Teach your kids the art of the deal — from negotiating chores to spending their allowance


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The finances of young Americans are not in great shape.

The typical millennial has less than a week of salary (less than $1,000) saved for emergencies and leaves school with more than $37,000 in debt, on average. Many have nothing saved for retirement. Compounding these problems, millennials are also hesitant to negotiate: Only 37% of milennials have ever asked for a raise compared to 48% of baby boomers.

A lot of that comes down to parenting, experts say: Two-thirds of people ages 21 to 35 say their parents didn’t show them how to increase their wealth outside of having a job, a 2018 study from Pittsburgh-based financial services company PNC Investments found, and one-third said their parents did not give them any advice whatsoever.

So how can you do better if you have young children now? Here are the best ways to teach them finances and negotiation.

Start young

Children can negotiate before they can even speak, said Stuart Sopp, chief executive officer of Current, a digital-first banking system for teens. These skills can be seen in children as young as toddlers when they demand food or toys. Parents can harness these habits and begin to set boundaries.

Children can do basic chores like making their bed and picking up toys from a young age, experts say, and the earlier you start to reward these tasks, the better. As the kids gain more responsibility, parents should give them the option to ask for more money — whether through a chore chart or through an app.

“We need to give them tools of negotiation,” Sopp said, noting that the app Current allows kids to digitally ask parents for a raise, selecting new chores or different responsibilities. “The way we deal with money and people has changed.”

Chores and allowance

Help your child make a budget through chores, said Tim Sheehan, co-founder and CEO of Greenlight, a debit-card for minors. “Personal financial management skills are usually not taught in schools, but kids need to learn these skills if they are going to successfully manage their finances later as adults,” he said.

Chores with an allowance, a job with a paycheck, or even running a lemonade stand are all good ways for kids to learn the basics of business value exchange, he said. But be sure to diversify the tasks your child takes on and pay children equally.

Often boys take on more labor-intensive chores and thus are paid more, according to a June 2018 study from app BusyKid. Boys ages 5 to 7 earn 50% more in weekly allowance than girls, the study found. Be sure to monitor which chores your child chooses to keep them equal.

Embrace their innate skills

If you’ve ever cared for a child, you’ve likely experienced their ability to challenge your choices, whether it’s enforcing a bedtime, asking them to finish their food, or making them brush their teeth. Some of these rebellious behaviors can be used for good, Sheehan said. “Kids are natural negotiators, ask any parent,” he said.

This means providing a child with real-life experience: Ask them to do chores and give them opportunities to negotiate. Let your child determine if they have enough money to make a purchase, or make them calculate the check with tip at dinner. If a younger child wants a new toy, or an older child wants a phone, offer them the option to take on more responsibilities in exchange for pay.


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