Dad Makes His 6-Year-Old Daughter Pay Him Rent & Utilities Each Month
He's trying to teach his daughter the value of money.
Prostock-studio | Shutterstock Teaching kids about money is a difficult but necessary task for parents. One dad may have just made the task easier even for kids as young as 6. In a TikTok video, Michael Madden explained his allowance-earning requirements and the subsequent rent and bills he charges his young daughter each month.
His simple model is easy to follow for kids who are just learning to add and parents who are already overwhelmed with all the other tasks they are saddled with. While some might argue that 6 is too young to start these lessons, with the state of the current economy, starting early with healthy financial habits is a smart move that will likely pay off down the road.
A dad charges his 6-year-old daughter rent and utilities each month.
"Come with me to collect rent from my 6-year-old daughter," Madden began his video as he knocked on his daughter's bedroom door. He explained that this is something they do on the first of each month.
He charges his daughter $3 for rent and $1 for utilities, and after collecting the money, it goes right into a budget binder. Madden puts the $3 into the household envelope and $1 into the utilities envelope. However, it's not just about simply paying rent for his daughter. Madden is hoping that by doing this, his daughter is learning the value of earning money and how to budget, as well.
The daughter has to earn her allowance each month by completing designated household tasks.
Earning an allowance is a typical parenting strategy to teach kids the value of a dollar, but Madden's daughter is learning that if she doesn't complete her allowance tasks, she can't afford rent. It adds a level of intensity to the financial lessons that most parents probably wouldn't consider.
By doing weekly chores, the little girl can earn up to $5. Every task she does earns her points; if she completes all her tasks, she'll be able to qualify for her max allowance. "This week she hit 26 [points]," Madden said. "So we pay her what she earned. $5 into her envelope marked payments. She's learning about money, so she's financially savvy later." If she doesn't do her chores, she doesn't earn her allowance, and that would make paying monthly rent impossible.
It might seem a bit much to some parents who wouldn't want to stress kids out about money at such a young age, but it's certainly a lesson young kids can definitely grasp. Children rarely learn about saving, budgeting, and basic financial concepts in school. He's taking the lead to prepare her for the future. The earlier she learns budgeting lessons, the more likely she'll develop healthy money habits that won't be a struggle when she gets her first job.
Most parents give their kids weekly allowances.
According to a Wells Fargo study, 71% of parents with children ages 5 – 17 give an average weekly allowance of $37; however, 51% of parents struggle to talk about money in a way their kids understand. Basically, they're giving their kids money without teaching them how to use it.
Sharaf Maksumov | Shutterstock
The study also found that most parents (85%) think that giving their kids an allowance helps them learn about spending, but many (65%) feel it is difficult to step back and let their kids make their own money mistakes. So, parents give kids money without teaching them about money, and then step in when they are about to make a mistake with their money. In a nutshell, their kids aren't learning anything at all.
Age-appropriate money lessons are integral to teaching kids good financial habits from a young age. Psychologist Max Alberhasky encouraged parents to, if they don't already, start giving their kids allowances, but only as a form of payment for agreed-upon tasks.
"A practical tool parents utilize is allowances, or paying kids money to do work around the house, to develop an understanding of the link between effort and compensation. Encouraging children to hold a job in high school or college provides yet another example of establishing a practical and hands-on understanding of how money is earned," he insisted.
Alberhasky pointed out that when a child is mowing the lawn for money or taking out the trash, they're learning the tangible value of earning something for hard work. The earlier a child learns this principle, the better, he urged. While discussing money can be challenging, it's still a necessary lesson. The more candid conversations parents can have with their kids about money, the easier it'll be for them to manage their finances once they start paying bills and rent.
Nia Tipton is a staff writer with a bachelor's degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.
