How to Make Money When You Are a Kid

Earning money as a child offers valuable lessons that extend far beyond simply acquiring cash. It cultivates an understanding of responsibility, the direct correlation between effort and reward, and the fundamental concept of earning a living. Engaging in age-appropriate work can instill a strong work ethic from a young age, providing practical experience in managing resources and setting personal objectives. This early exposure to financial principles helps children develop a sense of independence and appreciation for the value of money.

Age-Appropriate Ways to Earn Money

Children can engage in various activities to earn money, with opportunities often varying by age and maturity. Many initial earning experiences begin within the home, where children can take on paid tasks beyond their regular household responsibilities. This might include special projects like organizing a cluttered garage, thoroughly washing the family car, or deep cleaning specific areas of the house. Such tasks provide a structured way to earn money while contributing meaningfully to the household.

Expanding beyond the immediate family, neighborhood services present numerous earning opportunities. Younger children, with appropriate parental supervision, can assist neighbors with simple chores. This could involve raking leaves, weeding garden beds, or watering plants. As children grow slightly older, services like car washing can be offered, typically for a small fee.

For slightly older children, opportunities expand to include pet care or snow removal. Dog walking services might involve daily walks for a neighbor’s pet, with rates varying based on duration and the number of animals. Pet sitting, which involves caring for animals while owners are away, could command higher rates depending on responsibilities and duration. Snow shoveling after winter storms can also be a lucrative option, with earnings varying significantly based on the size of the area and the snow’s depth.

Creative and product-based endeavors allow children to leverage their artistic or entrepreneurial skills. A classic example is setting up a lemonade stand, which teaches basic sales and customer service skills. Selling handmade crafts, such as friendship bracelets, painted rocks, or simple baked goods, also provides a tangible product for exchange. These items can be sold at community events, local craft fairs, or to family friends, with pricing depending on material costs and perceived value.

For older children, typically those aged 13 and above, some digital activities can offer legitimate earning potential with strict parental oversight. Certain online survey platforms allow teenagers to participate, providing opinions in exchange for points redeemable for gift cards or cash. While these opportunities typically do not yield substantial income, they can provide a small, flexible stream of earnings.

The Fair Labor Standards Act (FLSA) sets federal guidelines for youth employment, primarily for formalized jobs. For non-agricultural work, federal law generally prohibits employment for children under 14, with exceptions for certain activities like newspaper delivery or working for parents in their wholly-owned business. For 14 and 15-year-olds, the FLSA restricts work hours during school days and weeks, with limitations on working early mornings or late evenings. Understanding these age and hour limitations helps ensure that children’s earning activities do not interfere with their education or well-being.

Furthermore, federal law prohibits anyone under 18 from working in occupations deemed hazardous. This includes tasks involving dangerous machinery, excavation, or exposure to hazardous materials. Parental discretion is important in selecting tasks, as any earning endeavor should prioritize the child’s safety and avoid activities that could pose physical risks.

Important Considerations Before Starting

Before a child begins earning money, several important factors warrant careful discussion and planning between children and their parents or guardians. Paramount among these is safety and supervision, especially for activities that involve interacting with individuals outside the immediate family or working away from home. Parents should always be aware of the child’s location, who they are working for, and the nature of the tasks being performed. For neighborhood jobs, meeting the “client” beforehand and ensuring they are trusted adults is a standard safety measure.

Assessing age-appropriateness and skill matching is another crucial step. Not every earning opportunity is suitable for every child; physical ability, maturity level, and existing skills should guide the selection of tasks. For instance, while an older teenager might manage complex yard work, a younger child might only be able to handle simple weeding. Matching the task to the child’s capabilities prevents frustration and ensures a positive, successful earning experience.

Setting clear expectations upfront is essential for both the child and any individuals or families for whom services are being performed. This involves discussing payment terms, including the agreed-upon amount and when payment will be received. Establishing the expected hours of work and the specific responsibilities involved in the task helps prevent misunderstandings. For example, agreeing on whether a car wash includes interior cleaning or just the exterior defines the scope of work clearly.

Understanding basic agreements, even informal ones, is an important foundational concept for children. While these arrangements are typically not legally binding, they rely on mutual trust and clear communication. Explaining that a verbal agreement is a commitment and that fulfilling one’s obligations builds a good reputation teaches children about professionalism and reliability. This early exposure to the concept of agreements can serve as a precursor to more formal contractual understandings later in life.

Initial discussions about financial literacy should also precede or accompany earning efforts. Parents can introduce basic concepts such as the value of money, why people work to earn it, and the difference between needs and wants. This foundational understanding helps children contextualize their earning efforts within a broader financial framework. These conversations lay the groundwork for more sophisticated money management skills as they grow older.

Children’s earnings, even from informal jobs, may have tax implications. A dependent child generally needs to file a tax return if their earned income exceeds a certain threshold. If a child has unearned income, they typically need to file if that income exceeds a different threshold. The “kiddie tax” rules may apply to unearned income above certain amounts, taxing it at the parent’s marginal tax rate. Parents should consult current tax resources or a tax professional for specific guidance.

Managing Money Earned

Once money has been earned, teaching children how to manage it responsibly is a critical component of financial education. A fundamental step is tracking earnings, which can be done through simple, accessible methods. A basic notebook can serve as a ledger where a child records the date, the task performed, and the amount earned. This practice helps children understand where their money comes from and how it accumulates over time.

Guiding children on how to make decisions about their money can be simplified using the “spend, save, share” approach. This method encourages children to divide their earnings into three distinct categories. A portion can be allocated for immediate spending on desired items, fostering an understanding of purchasing power. Another portion is designated for saving, emphasizing the importance of delayed gratification and planning for future goals. Finally, a portion is set aside for sharing, which can involve charitable giving or contributing to family needs, promoting generosity and community awareness.

Setting financial goals provides a clear purpose for saving. Children can be encouraged to identify specific, achievable goals, such as saving for a particular toy, a video game, or contributing towards a family outing or vacation. Breaking down larger goals into smaller, manageable increments can make them feel more attainable. For instance, saving $5 each week for a $50 item demonstrates the power of consistent effort over time.

For older children, introducing simple banking concepts can further enhance their money management skills. A youth savings account provides a secure place for their money to grow, often earning a small amount of interest. Many financial institutions offer youth accounts, typically joint accounts with a parent or guardian, allowing for oversight while the child learns to make deposits and track their balance. Explaining how interest works, even at a basic level, can demonstrate the concept of money earning more money, a foundational principle of investing.