How Can Kids Get Money? 4 Ways to Start

Earning money at a young age provides children with valuable financial understanding and independence. It teaches them about saving, spending wisely, and the value of hard work, preparing them for future financial responsibilities.

Household and Family Tasks

Children often begin earning by assisting with tasks at home, receiving compensation from family members. Parents can define responsibilities and establish payment structures, such as a fixed weekly allowance for chores or a per-task system. Assigning monetary value to tasks like deep cleaning, organizing, or preparing meals can incentivize participation.

Family pets offer earning opportunities through tasks like daily feeding, cage cleaning, or dog walking. Children can also undertake special projects such as painting, gardening, or minor repairs, providing practical skills and contributing to household efforts. Establishing clear expectations for task quality and deadlines helps children understand accountability and the link between effort and reward.

For tax purposes, payments from parents for household chores are generally not taxable wages. However, if a child earns income from self-employment or is formally employed by a parent’s business, it might be subject to tax. A dependent child must file a tax return if their earned income exceeds $14,600, or if their net earnings from self-employment are $400 or more. Filing may also be beneficial if federal income tax was withheld, as it could result in a refund.

Parents should maintain clear records of payments made to their children, especially if amounts approach or exceed tax filing thresholds.

Community and Neighbor Services

Children can expand earning potential by offering services to individuals and families in their local community. This provides opportunities to engage with others, build a reputation, and understand customer service. Common services include babysitting, pet sitting, or dog walking, requiring responsibility and adherence to schedules.

Yard work offers seasonal earning potential, including raking leaves, shoveling snow, weeding gardens, and mowing lawns. These jobs require physical effort and reliability. Other community services include car washing or delivering newspapers or flyers. With parental guidance, children can identify clients by speaking with neighbors or posting flyers.

Setting appropriate rates for these services is an important learning experience, often involving research into local going rates. Babysitting rates might range from $15 to $25 per hour, while yard work might be compensated per job or hourly. Safety is paramount when working for individuals outside the immediate family. Parents should ensure they know the clients, the work location, and maintain open communication.

Income from services to neighbors is generally considered self-employment income. If a child’s net earnings from self-employment reach $400 or more in a year, they are typically required to file a tax return and pay self-employment taxes. The self-employment tax rate is 15.3% for Social Security and Medicare combined. Parents should assist their children in keeping accurate records of all income and related expenses, as these can reduce taxable income.

Kid-Friendly Entrepreneurship

Beyond individual services, children can explore small-scale business ventures, fostering an entrepreneurial mindset. These opportunities often involve creating a product or specialized service for a broader audience. Examples include setting up a lemonade stand, which teaches production, pricing, and direct sales. Baking and selling treats like cookies or brownies is also popular, requiring attention to recipes, packaging, and food safety.

Children can also create and sell handmade crafts like greeting cards or friendship bracelets, leveraging their creativity. These can be sold at local craft fairs, school events, or to friends and family. Another path involves selling unneeded items such as old toys or books through yard sales or online consignment platforms, teaching inventory management and resale value.

Children with academic strengths can offer tutoring services to younger students in subjects like reading or math, requiring communication and patience. Those with tech proficiency might offer basic tech support for seniors, such as setting up devices or troubleshooting software. Parental involvement is important for initial setup costs, like ingredients or craft materials, and for oversight in pricing and marketing.

These entrepreneurial activities typically generate self-employment income. If a child’s net earnings from these ventures are $400 or more, they will generally owe self-employment tax. Proper record-keeping of income and business expenses is important for determining net earnings. For instance, the cost of ingredients for a lemonade stand or craft supplies can be deducted from gross income. This teaches children about the financial realities of running a small business, including tracking revenue and expenses to calculate profit.

Digital Earning Avenues

The digital landscape offers earning avenues for children, though these typically have significant age restrictions and require strict parental oversight due to privacy and safety. One option for older children, with parental consent and supervision, involves participating in online surveys. Many survey platforms have age requirements, often 13 years or older, with some requiring participants to be 18. Parents must carefully review platform terms and conditions to ensure compliance with privacy regulations and understand how their child’s data might be used.

For older children with substantial parental guidance, creating and monetizing online content can be a possibility, though it is complex. Platforms like YouTube or Twitch generally require users to be at least 13 to create an account, and typically 18 to directly monetize content, or 13 with a parent handling monetization. Content deemed “age-restricted” may have limited or no ad monetization, impacting potential earnings.

Monetization through advertising revenue can be inconsistent and is often subject to strict content guidelines. Alternative methods, such as direct donations or affiliate marketing, often require stricter age requirements or parental involvement. Prioritizing online safety and privacy is paramount in all digital earning activities. This includes managing personal information shared online, understanding platform rules, and being aware of potential online risks.

Income earned through digital avenues is generally considered self-employment income, subject to the same tax rules regarding the $400 net earnings threshold for self-employment tax. Parents should help their children track all digital earnings and expenses associated with content creation. The complexities of online earning, coupled with robust parental supervision, often make these avenues less accessible or suitable for younger children compared to traditional methods.