangible yet vital qualities, such as: honesty, hard work, kindness, patience, resilience, persistence, time management, etc. Things kids need intrinsic motivation to learn, even if doing so isn’t reflected in their grades.

Barbara Marinak, Assistant Professor of Education at Penn State University, told National Public Radio the research on monetary rewards is quite clear: They don’t work. “Any type of ‘extrinsic’ reward, by and large, undermines motivation.”

Of course, there is research on both sides, but, in our professional opinion — NOTpaying kids for grades is the smarter way to go for the big picture, long-term payoff.

We feel that raising intrinsically motivated children who strive to do their best is of far more value than simply raising kids with high GPAs.

Yes, great grades can help win academic scholarships. But, if your kids end up paying a little more for college, but understand the value of learning and doing their best, they’ll probably do better in their chosen career once they graduate. And, they’ll invest time helping others along the way because it’s the nice thing to do, even though they won’t receive a monetary reward.

We’d love to hear how you motivate your kids to succeed at your house, so please leave a comment.  And remember, parenting is the ultimate life challenge! No one has all the answers. Keep trying new things. Notice what works in a well-rounded way and then keep it up. Your efforts matter!


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