Paying a child $10 for every A can sound like a simple way to turn report-card day into motivation day. For some families, paying kids for good grades provides a concrete goal and even creates an opportunity to teach saving, spending, and budgeting. But research on academic incentives suggests the results depend heavily on what parents reward and whether children understand how to reach the goal. A child who studies diligently and earns a B, for example, may deserve more recognition than a child who earns an effortless A. Before opening your wallet, it is worth considering what lesson the money may teach beyond the grade itself.
