How can small children contribute to the “family economy”?
Another suggestion I heard on the radio was to give the child the difference between the name brand they want, and the store brand they settle on.  Then that money can be accumulated as savings. Saving money is as important a feature of the family economy as earning money. Be careful with what you have a child do for reward vs what you have them do as a responsibility.  Don't set a dangerous precedent that certain work does not need to be done unless compensation is on the table.  You might have a child who relies on external motivations only to do things, which can make school work and future employment hard. I would instead have my child do yard work, but while doing it explain opportunity costs of doing the work yourself vs hiring out.  I would show my kid how saving money earns interest, and how that is essentially free money. Similar to the lawn care you mentioned: if you have space, you could have the kids create a mini-farmstand. They could grow flowers for cutting, some vegetables, etc. It would be a different twist on the classic lemonade stand. If the kids are into animals and space and zoning allows, you could keep chickens and add eggs to your mini-farmstand. Upfront costs for the garden would be small enough that they can learn about how investing in a business works at a very small scale. Along with learning about money, they also learn responsibility because it requires commitment and daily attention. It's also seasonal in a way that meshes well with school (though having animals is a constant year-round responsibility). "@MrChrister - Savings is a great idea. Coudl also give them 1/2 the difference, rather than the whole difference, as then you both get to benefit... Also, a friend of mine had the Bank of Dad, where he'd keep his savings, and Dad would pay him 100% interest every year. Clearly, this would be unsustainable after a while, but something like 10% per month would be a great way to teach the value of compounding returns over a shorter time period. I also think that it's critical how you respond to things like ""I want that computer/car/horse/bike/toy"". Just helping them to make a plan on how to get there, considering their income (and ways to increase it), savings, spending and so on. Help them see that it's possible, and you'll teach them a worthwhile lesson." There is also babysitting, dog walking and house sitting.  Depending on their age of course. You should also investigate what is required to get them the ability to setup their own Roth IRA.  I know one of the requirements is you can't put more into the Roth then was earned in income in the year.  They might also have to file an income tax return (not sure about that one).  Just think of how far ahead of the game they will be if they can get a couple of grand or more in a Roth account while in their early teens. If you're trying to teach them the value of money and quantifying the dollar difference between prices, one very effective way to do this is by using bar charts. For instance, if a toy is $5, and movie they really want to see is $10, and a vacation they want to go on costs $2000, it can be a useful tool to help explain how the relative costs work. "(Although I disagree with the idea of getting a child working a real job to early, (I think kids should learn at school, learn manners, learn what the world offers and have responsibility) Here is a list of ideas that a small child can do.  This is all assuming the child is to young for a work permit and a ""normal"" job.  I am assuming your live in the United States. Comedy Answer: Amway.  But forget about getting invited to birthday parties."
We are a pretty average (professional, used to be fully two-income) family. I have gone part-time (plus a total career change) to be more involved at home - that's minus 50K from our family budget a year. Montessori for the younger one is - 10K. Violin (-5K) and piano (-5K) lessons for each kid... summer science camps... summer golf/tennis plus equipment... dance/sports all year round are around 10K too. We are looking at an 80K hole in our budget (compared to what we could have had). Plus by now I would have been probably more advanced in my previous career had I stayed there, so the hole is potentially even greater. It's simple. Look, children are basically an 18-year debt, and if a couple is poor, they can't adequately pay that debt AND their own lifestyle costs. If those who can't afford that debt simply... delayed or abstained from reproducing... that would very easily solve the poverty problem permanently, so long as the next generation followed the same. This next generation would also have more of a surplus since their parents had to have had a surplus before having kids. Ad infinitum. This is exactly what happened in my own family so I know it's possible.  Ultimately, most poor people only have their parents to blame. The Child Care Expense Deduction (line 214) dollar limits will each increase by $1000, to new amounts of $8000 for children under 7 and $5000 for children age 7–16. Notes: As a tax deduction, your tax liability gets reduced at your marginal income tax rate, not the lowest tax rate (as would be the case for a tax credit). Yes, you still need receipts from your child care provider to support any claim. The non-refundable child tax credit a.k.a. amount for children under age 18 (line 367) introduced in 2007 is being eliminated starting in tax year 2015 coincident with the UCCB enhancement above. The credit could previously reduce tax liability by ~$340. The Family Tax Cut is being introduced and will be effective for tax year 2014. That is, when you file your 2014 income tax return in early 2015, you may be able to take advantage of this measure for income already earned in 2014. Provided a couple has at least one child under the age of 18, the Family Tax Cut will permit the transfer of up to $50,000 of taxable income from the higher income spouse's income tax return to the lower income spouse's return. While the potential transfer of $50,000 of taxable income to lower tax brackets sounds like a really big deal, the maximum tax relief is capped at $2000. I would disagree.  Not all children are set to have good life outcomes.  Those raised in poverty often experience a great deal of stress and suffering.  Raising children to be productive adults in beneficial to society.  Raising a child to continue the cycle of poverty and crime is not.  Many times, people voluntarily organize into a family unit whereby the husband earns an income which can be considered in paying the wife to raise the child.  Individuals are amazing at coming to voluntary agreements which help society. "This is a common and good game-plan to learn valuable life skills and build a supplemental income. Eventually, it could become a primary income, and your strategic risk is overall relatively low. If you are diligent and patient, you are likely to succeed, but at a rate that is so slow that the primary beneficiaries of your efforts may be your children and their children. Which is good! It is a bad gameplan for building an ""empire."" Why? Because you are not the first person in your town with this idea. Probably not even the first person on the block. And among those people, some will be willing to take far more extravagant risks. Some will be better capitalized to begin with. Some will have institutional history with the market along with all the access and insider information that comes with it.  As far as we know, you have none of that. Any market condition that yields a profit for you in this space, will yield a larger one for them. In a downturn, they will be able to absorb larger losses than you. So, if your approach is to build an empire, you need to take on a considerably riskier approach, engage with the market in a more direct and time-consuming way, and be prepared to deal with the consequences if those risks play out the wrong way." Perhaps this is lasting result of the recession.  I realize that the article specifically states that Lego notably grew and profited through the recession. However, other parts of society and other markets didn't. Now, years later, perhaps those other scenarios are affecting Lego's market.  Specifically, I'm drawing a parallel to my personal experience. My kids were born just before the recession. Their grade is the largest grade in the school system. Every grade behind them (the kids born during the recession) is significantly smaller. Whatever the driver(s) was, people were having fewer kids during the recession.   Further, although the general view is that the recession is over and the stock markets are back, household spending and income continues to stagnate.  With fewer kids and a reluctance to spend, perhaps people in the US and Europe just aren't buying as many premium toys. Using household income makes sense, as you would hardly expect differences in standard of living for members of the same household. True, more people in a family will mean more expenses, but not proportionally so. For a typical family of four, it wouldn't really matter if one or both parents contributed towards the household income. &gt; As a parent, I call bullshit on this.  I don't see why. You are confident your kids will be have more chances than you did because you are passing your wisdom onto them. Aren't they lucky to have you as parents?  &gt; ...a dynastic focus on generational wealth building simply cannot be called only luck.  Nobody is suggesting that wealthy people don't work.  I think the point of this article is that the poor work just as hard if not harder but kids from less successful households are naturally going to be taught life skills that are less effective. While personal responsibility plays a vital role in economic mobility, forces outside individual control, such as access to better work, clearly applies as well. Different folks apply different weight to responsibility vs. access to opportunity, but in any case one should be at least mentioned with the other. &gt; To imply a grand conspiracy...  No conspiracy required.  All you have to agree with is that having money makes it easier to make money and society will sort itself into classes that become further apart and harder to move between.  &gt; How about it is hard work and good parenting?  Those are important but exist in both rich and poor areas and it is a simple fact that you would get further with hard work and good parenting in a rich area than in a poor one.  I think a good way to describe it is inequality of affluent opportunity and experience. I have lived in communal houses. Most people don't want roommates. Especially if that means having several kids.  I feel like your arguments are practical, I suppose, but not realistic. If I had 3 kids right now, if anything I would probably be earning less money because my flexibility would be much less. I couldn't pursue an education to earn more money because I would still have bills to pay for my kids. My parents are poor, and they live in an area that my job options would be about 3, and none would pay much more than minimum wage. I am 26, but I have known plenty of 19 year old single moms who just aren't able to get a job that pays well enough to support them, and again, they have few options to develop new skills. I guess you can say it is their fault, but we can hardly say that subway shouldn't have to pay them overtime or what is really less than a living wage. Economists and reality have shown us time and time again that more wages overall means a healthier economy. Every state that has raised wages in the past few years is better off because of it. Every state that has done so has seen their economy grow, and joblessness go down. "I personally believe if one (average) income could support the needs of a family (nothing extravagant) and the parents had options (instead of only one of the parents having the ability to work for an income that supports a family) it would be better. At the micro view, there would be less grudges and more time for family. I feel bad now bc I'm stretched so thin I don't even have time to watch a tv show with our kids during the week.   In our situation, my husband never finished school (his mom let him drop out in the 7th grade) so his work options are very limited. He has had to work out of town jobs since before we started dating. I graduated high school but due to having kids early, I put off college. Because of the expense of daycare, I stayed at home with the kids for about 5 years. The plan is I get my degree next fall, get a decent paying job to support the family  and he can figure out what he wants to do as a career and be able to pursue it without having the pressure of HAVING to make an income to support a family. I have been nudging him to at least get an online high school diploma in the mean time but I think he is self conscious and scared he can't do it. We aren't the ""Keeping up with the Jones"" kind of people. I'm just trying to reach some goals and be financially stable and not worry about if we have enough money in the bank for bills or if the car breaks down if we are screwed.   A teacher's job is very time consuming so it definitely will be a challenge if you don't work a job that allows you to help out. At my internship this summer the CFO was able to just leave and bring his daughter to work whenever he needed to. That luxury is not afforded to many.   Also on a side note- when you have kids, please make an effort to take your paternity leave if your job offers it. You deserve it! Employees shouldn't feel bad for taking the benefits their company offers. Gender equality ftw!" If your skills are at the level of a McDonald's cashier than you should be compensated for that. You should NOT be compensated for a lifestyle which you WANT. Having a kids and a wife is a choice, no one is putting a gun to your head. If your skills are at the minimum(which is 2% in the USA) than you should not be supporting a family, it's simple. The kid with a father/mother at that level will have a terrible life, lazy parents who are not willing to work to better themselves. Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today.  First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed. Check out this recent Planet Money podcast on taxes & incentives via allowance for your children.  It might not directly answer your question, but it brings up some interesting things to consider when setting up an allowance for your children.