A new app aims to help parents teach children the value of money
A new app aims to help parents teach children responsibility. Anjali Hazari finds out about its rewards system
Instilling values of hard work and responsibility in children is an issue that concerns all parents. In Hong Kong, however, where household chores are often managed by helpers, and children's lives are structured around school and related activities, parents often struggle with defining the contributions they need to make in becoming responsible family members.
An allowance introduces children to the value of money and facilitates the learning of important life skills such as saving, budgeting and planning.
But should an allowance be given to motivate children to assume responsibilities at home? Or should it be a tool for teaching money management? And how do you establish an appropriate correlation between the chore and remuneration?
Mark Lacek, founder of recently launched app FamDoo - which automates the allowance system and takes it into the digital age - understands these concerns well.
As the father of two girls, aged 10 and 12, he describes himself as a perfect customer for the app.
"Parents spend too much of their time nagging and trying to get their kids to do things that should help teach responsibility and the value of hard work. This often becomes a battle that no one wins," Lacek says.
"FamDoo was created as my effort to apply the tried and true methods of loyalty marketing that had been targeted to adults, and focus them on children," he says.
"Think of FamDoo as a frequent flier programme for your kids." Points earned can then be redeemed for e-gift cards from iTunes and Amazon, saved or donated to charities.
Lacek has extensive experience in this area. A major creative force behind the WorldPerks frequent flyer programme at Northwest Airlines, Delta Sky Miles programme, and a host of global brands, Advertising Age magazine hailed him as "one of America's best and brightest in advertising and marketing".
"If you provide the right incentives, you can change people's behaviour ... rewards work. I have worked with many frequent flier and other programmes around the world, and have found great success when matching a relevant reward to a desired behaviour," he says.
While FamDoo comes with preset activities, it's also possible for families to customise it and create their own. Once a child has completed a task, they send it for review. Parents can choose to award or deny points, or ask to talk. Families can also use the app to send messages to each other.
Once a child has chosen how they want to redeem points, the request is sent to the parent for approval. "With FamDoo, both parents and kids win. Parents see the results of the tasks they want done being completed, and kids earn rewards commensurate with completing the tasks," Lacek says.
Why does it work? Lacek cites a recent American Express Life Twist study where parents were asked what factors were most important to their child's success in life. Most (88 per cent) ranked "knowing how to spend their money well" as the second most important factor, behind being in good health (90 per cent).
"Overall, parents want their kids to be both financially savvy and live a fulfilling, happy life," Lacek says.
Psychologists use the term "operant conditioning" for learning that occurs through rewards and punishments for behaviour. Through this process, an association is made between a behaviour and a consequence for that behaviour.
"Allowance works because rewarding positive behaviour works. We also believe in the value of teaching young people the importance of financial responsibility by giving them the opportunity to earn their own money and make decisions about how to use it," Lacek says.
While extrinsic rewards can be an important tool in motivating behaviour, experts suggest using them with caution. Once children have been externally rewarded for performing an action, they assign too much importance to the role of the reinforcement in their behaviour.
In a classic experiment, researchers Mark Lepper, David Greene and Richard Nisbett tested the "overjustification" hypothesis with three- to five-year-old children. They were rewarded for drawing with felt tip pens, an activity that they had previously enjoyed doing on their own during playtime.
When the children were later offered the chance to play with the pens during playtime, the children who had previously been rewarded showed little interest in playing with the pens again. But those who had not been rewarded continued to play with the pens.
This suggests that an intrinsic interest in an activity is decreased by inducing a child to engage in that activity as an explicit means to an extrinsic goal.
Bipasha Minocha, a communications professional, agrees. Having experimented with FamDoo with her eight-year-old son Vansh, she says: "With very young children, the process of extrinsic motivation is counterproductive and does not help in the long run."
Minocha finds FamDoo is an interesting way of automating some routines in parenting.
"It helps document and monitor different aspects of our interaction with children, and gives an assessment of tasks and outcomes. It is a good way to develop an appreciation of financial responsibility among children."
But the app is relevant for teenagers who have developed a stronger sense of self, and a better understanding of expectations and responsible behaviour in finances, she says.
Human resources consultant Shweta Kumar, mother of eight-year-old Siddharth and four-year-old Aditi, loved FamDoo. But Kumar says there is room for improvement: "There should be some limit on the number of points that you can allocate to a trivial task, like, for instance, 'Fruit Challenge', and based on the usage over a period of time, the app should suggest points for a new task."
Also, "every time I finish allocating or evaluating a task, I want to be taken back to the homepage. Now it doesn't [do that]," she says. Insufficient time to try out the app precluded Kumar from commenting on the "penalties for not doing the task on time".
The central debate whether children should be paid to do household chores continues to have proponents who argue that children need to learn the value of becoming contributing members of a family, and should not be paid for household chores.
Allowances should be preserved as a tool for teaching money management. Others say that marrying housework to an allowance is good training for entering the workforce.
A 2012 survey by the American Institute of CPAs reports that the vast majority of parents require their children to earn their allowance. Eighty-nine per cent expect their children to work at least one hour a week and, on average, children put in 6.2 hours per week on chores.
But in Hong Kong, this debate seems to have a third dimension. A parent who wishes to remain anonymous says: "My view is to give children an allowance and have them consider getting good grades as their 'job', instead of wasting time doing household chores. They have to make it in a very competitive environment."
Lacek says: "FamDoo is not a silver bullet, but it is a powerful tool that can help in instilling values like hard work, honesty, responsibility, accountability and better communications."