Kids want things. They want lots of things. And while they sure are cute, they don’t bring in any income to offset the money you spend on them. In fact, kids are pretty much a money suck from the moment they’re born until the day they leave your home. And for some, even kids who’ve left the nest stay attached to the family wallet.
Luckily, you can give your kid a jumpstart on financial literacy through the art of negotiation, even when they’re young. This is not a quick method of training by any means. You’ll get tired, you’ll get frustrated, and on more than one occasion, you’ll want to give in to the whining because it will drive you utterly insane.
However, in the end it will be worth it. You’ll have taught your children the value of money. You will reduce the risk of having a child that depends on your financial support well into their 30s, 40s, and beyond. (See also: 7 Money Conversations Parents Should Have With Their Adult Kids)
Here’s how to teach your kids negotiating skills that will last a lifetime.
1. Start slowly
If you’re going to start tracking chores, grades, good attitudes, and self-generated initiative while tying that to a well-thought-out compensation system, you’re in for a big surprise. It just won’t happen that quickly or easily.
Choose one or two things to track and reward. Then add more once your kids have come to expect consistent outcomes with those things. (See also: The Easy Way to Set an Allowance That Won’t Ruin Your Kid)
2. Make a trade
You may think you have no advantage in this game. After all, your kids need things and you’ve got to provide them, right? Yes and no. You’re obligated to provide things like food and clothing. Does it have to be fancy food? Must you spring for designer clothing? Unless your kids do something to deserve these premium privileges, the answer should be “no.”
They want to eat out at a restaurant? Go to a friend’s house? Get extra screen time? These are all perfect opportunities to extract something out of them, like chores, or best behavior. (See also: 21 Things You Should Make Your Kids Pay For)
3. Be consistent
Once you’ve made a deal with the kiddos, do your best to deliver quickly. Set expectations, terms, and timelines so there is no question on what was negotiated. Put your deal in writing if you have to. Kids will either get super technical or conveniently forget and skew terms in their favor.
Being consistent and holding up your end of the deal will show you mean business. For this to work, they need to know there’s a reasonable chance that the consequence of their actions will always materialize, whether good or bad. (See also: 4 Parenting Mistakes to Avoid When Teaching Kids About Money)
4. Create a system
A system will help you keep track of it all. You can write down tasks and goals on a whiteboard stuck to the fridge or a clipboard as a checklist. If you are an electronic family, keep a spreadsheet or use an app.
Furthermore, if money is involved, try to have cash on hand to deliver on your negotiated rewards. It’s easy to say you need to get change then totally forget. Your kids will remember and will figure you aren’t for real when you don’t make good on your promises. They won’t be up for negotiating much when this happens. (See also: 3 Good Money Examples Every Parent Should Set)
5. Be patient
You might think your kids will be very motivated by this sudden change in how money and rewards are handled in your home. They’ll get more chances to earn money and other rewards for doing things they should be doing anyway.
To you, this new system should be a no-brainer. It seems like a win/win, right? The honest truth is that kids are pretty lazy by nature. Sure, there are those super-motivated, money-savvy kids you’ll catch on Shark Tank, but the average kid isn’t making deals on Shark Tank.
However, kids are also programmable. This is good news because they can be trained on your new system of good and bad consequences. The bad news is that it will take time to program them.
Stay committed to the cause and train your kids to understand the cause and effect of laziness versus productivity. If you’re patient and consistent, your kids will get used to this way of life. (See also: Should Your Kids Contribute to Family Money Goals?)