Paying for Grades: What to Consider Before Promising Your Kids Cash for A’s

Here are helpful tips if you're thinking about rewarding good grades with greenbacks

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As the school year begins, family conversations may turn to how friends spent their summer break, the back-to-school fashions that are hot this year and — oh yes, grades. While talk about vacations and blue jeans won’t generally cause conflict between family members, grades can be a tough topic — especially if a child’s performance in school doesn’t meet his or her parents’ expectations.

When it comes to grades, I also hear a great deal of debate among parents about how to motivate their kids to do well in school. What surprises me is that for some, the carrot isn’t as much orange as it is green. When a friend of mine recently admitted to paying her son for good performance when he was struggling in school, her choice was met with mixed reactions from our other friends, ranging from disbelief to praise.

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How to best inspire children to learn and maintain good grades (understanding that the two are not always mutually exclusive) has long been a challenge for parents, even as educational grading systems and methods of teaching change. Research indicates that extrinsic rewards don’t necessarily motivate a child to perform better in school. According to a recent article in the Journal of Educational Psychology, paying kids for grades can work, but only for a small portion of students and then only for a limited time. Unfortunately, the method is most effective for those who are already motivated to achieve. 

Despite the research, it seems that some parents — and even some schools — still pay for grades or have considered it. If you’re thinking about rewarding your child’s high marks with cash this school year, ask yourself these questions first:

What am I trying to achieve? Offering cash rewards for grades is often a temporary solution — and a last resort. When my friend started paying her child, he was struggling academically and dreading every day at school. She was at her wits’ end, and money worked. But consider the long-term implications. Once your child has proven he or she can earn good grades, will you keep paying? If you choose to maintain this system, it can get fairly expensive, especially if your child also earns allowance or rewards for other good behaviors. But if you stop, will your child go back to his or her old underachieving ways?

Am I looking for A’s or for a change in attitude? Another issue to consider is whether you’re really trying to change your child’s behavior rather than just requiring him or her to meet the end goal (a good grade) in any way possible. In most instances, you’re likely better off helping your children improve habits that will help them get the most from their education — like good attendance, productive study routines and focusing skills — rather than offering a reward simply based on a letter grade. Doing so can also help your child create sustainable habits that will benefit him or her over time, while an A on a biology exam may soon be forgotten.

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What about my other kids? Children are different, with diverse abilities and reactions to praise and criticism. Rewarding all of your children with money for good grades may seem fair, but could be inappropriate for the style in which each of your children learn. While a $20 bill might be the surest way to see an A paper for one child, a simple “I’m proud of you” will have the same effect on another. Using the same reward for each child can also cause conflict and hurt feelings if one child earns more satisfactory grades than the others and therefore has more cash to spend on outings with friends or trips to the mall.

What message am I sending about education? Consider how your approach communicates your views on the role of education in your child’s life. I’ve heard parents say that school is their children’s “job,” and that paying them based on their performance will prepare them for the realities of the working world. Others believe that kids shouldn’t be paid to do what they’re already supposed to be doing — attending school and learning. In this way, it could be detrimental to teach your children to anticipate payment or recognition for doing what is expected.

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What values am I conveying about money? Financial values also differ from family to family. Once you start paying for something — whether it’s chores, grades or other positive behaviors — you’ve sent a strong message about the kind of value associated with that action. It may also be difficult for children to recognize the long-term impact of good performance in school when they’re only anticipating their next “paycheck.” Also recognize that motivating your child with the promise of a shopping trip or day at the amusement park in exchange for good grades may have the same effect since these items are still associated with a price tag. While your children are impressionable, it’s important to instill positive financial habits and values, so think about whether you feel that grades are really a form of work you want to compensate.

If your child does well in school, providing praise and recognition is wonderful. But setting expectations for a cash reward before he or she brings home an A may not necessarily work to motivate your child — and it may or may not help instill the values you intended.

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De Baca is vice president of wealth strategies at Ameriprise Financial.