The Allowance Experiment: Part 1

The Allowance Experiment: Part 1
Introducing the Youth to Web3 and Blockchain Technology

DISCLAIMER: THIS IS NOT FINANCIAL ADVICE

When my kids started inquiring about receiving an allowance and what they could do for money, I thought long and hard about the best way to approach this. I didn't want them to feel entitled and that they could get money for just being alive but also didn’t want it to turn into “I have to labor for money” mentality. Careful consideration was given of not only the tasks and chores that they could carry out but also the medium in which we paid them for the work they had been doing.

What transpired next became the inspiration for this entire website and project… The Allowance Experiment.

The first thing I did was create a chores/task list and break it into daily, weekly and biweekly tasks (make it reasonable for their age and ability) like cleaning room {weekly}, vacuuming living room {daily/as needed}, emptying dishwasher or putting away dishes{daily/as needed}, taking out trash and recycling {daily/as needed}, laundry {weekly}, cleaning their bathroom {biweekly} etc.

After selecting the tasks that each child could perform, I wrote out an agreement for each of our kids, highlighting the expectation of chores and tasks to be completed and the compensation they would receive for said chores being completed. I also included a provision stating that 50% of the work completed (or if the job is half-way done) then that would result in 50% of the pay.

Then came the real meat and potatoes... how and when they would get their cold hard cash (and cryptocurrency in this case).

After spending some time with this notion, I concluded that this was the perfect time to introduce them to not only the principles of money management, saving money and investing but also in blockchain and web3 technology.

We closely monitor and manage screen time so I saw it as the perfect time to implement a Computer Sciences program into our Higher Learning Academy for all things blockchain, web3 and AI related subjects. It was a match made in heaven and the timing couldn’t have been better! They were wanting to be on the computer more and more and not just to FaceTime their grandparents. I had found some cool learning and free educational games and setup digital library accounts for book reading, but still, I knew there was a better way to meet this enthusiasm for technology.

So, we agreed to compensate them in 50% cash (paid every two weeks) and (the part I get excited about):

50% (paid once a month) sent to their web3 wallet in USDC. I chose USDC as it is a stablecoin pegged to $1 so they could choose to invest in other tokens with that or just hold the stable coin in their wallet like a savings account. I chose Solana because of the speed and low costs and also the ease of use of the web3 Phantom wallet and the use of the DEX Jupiter from my own personal experience.

I built and used a basic investment calculator and showed them how X contributions over a certain time period with a Y% return would give them Z amount when they were older. I found it helpful to cater this around something they are passionate about as the chances are slim to none they get hype about investing in blockchain technology. My oldest loves horses, so we mapped out a plan that can realistically yield her enough money when she is older to purchase her own very horse and saddle. She was hype about this being a possibility to say the least so she is way more open to listening and learning as I have been going through and showing her the ropes on investing in and using this technology.

Why Introduce Youth to Web3 and Blockchain?

Blockchain and cryptocurrency represent the future of finance and digital interaction in my opinion. Introducing young people to these concepts early will help them:

• Understand decentralized technology: Blockchain is reshaping industries, from finance to entertainment. Learning how decentralized technologies work can be a critical life skill in the future.

• Learn financial responsibility: Managing cryptocurrency teaches young people about budgeting, investing, and saving in a secure and transparent way while also getting in some computer time and practice.

• Explore innovation: Web3 allows them to be in charge of their own digital money, interact with decentralized applications (dApps), experience peer-to-peer transactions, and participate in a new global economy.
  
  In summary, our approach to introducing our kids (and any youth for that matter) to Web3 and blockchain technology is by giving them a portion of their allowance in cryptocurrency.
  
  In part 2 of the Allowance Experiment we’ll explore how to implement this strategy by using Coinbase to purchase USDC, send it on the Solana blockchain, creating a Phantom wallet to receive the USDC, and engaging with the decentralized exchange (DEX) Jupiter DEX.