Incentives Matter

In a recent post, we discussed Personal Property Rights and how that legal principle affects the way you create processes in your home, especially when it comes to kids. Today, we will discuss another powerful concept in the life of a home. This time, it is an economic principle: incentives.

Incentives are “something that encourages a person to do something or to work harder.”

In the past, I have taken advantage of an incentive program offered through our electric company. They offer a small money back amount if we purchase and install certain energy-efficient windows. Another example of an incentive would be when employers offer benefits to employees who reach a certain amount in sales. Even retail stores have incentives that are easy to spot: buy one, get one-half off.

The goal of an incentive is to get you to do something that you may not otherwise do on your own, by giving you something you want in return. Some people would have done it anyway, but for the rest of us, often the incentive tips us over the edge to take the plunge and do the thing that the incentive suggests.

Now, consider how incentives work in the life of a family. Your children already have a good grasp of the idea of incentives. Consider the times when your children say, “Mom, if we are quiet during your meeting, can we go get ice cream afterward?” Or maybe they have said, “After we clean up the house, will you play a game with us?” At some point you have probably said to your kids, “After you are finished with your homework, you may play on the computer for 30 min.”

Incentives seem to be built into our conversations without us even realizing it. Kids view the incentive as a right rather than a motivating concept encouraging them to do something. While it is not a right but an incentive, part of the way you present it to your children can make all the difference. In addition, sometimes incentives aren’t quite so easy to spot or to put into place.

I challenge you to take notice in the coming weeks of how often you use an incentive with your children. The goal of an incentive would obviously be to produce a beneficial response that will encourage them to do something you want them to do. Because we are human and don’t always see things the same way, there are times that a system is put into place with expected results and instead we receive unintended consequences.

Here is an example:

In our house we have zones, which my children are required to clean up each day. When we all clean up our assigned zones, we can get the house tidied up in 10-15 minutes. While the efficiency of getting the house cleaned up very quickly is certainly attained, the unintended consequence is that now no one has the incentive to pick up their mess because inevitably it usually falls in someone else’s zone. The result is that we have a constant battle between children arguing over who should put the item away: a) the person who used it or b) the person whose extra room the item was located in.

Another more obvious example of an incentive is:

Years ago, when I was trying to encourage my children to remember on their own to buckle their seat belts, we instituted the $.25 rule. It stated that anyone caught not buckled by the time we had left the driveway of our house or the parking lot of the store would then owe $.25 to the ice cream jar. The plan was that after a certain amount of time, or once we had enough money, we would all go together and go out for ice cream using the proceeds of this incentive plan. Of course none of the children wanted to pay money for someone else to eat ice cream. But no one was too upset when they were discovered not wearing their seatbelt and had to pay up. Of course, I probably ended up paying more than anyone else. And I must say the kids were excited at catching me having not buckled my seat belt many times. So in this example, the intention of training the habit of remembering to buckle seat belts was reinforced and actually continues pretty well today. And in the end, it promoted family bonds in that no one person benefited from any other person and everyone benefited from the lapse of memory of everyone else since the whole family enjoyed the ice cream.

As a parent it is important for you to think through the incentives, both overt and subtle, that you offer your children. Most of the time, an incentive plan is more complex than it first appears. Are you offering too little incentive to produce the desired result? Too much? Is it long term or short term? If long-term, will it produce other issues? If short-term, will it produce consistent and lasting results? Should you get your kids to buy-in to the incentive or will that set their expectations too high? These are some of the key questions you need to ask yourself as you begin to process through the question of incentives.

Since one of the foundational principles in all of economics is the idea of incentives, you can be encouraged knowing that your children already have some minimal understanding of that concept. They are keenly aware of how hard they can push you to increase the incentive to get them to do what they don’t want to do. Of course, that incentive cost diminishes as they realize that you are still the parent and can require certain things with no incentives given. That understanding often tempers how far they think they can push you to increase the amount of the incentive. Regardless of what incentives you use, the idea of incentives is a concept that you will want to use as a foundation in many of your conversations with your children.

Incentives will come up again and again as we discuss ways to implement systems in your home and family life that also includes your children and their things. Systems of maintaining virtually everything in the household will bump up against incentive plans time and time again. There are benefits as well as unintended consequences that come with incentives and helping children navigate those differences is part of a parent’s job. What better environment to learn about these concepts and practice using them, than through family living?

As we venture into organizing family life with children from cradle through college, be encouraged that your children already have a small grasp on a fundamental system of motivation in our country. It is your job as a parent to refine that thinking, help the child to understand both external and internal incentives, and to know how to use wisdom in implementing incentives in everyday life.

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