Should You Pay Your Kids For Good Grades?

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As kids’ year-end report cards start coming home, many parents are considering this question: “Is it a good idea to pay our kids for doing well at school?”

Greenlight reached out to several family money experts for their advice. Here’s what they told us:

Expert: Neale Godfrey

What She Does: Chairman and President, Children’s Financial Network, Inc.

Pay for Good Grades: Yes or no? “No! Step away from your money! Getting good grades is the responsibility of and show of good behavior from your child. Getting money is the result of work and not of good behavior. I believe in paying money only for work.

“The other issue is that if you have more than one child in your family, one child could be working really hard to get Cs while another kid could be coasting to get all As. You should set separate goals for each child for each marking period. If they achieve their goals, the family should celebrate their achievement. A special outing of their choice—not money—is a great celebration.”

Expert: Rachel Cruze

What She Does: Speaker and co-author with Dave Ramsey (her dad) of Smart Money, Smart Kids

Pay for Good Grades: Yes or no? Cruze stands somewhere in the middle: “As a parent, it’s up to you to make that call. The most important thing is encouraging your child to work hard and do their best. Every child is different, so if yours responds well to cash incentives, then maybe you assign a dollar amount to their good grades that fits within your budget.

“Growing up, I wasn’t paid for good grades. However, my parents did pay me in the summer for reading leadership books and writing one-page reports. I say be creative and do whatever makes you most comfortable.”

Expert: Jesse Mecham

What He Does: Founder/CEO, You Need a Budget (YNAB) 

Pay for Good Grades: Yes or no? “I don’t think it’s a good idea and my wife and I don’t do it with our six kids. Hard work provides a sense of purpose and helps build confidence and character. Kids need to intrinsically understand that doing a good job is worth the extra effort because it feels good—to push yourself, to give your best, to accomplish something.

“In a similar vein, we don’t pay our kids an allowance for doing chores. We separate the two completely. They do chores because they are part of a family. They get an allowance so they can learn how to handle money.

“By paying kids for good grades, you risk teaching them that the only things worth doing are things that pay….If they are only ‘chasing the money,’ they may never find the thing that really brings them joy, the thing they could be really good at. Any job worth doing is worth doing well, for its own sake.”

(photo courtesy © Carissa Rogers cc2.0)

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Greenlight 2.0 – Jam-Packed With The Features YOU’VE Been Asking For

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Hi everyone, Tim Sheehan, Greenlight Co-Founder & CEO here with some exciting news – Greenlight 2.0 is HERE! That’s right, if you haven’t already heard, the brand new version of Greenlight has just made its way onto the scene.

When we started mapping out what we wanted to include in Greenlight 2.0, we reviewed all of the amazing comments, suggestions, ideas, etc. we’ve received from our Greenlight families. All of that feedback helped us create this updated version of Greenlight that we hope you’ll love!

What’s new in 2.0?

 

New Look
You’ll notice immediately when you open the updated version of Greenlight that there is a new look and feel to the app. Our goal with this version was to make the app even easier to use while incorporating some great new features and functionality. I think the app looks fantastic especially when you add pictures of your kids.

ATM Access
Now, when your child needs cash (e.g., to buy something from a place that only accepts cash), you can add money to the “Any ATM” greenlight to set a specific amount that your child can withdraw from any ATM. (i.e., only the amount of money that the parent specifies in the “Any ATM” greenlight may be withdrawn from an ATM.)

Savings Goals
Also brand new in 2.0 is Savings Goals! This feature allows your child to set aside money for a specific purpose – like a new bike, cell phone, game, or trip – and visually see how they are making progress toward reaching that goal! Also, Greenlight kids will receive Parent-paid Interest on the money they save in their specific Savings Goals accounts.

Giving
Greenlight’s brand new Giving feature allows Greenlight families to allocate a certain portion of a child’s funds to be set aside for donations to charities and purchases from non-profit organizations. This is something that hits very close to home for many of us on the Greenlight Team. We have seen numerous Greenlight families express this same sentiment and request a feature that would make it easier to allow their kids to dedicate a portion of their money for charities that they are passionate about.

These are just a few of the many new and improved features within Greenlight 2.0. Don’t just take my word for it though, take a look for yourself! 🙂

Check out the new Greenlight app!

Don’t have Greenlight yet? Sign up now!

Have you already played around with the latest version of Greenlight? Does 2.0 get the Greenlight from you and your family? Please let us know by sending us an email or by messaging us directly within the Greenlight app (go to Settings > Help > Contact Us).

All of us at Greenlight are focused on 1 goal: to help parents raise financially-smart kids. We’ll continue to work hard toward that goal.

THANK YOU for being a Greenlight family! 🙂

Tim

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Greenlight Kids Save 3 Times More than the Average U.S. Household

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As the average U.S. household debt continues to rise, Greenlight families are seeing a different trend. We’re thrilled to announce today that Greenlight kids have saved more than $1 million dollars using Greenlight Savings, The Educational Savings Account for Kids. Official story here. With the average U.S. household savings rate at 2.8%, Greenlight kids are saving a whopping 8.4% of their money on average. That’s triple the national average!  

The Educational Savings Account for Kids allows kids to see real growth in their savings account, how interest works over time, and the impact of spending versus saving, which helps them understand the importance of saving for the future. Not only that, but parents can set their own interest rate and pay the interest automatically within the child’s Greenlight Savings. The national average interest rate for bank savings accounts is 0.08%, making it difficult to educate kids on the value of savings. The average interest rate set by Greenlight parents is 19.84% enabling kids to see the benefits and importance of savings almost immediately.

Since April, Greenlight kids have more than quadrupled the amount of money in their savings accounts. We are proud to continue offering new features like the Educational Savings Account for Kids as an option that is convenient for families and offers flexibility for each family and each child’s unique needs. We are helping parents teach their kids to be smart about money and set them up for success financially, and are hopeful that impact can change the financial course for a new generation.

We’re on a mission to help parents raise financially-smart kids and are thrilled to see so many families using Greenlight Savings to teach their kids the importance of saving. But, we’re not done just yet. We have several new features that we’re excited to release in the near future. Stay tuned!

 

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