How to Make Money as a Kid: Practical Ways to Earn
Teach kids practical ways to earn, manage, and understand money. Empower their financial journey from start to savings.
Earning money is a valuable experience for children, fostering responsibility and teaching financial concepts. Many opportunities exist for young individuals to generate income, from informal tasks around the home to more structured ventures. This process lays a foundation for future financial independence.
Age-Appropriate Earning Opportunities
Children can earn money in various ways, aligning with their age, skills, and maturity. Younger children, with parental guidance, can start with household chores. Families can assign a dollar value to tasks like washing dishes, vacuuming, folding laundry, or picking up toys. Simple acts like setting or clearing the dinner table or helping with meal preparation can also be compensated.
As children grow, their earning potential expands to include tasks for neighbors and family friends. Common opportunities include pet sitting or dog walking, earning $5 to $50 per week per animal depending on frequency and services. Yard work, such as mowing lawns, raking leaves, weeding, or shoveling snow, is another popular option, with lawn mowing earning $10 to $40 per yard. Car washing and cleaning also provide income for older children.
Creative endeavors offer another earning avenue. Children can make and sell crafts like friendship bracelets, handmade cards, or printed t-shirts and jewelry. A lemonade stand or bake sale is a classic method to sell goods directly to the community. Those with academic strengths can tutor younger students in subjects like reading or math, typically earning $10 to $15 per hour. Some online platforms allow users as young as 13 to freelance with parental supervision, offering services like writing, graphic design, or video editing.
Practical Steps for Earning
Once a child identifies an earning opportunity, practical steps are necessary to turn the idea into income. The initial phase involves identifying potential clients within the child’s network. Neighbors, family friends, or community members are often receptive to services offered by local children. Spreading the word through direct conversations, simple flyers, or local social networking groups can generate interest.
Clearly and professionally communicating services is important. This includes explaining tasks and expected outcomes. Setting a reasonable price is also important, considering effort and local rates. For instance, babysitting can command up to $20 an hour, while yard work might be priced per task or per hour.
Delivering the service effectively and reliably ensures client satisfaction and repeat business. This means performing work as agreed, being punctual, and maintaining a positive attitude. Following through on commitments builds a positive reputation for continued earning opportunities. After completing the service, collecting payment and expressing gratitude reinforces the transaction.
Managing Earned Money
Learning to manage money is an important skill that begins once income is received. A fundamental approach involves categorizing money into purposes like “Earn, Save, Spend, and Give.” This helps children understand money’s different functions beyond immediate spending. Regularly dividing earned money into these categories encourages thoughtful financial decision-making.
Saving is a primary component of money management, often initiated with a physical piggy bank. A transparent jar can provide a visual representation of accumulating savings, motivating younger children. As children get older and earnings increase, transitioning to a traditional savings account becomes beneficial. These accounts offer security, protect funds from loss or theft, and allow money to grow through earned interest. Setting specific savings goals, whether for a desired toy or a larger future expense, provides a tangible target and teaches delayed gratification.
Spending money wisely involves differentiating between needs and wants. Children learn to make informed decisions by considering what items are necessary versus simply desired. Basic budgeting can be introduced by tracking income and expenses. This can be as simple as using a notebook or spreadsheet to monitor money, helping children understand where it goes.
Basic Tax Considerations
When children earn money, potential tax implications exist, though many minors may not owe federal income taxes. The Internal Revenue Service (IRS) requires a tax return if a dependent child’s earned income exceeds the standard deduction for the tax year. For 2024, this threshold is $14,600. Earned income includes wages, salaries, tips, and self-employment income.
A child must also file a tax return if unearned income, such as from investments or interest, exceeds a lower threshold. For 2024, this amount is $1,300. If a child has both earned and unearned income, these amounts combine to determine if a filing requirement exists. Additionally, if a minor has self-employment income of $400 or more, they are typically required to pay Social Security and Medicare taxes, regardless of total earnings.
Even if a child’s income does not meet the filing threshold, filing a tax return may be beneficial if federal income tax was withheld from paychecks. Filing a return in such cases could result in a refund of withheld taxes. These guidelines are general; professional tax advice may be necessary for specific situations.