Should we be paying cash and rewarding good grades?

6 min. read

Published Dec 20, 2022

Would you pay your child $20 for an A? Or give your teenager money for making 1400 on the SAT? Around half of all US parents reward their kids for making good grades. But is this the right way to celebrate good results, and do kids need to be rewarded for effort?

Between preschool and high school graduation children take around 112 standardized tests. In big cities, students sit through as many as eight a year. And as kids spend so much time in school— about 1,000 hours each year—it’s no wonder parents want to reward them for doing their schoolwork and making good grades.

According to GoHenry research nearly half of kids receive gifts and money for academic achievements. A study on children and money by the American Institute of CPAs found nearly half of all US parents (48%) rewarded their kids financially for good grades.

The average allowance for an A was $16.60, but some parents pay as much as $20 for an A, with an extra $5 for an A+, and a bonus allowance at the end of the school year for their child’s overall GPA.

Despite this, parents are divided on the subject of paying kids an academic allowance.

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Why do some parents pay cash for good grades?

Some parents choose to pay children for good grades because they feel it reinforces the link between hard work and money. In corporate America, most employers pay for performance, after all. A performance-based academic allowance gives kids a ‘real world’ goal and can foster a strong work ethic.

When students have earned their reward there’s also an opportunity to develop money management skills. Weighing up the amount of work involved in earning this money may encourage them to spend and save more wisely as they grow.

Rewarding children for their academic performance today can save you money down the line, too. Star students are more likely to earn scholarships or merit-based aid than their classmates when they enroll in college.

Paying an allowance for good grades is not the only way parents reward their kids. For some, dinner at a favorite restaurant or a trip to the ice cream parlor is in order. Others recognize their children’s success with gifts like tech gadgets, games, or tickets to shows and sports fixtures.

“Many parents like to reward their kids when they get good results,” says Louise Hill, co-founder, and COO of GoHenry. “Often, the reward is to recognize how hard they have seen their child work, or because a high grade was achieved. Other parents feel rewards are a form of bribery and can hinder self-motivation. As with all parenting issues, it’s important to do what’s right for you and your child.”

Should I reward for grades or effort?

Should you reward for the grade at the top of the test, or how hard your child worked to get that grade? Some children get good school grades easily, and some don’t.

One child can give it their best. They work hard, study long hours, and bring home a C. Another won’t study at all, crams at the last minute, and brings home an A. Is it fair to reward only the Grade A student?

Rewarding effort may feel fairer but it can be hard to gauge.

“Instead of rushing in with rewards that your child may feel are unwarranted, talk with them about how they feel they did,” says Louise. “You may be surprised at how honest they are about their effort levels. Longterm, this may prove more rewarding and helpful than a one-off gift.”

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When could you start giving cash for good grades?

So when should you start incentivizing your kids for getting good grades? There’s no hard and fast rule. But paying children for good grades can happen long before high school.

Studies show that reading achievement, for example, increased significantly after incentivizing second graders. Math scores too, to a lesser degree. It might even be beneficial to start even younger while habits are still forming. It’s down to you as a parent to decide.

Does paying for good grades pay off?

So is it wrong to pay for grades? According to experts, the issue isn’t whether rewards are good or bad, but that they only work in the short term.

Research has found that American students try harder if you pay them. When high school-aged students are given money as a reward for performing well on a low-stakes assignment, scores improved by roughly five percent. But while studies show that cash payments tend to improve performance, the effects tend not to last longer than the duration of the studies.

Amy McCready, author of The Me, Me, Me Epidemic: A Step-by-Step Guide to Raising Capable, Grateful Kids in an Over-Entitled World, and founder of PositiveParentingSolutions.com, thinks you shouldn’t pay kids for grades because you can’t buy good grades for a long time.

“After a while rewards dampen excitement about a task,” she says. “If the reward is money for good grades, it sends the message that the reason to work hard in school is to enrich your wallet rather than your mind.”

What if I want to reward my child?

After weighing up all the pros and cons, some families decide that rewarding good grades and/or effort feels like the right thing to do. After all, it’s a great way to celebrate the end of a semester or moving up to the next grade level.

And don’t forget there are plenty of ways to reward your child. You could plan a fun family outing, throw a party, or let them take off for a music festival with friends.

Even if you decide that a monetary reward isn’t right for you, relatives and friends may ask if they can send something to celebrate your kids’ efforts. GoHenry’s Giftlinks are a great alternative to unwanted presents or gift cards.

Share a link with aunts, uncles, grandpas—you name it. They can add a little money to your child’s account. Then your kids can shop for a gift they really want, or save it towards something bigger.