This article is from new staff writer Tim Sullivan.

I remember when my parents gave me a raise in my allowance. I was seven and I went from $2 a week to $5 a week because I started doing my own laundry and washing my own dishes. I was so excited to be a model employee. I remember that day plotting out just how many extra GI Joes I could buy in a year and how impressive and extensive my collection would be. Then I remember going to the pharmacy down on the main avenue and buying $4 worth of candy instead of $2. My whole GI Joe plan started to disintegrate in a heap of peanut butter cup wrappers.

You know what I remember more vividly? I remember the day my parents stopped giving me an allowance. It was the same year I moved my lemonade stand from Wednesday afternoon to Saturday morning and from the corner of my side-street to right down on that same candy-filled main avenue and saw my revenues rise tenfold.


Lemonade stands are so tired! This young entrepreneur is selling jokes.

From there, I started going around the house finding things that needed to be done, whether it be the deck re-stained or the water damage on the basement ceiling redone and I’d negotiate with my parents fair pay for the task. It usually didn’t matter that I had no idea how to replace a bathtub or efficiently organize a closet, there were books in libraries, helpers at local hardware stores, and now, google to offer a quick afternoon of learning. I now had an eye for opportunity and was learning skills that set jobs into motion.

Suddenly, I was investing my own time and energy into seeking out and performing tasks and from that, money took on a whole different meaning. It was now me, from start to finish, that made the money come in. Money somehow became heavier and it stopped being worth it to simply see it disappear toward frivolities.

In school, I had a very job-centered education. In high school, we were asked to buy into a path that would lead us to a good university, which in turn would get us a good job as a lawyer, or a doctor, or an accountant, or the ever vague business man. But for many people my age, that’s an outdated paradigm. What I found out, like so many other graduates, is that today, the jobs just aren’t there. So after the resumes were sent out and nothing came back — not even a no thank you, just nothing — I looked for opportunity and went about learning skills to set a job into motion, just as I did as a child. I became, in a sense, an entrepreneur.

J.D.’s note: Many of you probably saw the news yesterday that there’s a wealth gap between older and younger Americans. (I’m still in Peru, and even I saw this report.) While older people are expected to have more money than younger people, the gap is widening, and for a variety of reasons. In many ways, Tim is right: The old paradigms, the way we used to do things, don’t always work anymore.

The lessons I learned as a kid have helped me to make a living today, even in a tough job market.

Allowances for adults?
There are many ways to handle allowances for kids. Maybe there are chores that the child has to do around the house each week in order get his allowance, or maybe they do nothing and the money is simply meant to teach the child how to budget with a weekly income. You can use allowance to encourage money savvy — but given with no lessons, no lessons will be learned.

My friends who have graduated from college and managed to find a job all seem to be living paycheck-to-paycheck. They tell me stories that are not unlike my own $4-on-candy experience as a kid. It’s no longer candy, but shoes, or an extra glass of wine with dinner, or whatever the impulse is at the time that prevents the money from going to the bank. Not to say that any of those things are bad, but if some of the paycheck isn’t going toward savings, the childhood allowance didn’t teach them value that steady income.


Allowances serve a purpose, but there are other ways to teach kids about money

Encouraging entrepreneurship
There are other ways to teach kids about money. Instead of paying an allowance, you can encourage them to build their own businesses. You can help them set up lemonade stands (or something similar). You can encourage them to shovel snow for the neighbors. Or to sell their old video games on Craigslist. But it doesn’t need to stop there.

I remember posting signs around town and going door to door trying to get people to pay me to mow their lawn. I killed myself pushing my lawn mower down the street half a mile or more to get a client that just wanted a quick mow and realizing it wasn’t worth it. I saw that it was a lot easier to get the people on my block to have me come back more often. After that, after every local mow, I’d say “See you in two weeks!” and sure enough I’d be at their doorstep two weeks later. Yes, one in ten people turned me down, but I was nine-years-old and who could say no? At a young age, I was already learning the recurring revenue model.

To me, it seems like we need to encourage creativity in our children, to get them to think different. Maybe it comes down to not reading your kids a bedtime story every night, but making them tell one a night or two a week. Ask them to tell a story about their favorite stuffed animals or even their GI Joes. Help them to come up with ideas for chores instead of just telling them what needs to be done. Teach kids to be self-starters and not simply do-as-told.

And teach them to save. Put half their money into their toy envelope and half into their savings envelope. Even if it’s a small amount, they won’t feel much of a loss when they’re six. Walk them down to the bank every few months and help them deposit their money into a free savings account. I have 30 year-old friends who just now are deciding to contribute to some sort of retirement account. It breaks my heart that they could’ve been 25 years ahead of the game.

Thinking different
I’m still coming to terms with the fact that my career path is atypical. My income is directly related to how creative I am about finding clients and making them happy.

Each month, my income fluctuates drastically. (I’m having to learn how to budget for an irregular income.) I don’t have anyone working under me yet, but that may happen in the not-too-distant future.

So much of what I was taught at school taught me how to be a good employee. But I’m not an employee. I work for myself. Because of that, I’ve had to rely on the business experiments I made as a child. I’m grateful for the entrepreneurial opportunities I had and made for myself, as well as the support I had in following them. It’s made me realize that I should encourage children today to explore their entrepreneurial tendencies — and encourage others to support kids in the same way.

J.D.’s note: I, too, was a grade-school entrepreneur. Encouraged by my father, I had a variety of little businesses as a boy. None of these was a spectacular success — though they kept me in candy and comic books — but the lessons I learned then have helped me as an adult. Like Tim, I think it’s vital to encourage the entrepreneurial spirit in children.

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