The 50 / 50 Rule

50-50 graphicNervous about the dichotomy between buying nice-to-have things for your kids and making sure your they learn what it means to earn their own way?  Welcome to the 50/50 rule.  When your kids want a _____ (insert seemingly important item that fits the “want” category rather than the “need” category), tell them that you’ll split the cost 50/50 with them.  Then immediately be ready to offer ways to make money with chores if they ask.  If they really want the item, they will do whatever it takes to get it.  And with the 50/50 split it’s amazing how often their 50% share is reasonably within reach if they will put in some effort to work for the money.  And if they come to you with an idea to sell homemade banana bread every weekend morning door-to-door in your neighborhood, you have the side benefit of knowing you’ve given birth to an entrepreneur.

I personally love the 50/50 rule and have evidence to prove that it’s worked exactly as I expected/hoped using my two college graduates as test cases.  It works for $10 wishes when the kids are in elementary school and extends to $200 wishes when they are in high school.  I’m even considering 50/50 matching on IRA contributions for the first 3 years of my girls’ working career to stress the importance of starting retirement savings as early as possible.

See my other blog posts on parenting here.

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen more than 1,500 startup pitches, given personal advice to more than 500 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, Gordon has two IPO’s and a $200M acquisition exit under his belt. Now, through his advisory practice called Shockwave Innovations and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon’s focus is purely on educating, advising and investing in tech startups.

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