Rewarding Good Grades: To Pay or Not to Pay?

Many parents, like myself, wrestle with the idea of how to reward our children for the good grades they achieve in school. Before I had kids I thought of different ways I could show them that their hard work is appreciated. I heard the horror stories of giving children money and how by doing could turn them into heavy spenders with no concept of how to save for the future. People told me to buy small toys and dole them out to them when report cards came due. Once it was even suggested to me that I could bring them to see a movie or go out to dinner to reward my child's diligence.

While all of these ideas are creative in their own way, I finally decided to reward my little ones with cold, hard cash. In fact, my daughter just received $5 for doing well on her last report card.

I don't feel there's anything wrong with giving money. Whether it's the newest toy or a night of pizza and ice cream sundaes, they definitely have an idea of how they want to spend their reward. Sure, I could buy it for them and tell them that they're being rewarded for their hard work. But by giving them the cash I can turn it into a life lesson. They know that if they use all their money toward a video game, they won't have enough for a board game too. They have to make some hard decisions about how to balance their money.

See, I'm teaching them responsibility. My daughter knows that if she wants a trip to Chuck-E-Cheese and it's not her birthday, she's going to have to pay for it - and she happily does. The money I give her is used for whatever she wants it to go toward. And believe it or not, she's a better saver than I am. She can squirrel away that cash for months before she finds something that's worthy to be bought. Now that's being smart with money.

Rewarding good grades with cash gives me a chance to teach my kids how much items cost, how to count money, how to save and also how to avoid wasteful purchases. What better way to raise people who can fix the economy than by teaching tomorrow's generation the mechanics of how to manage money?