How Kids Can Make Money: Safe & Practical Ideas

Earning money can be a beneficial experience for children. It instills responsibility, develops a strong work ethic, and introduces valuable life skills. Encouraging age-appropriate money-making activities helps them appreciate earning and financial independence. This provides lessons in goal setting and the value of hard work.

Age-Appropriate Opportunities

Opportunities for children to earn money vary by age. Children under 10 can begin by performing tasks around the home for payment. These tasks might include tidying their rooms, helping with laundry, setting the table, or assisting with basic yard work like watering plants. These activities foster contribution and introduce earning through effort.

As children enter their pre-teen years, ages 10 to 13, their capabilities expand, allowing for more ventures. Common opportunities include pet sitting or dog walking. Lawn care, such as raking leaves or shoveling snow, also becomes feasible, though operating power lawn mowers is not permitted for those under 16.

For teenagers, aged 14 and older, opportunities broaden to include formal employment and entrepreneurial activities. Babysitting is a popular choice; many organizations offer certification courses, though hiring ages vary. Teenagers can also explore tutoring younger students, offering academic support, or assisting elderly neighbors. Creative endeavors like selling handmade crafts online or offering graphic design services are also options.

More structured employment options become available for older teenagers, aged 14 to 17, though federal child labor laws impose restrictions on hours and types of work. The Fair Labor Standards Act (FLSA) prohibits employment for those under 14 in non-agricultural jobs, with exceptions for roles like newspaper delivery, acting, or working for a parent’s business. For 14- and 15-year-olds, permitted work is limited to non-hazardous occupations, with restrictions on working hours. These include not exceeding three hours on a school day or 18 hours in a school week, and not working before 7 a.m. or after 7 p.m. during the school year. Once a minor reaches 16, federal hour restrictions for non-hazardous jobs are lifted.

Beyond traditional jobs, the digital landscape offers avenues for teens to earn income. These include online tutoring, managing social media accounts, freelance writing, or graphic design. Some platforms allow teens under 18 to participate with parental consent, providing flexible work opportunities from home. Creating and selling digital products, such as art or educational materials, or engaging in online surveys and micro-task platforms can provide supplementary income. These roles teach digital literacy and entrepreneurial skills.

Important Safety Measures

Ensuring a child’s safety is important when they engage in any money-making activity, requiring parental oversight and clear communication. Parents should be aware of where their child is working, who they are working for, and the tasks involved. Understanding the work environment and individuals interacting with the child is a step in risk mitigation. This helps address concerns.

For service-based jobs, such as babysitting, lawn care, or pet sitting, parents should vet clients or employers. Vetting can include meeting the client in person, especially at their home, and obtaining references. Children should work in pairs or with a parent present, especially when starting new jobs or working for unfamiliar individuals. Maintaining open communication allows parents to check in regularly and ensures the child feels comfortable reporting issues.

Online money-making activities introduce safety considerations related to digital interactions and data security. Parents must supervise their child’s online presence, including platforms and shared information. Setting guidelines about not sharing personal details, such as home addresses or school names, with online contacts is important. Utilizing secure payment methods that do not require sharing bank account information directly helps protect financial data.

Secure handling of earned money is an important safety measure. Children should not carry large sums of cash. Parents can help them deposit earnings into a bank account promptly. This protects money from loss or theft and introduces them to banking practices. Discussing scams or unsafe situations, and empowering children to decline uncomfortable or suspicious requests, reinforces their ability to make safe decisions.

Managing Earnings and Financial Literacy

Guiding children in managing their earned money is an opportunity to cultivate financial literacy skills. A concept to impart is “save, spend, and share.” Allocating portions of earnings to each category helps them understand financial priorities. Saving teaches delayed gratification and accumulation, while spending responsibly allows them to enjoy their earnings. Sharing fosters generosity and community contribution.

Parents can assist children in setting financial goals, such as saving for a toy, a bicycle, or future education. Breaking down larger goals into smaller steps can make the process less daunting and more motivating. Reviewing progress helps maintain enthusiasm and provides experience in financial planning. This approach reinforces the connection between effort, saving, and achieving outcomes.

Opening a savings account, such as a custodial account, can provide a practical platform for managing a child’s earnings. Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) accounts are common custodial accounts where an adult manages assets for the minor until they reach the age of majority (typically 18 to 21, depending on state law). These accounts allow children to see their money grow, often with tax benefits, and familiarize them with banking processes like deposits and withdrawals.

Understanding the value of money is an aspect of financial literacy. This involves teaching budgeting, distinguishing between needs and wants, and making informed purchasing decisions. Engaging them in family financial discussions, such as grocery shopping or utility bill payments, provides context for how money is used. These experiences, combined with guidance, help children develop a responsible relationship with money.

Legal and Tax Considerations

When children earn income, there are legal and tax considerations, primarily concerning child labor laws and income tax filing requirements. Federal child labor laws, under the Fair Labor Standards Act (FLSA), set minimum ages for employment and restrict working hours and occupations for minors. While these laws aim to protect children’s education and well-being, many common child-led activities like babysitting, yard work, or delivering newspapers are not covered by these regulations.

A child’s income may be subject to federal income tax if it exceeds certain thresholds. For 2024, a dependent child must file a tax return if their earned income exceeds $14,600. If they have unearned income (such as from investments), the filing threshold is $1,300 for 2024. The standard deduction for a dependent child is limited to the greater of $1,300 or their earned income plus $450, up to the basic standard deduction for single filers.

Even if a child earns below these filing thresholds, filing a tax return might be beneficial if federal income tax was withheld from their pay, as they could be eligible for a refund. For self-employment income, such as from freelancing or small business activities, a child must file a return if their net earnings are $400 or more. While these guidelines provide a general understanding, specific situations may warrant consulting a tax professional.