For years, financial gurus have been divided about whether to use money with kids as a reward for things like good grades. They’re not any more unified about whether it’s okay to fork over some bills or change forgeneral good behavior, such as using table manners. If you’re on the fence about this issue, it’s good to look at both sides.

Of Course You Should Use Money as a Reward!

Once kids receive funds for their behavior, the money is tangible evidence of what they’ve accomplished. For some kids, these tangible rewards can make the value of acting appropriately feel much more real and advantageous. It can help them get to the “Aha!” moment where they realize good choices yield good results.

Another consideration is that, in the real world, good behavior and money are connected. For instance, the employee who tells off his boss just because s/he’s in a bad mood isn’t going to get a promotion—s/he’s likely to get fired, or at the very least, reprimanded. Conversely, the worker who is considerate of others and works with a team mindset usually climbs the corporate ladder with rave reviews. In this way, linking money and behavior is simply preparing your child for the professional expectations they’ll have on the job, actually increasing the odds they’ll earn a decent income.

Are You Kidding? Money as a Reward Is the Worst!

According to some experts, money as a behavior reward doesn’t work because it puts finances ahead of personal relationships. Instead of your kid seeing how their actions hurt or benefit others, they see only that there’s been a negative or positive effect on their pocketbook. The worry, therefore, is that money as a reward can deprive kids of the chance to connect with others in ways that foster good mental and emotional health.

Secondly, it’s sometimes difficult to draw a line about which behavior deserves money and which behavior doesn’t. For example, if you reward your child for helping a senior citizen to their car, would you also reward them for giving someone quick directions? Kids might be confused about which behaviors are “good” based on whether the behavior gets payment, relying more on your external financial cue than their own feelings to figure out what’s best.

A Compromising Approach

Even though it can be tough to make distinctions about what behavior to pay your kid for, tangible rewards do have weight as a form of positive reinforcement. Additionally, even though kids have to be aware of how their behavior affects others, they also need to know that acting up in the professional environment can take them down a significant number of financial pegs, putting their own well-being at risk. A compromised approach to using money as a reward for general good behavior is usually best because of this murkiness.

If you choose to give money as a reward, make sure it is not a bribe, as money expert Janet Bodnar of Kiplinger recommends. For instance, if your child sits quietly with you when you eat out at a restaurant, give them some money after you leave, not before you sit down. The money, which the child won’t expect, then simply will confirm that they made the right choice on their own. The randomness of the money distribution also will let them know that you are watching their behavior all the time, not just in a few circumstances.

Some parents have great success providing money to their kids for good behavior by adding the requirement that the money be saved or invested. Alternately, you might have your child put the money toward a charity of their choice. This shows them that there’s a long-term aspect to how they act and that their behavior doesn’t happen in a bubble.

Bodnar also shares the following final tip, which you can apply regardless of whether you opt for your child to save or invest his “being good” cash: Keep the money rewards small. This advice is beneficial to you in that it keeps your costs manageable. You also will have an easier time emphasizing that the social ramifications of acting appropriately are just as important as—if not more than—getting paid.

Conclusion

Paying your child based on his behavior can work, but you need to approach it carefully. If you do it in a reactionary rather than preventative or bribing fashion, and if you urge your child to put the money toward something important (e.g., college, charity), they still can be intrinsically motivated toward good choices. Keeping the rewards small will help.