Jean Chatzky

To bribe or not to bribe - your kids?

April 11, 2014: 10:27 AM ET

There are effective ways to do it, but careful -- it can backfire.

By Jean Chatzky

Show junior the money?

Show junior the money?

FORTUNE -- Okay, be honest: Do you bribe your kids?  Do you offer them cash (or similar rewards) for good behavior? For grades? For abandoning the cell phone at the dinner table? For keeping the cursing at bay?

I'll confess.  I've done it, albeit with so-so results. (My offer to pay to go to the gym was initially welcomed then discarded in favor of other, non-sweat-producing activities.) And so have half of all parents, according to the most recent T. Rowe Price Kids and Money Survey.  More than two-thirds of parents told the data collectors they're very or extremely concerned about setting a good financial example for their kids. Yet, bribery seems to fall within the acceptable boundaries.

That raised three questions for me:  First, is bribery on the up-and-up?  Years back I listened regularly to a radio psychologist named Dr. Joy Browne.  She was hugely in favor of bribery to get the desired results.  But does that opinion extend to kids and money?  Second, what's the difference between a bribe (which has huge negative connotations) and an incentive (which doesn't)?  And third, if you decide a bribe is okay after all, how do you structure it to produce the outcome you're looking for?  Here are the answers, one by one.

MORE: Welcome to the MBA business plan battle royale

Is bribery okay?  Yes and no.  If what you're looking for is a short-term fix -- getting your kid to try a new food, for example, or to capitulate and see the movie that the rest of the family wants to see -- a bribe can actually be fairly effective, says Dean Karlan, economics professor at Yale University and the founder of  You draw the line.  The child toes it.  You pay up.   (As an example: A friend of mine was having trouble getting her child to sit down to write her essay for the common app.  She offered a bribe -- even let the child name the amount.  Fifty dollars and two-and-a-half hours later, the child emerged with a "beautiful essay." The reason this is such a good example is because it was a task that would never have to be completed again.)

"The problem is that once that line is drawn you may have trouble getting your kid anywhere near it without a similar -- or larger -- payment in the future. "Understand, if doing X gets your kids Y, you're setting up a structure where that takes place," says Stuart Ritter, a certified financial planner with T. Rowe Price.  That means it can be tough to produce the desired behavior without paying for it next time.

What's the difference between a bribe and an incentive? Both are forms of negotiation.  You give a little to get what you want, the child gives a little to do the same.  The difference is that bribery usually happens in the crunch.  For whatever reason, you feel your child's behavior must change immediately so you make an offer that you hadn't planned on making. Incentives are a little more planned. (In hindsight, my gym offer was more incentive than bribe.) You've thought about what sort of carrot might bring about the sort of behavioral change you're after, and you're prepared to make an offer to spur the change.

MORE: How to lead a team when you're not the boss

Financial literacy expert Susan Beacham, founder of Money Savvy Generation, explains: "A lot of parents use a bribe not because we're confident it's the best parenting tool, but because we're tired." (Yep.  That sounds about right.) "We're overwhelmed and we want our child to do what's best, and we can't figure out how to use our words effectively enough to get them to understand it.  So we think to ourselves, 'Okay, the shortest distance between two points is to get them to just accomplish a task and over time, they'll get it.'  Unfortunately, a child who is given a bribe to do something is focused on the bribe, not the task.  So it doesn't work."

So how do you use both bribes and incentives more effectively? First, says Beacham, stop and think about why you're doing this -- and communicate that to your child.  Say your child has to read 20 books over the summer.  You want them to accomplish their goal (and are willing to bribe/incentivize) them to do that.  But what you really want is for them to start to enjoy reading.  It's okay to explain that.  And to offer ways to make the task more fun. (Reading on the beach is fun; so is a half-hour of reading time after what's supposed to be lights-out.)

Karlan suggests rewarding effort rather than outcomes (i.e. 30 minutes of reading rather than completing a book).  That way a slow reader is not likely to get frustrated and give up because he or she has the same shot at the reward.  And make it clear that this is a limited-time offer.  Otherwise, you risk them not wanting to read (or whatever) without being paid for it.  "Kids are pretty perceptive," says T. Rowe's Ritter.  "They're aware of what's going on."

Reporting by Kelly Hultgren

More from Jean Chatzky:

  • Are you paying too much for auto insurance (no, this isn't an ad)?

    Yes, there's a decent chance you are. Here's the lowdown.

    By Jean Chatzky

    FORTUNE -- The Consumer Federation of America ruffled the feathers of auto insurers this week when it made a fuss about something called "price optimization." You've never heard of it? Neither had I. According to J. Robert Hunter, former Texas Insurance Commissioner, now the CFA's director of insurance, it's a relatively new practice put in place by many MORE

    Apr 4, 2014 10:18 AM ET
  • How couples can talk about (gulp!) money

    Don't start with numbers. Start with your goals and your fears.

    By Jean Chatzky

    FORTUNE -- Politics, sex, health, religion, or money: Which of these would make you most likely to head for the loo (or at least top off your glass) if it came up at a dinner party?

    According to a new study by the deVere Group, a financial advisory firm in the U.K. -- money tops the list 60% of MORE

    Mar 28, 2014 5:00 AM ET
  • Planning for retirement? What you should know about target-date funds

    Increasingly, 401ks include investments in these 'set it and forget it' type of funds.

    By Jean Chatzky

    FORTUNE – More than 51 million Americans have an active 401(k) retirement account, according to the Investment Company Institute.  And if recent statistics from Vanguard hold across the category – more than half have at least some of their money in a target-date fund. That's a lot of dough and it's growing fast.  According MORE

    Mar 20, 2014 10:24 AM ET
  • Even 'good' debt isn't free

    School and home loans may be an investment in your future, but hold on! It still costs you.

    By Jean Chatzky

    FORTUNE -- In the last two days, I have read two newspaper stories that have me worried.

    The first, from Washington Post syndicated columnist Kenneth Harney, pointed to a huge rise in the amount of debt being taken out in the form of home equity lines of credit. "New home equity MORE

    Mar 4, 2014 5:00 AM ET
  • How to invest in stocks for the longer run

    People are living longer. So how much should you sock away?

    By Jean Chatzky

    FORTUNE -- The most frightening billboard I saw in recent months ran along the Westside Highway in Manhattan.  From the good folks at Prudential, it read:  The First Person To Live To 150 Is Alive Today, with the subhead, Plan For A Longer Retirement.   A few weeks later, our sister publication, Time Magazine, followed in tandem, asking the question on its MORE

    Feb 26, 2014 10:00 AM ET
  • How millennials can improve their credit scores

    Today's young adults carry lower credit balances and are less likely to pay their bills late. So why are their credit scores so low?

    By Jean Chatzky

    FORTUNE -- Last week, I wrote about your many, many credit scores, how to know one from the other, and how to move them all in the right direction. That's all well and good, but it will all go much more smoothly if you MORE

    Feb 19, 2014 5:00 AM ET
  • How to navigate the murky world of credit scores

    There are more than 50 kinds of credit scores out there. That's right, as in five-oh!

    By Jean Chatzky

    FORTUNE -- This column started -- as many do -- with a question from a reader. It ended in a place I didn't expect. As I followed the breadcrumbs and figured out what was going on in my reader's case specifically (which you'll read about in a minute), I learned about something MORE

    Feb 11, 2014 10:58 AM ET
  • Finally, a retirement plan friendly to smaller savers?

    Under the president's plan, myRA retirement accounts would be available to U.S. workers who don't have access to a 401(k) plan. 

    By Jean Chatzky

    FORTUNE -- In last week's State of the Union address, President Obama introduced the myRA (pronounced My-R-A, like I-R-A, not Myra, like your great aunt). It's yet another retirement account to add to the likes of 401(k)s, Roth IRAs, and SIMPLEs -- only this one is geared MORE

    Feb 3, 2014 11:29 AM ET
  • When being the 'good girl' is actually bad

    Lessons from Top Chef: Being too nice could cost women the top job.

    By Jean Chatzky

    FORTUNE -- Spoiler alert: If you've been saving the entire season of Top Chef: New Orleans to watch over a single weekend, stop reading. If you're caught up, or not watching at all, read on.

    A few weeks ago, season 11 of Top Chef was coming down to the wire, and it was a nail-biter. Six MORE

    Jan 30, 2014 9:36 AM ET
About This Author
Jean Chatzky
Jean Chatzky

Jean Chatzky is the financial editor of NBC’s Today show. Sign up for her free weekly newsletter at Follow her at @JeanChatzky.

Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by VIP.