Like many parents, we've experimented with different approaches to motivate our children and manage behavior. After trying various methods, we've discovered a system that works wonderfully for our 4-year-old and 6-year-old: the Gold Coin System. It's straightforward, consistent, and teaches valuable lessons about money management along the way.

What Are These "Gold Coins"?

We use 50¢ euro coins as our currency of choice. They're perfect because:

They're actually gold in color (which makes them more exciting!)
They're a reasonable value for kids this age
They're easy to handle and count
They're "real" money, helping teach financial literacy

How Kids Earn (and Lose) Coins

Earning Coins

Our children earn coins through various activities and behaviors:

*We display ways that our kids can earn coins*

Daily Tasks

Emptying the dishwasher (2 coins - 1 for each level)
Making their beds (1 coin)
Getting dressed independently (1 coin)
Setting the table (1 coin)
Helping with groceries (1 coin)

Good Behavior

Staying in bed all night
Being kind to siblings
Helping without being asked
Going above and beyond

We also give surprise coins occasionally for exceptional behavior or unexpected helpful actions. This keeps the system exciting and reinforces positive behavior we want to encourage.

Consequences: Losing Coins

Just as coins can be earned, they can also be lost, which helps teach about consequences:

Instant Losses

Hitting (3 coins)
Unkind behavior
Deliberate rule-breaking

The "Service Charge" Concept

One aspect we have introduced recently is that we "charge" coins for services. For example, if they refuse to clean up their toys, we might offer to do it for them—but it will cost them coins. This teaches that services have value and helps them make decisions about effort versus reward.

Our Banking System

We keep our coin system organized with:

One large glass jar (the "bank") holding the main supply of coins
Individual personalized jars for each child (they have decorated these and updated them over time)

Coins move from the bank to individual jars for rewards, and back to the bank for consequences.

What Can They Buy?

The real magic happens when kids start making decisions about spending their coins. They can purchase:

Treats
Magazines
Toys
Special activities

This has been fantastic for teaching financial literacy. When they realize a magazine costs 16 coins (€8), they have to decide if that's really how they want to spend their money. Is it worth 16 coins compared to saving up for a LEGO set? These are real-world decisions they're learning to make.

Visual Savings Trackers

Visual aids really help motivate saving. Our favorite method:

Print a photo of what they're saving for
Draw circles on the photo matching the number of coins needed
Let them cover each circle with a coin as they save
Display it prominently as a reminder of their goal

If you're thinking of starting a similar system, here are some tips we've learned along the way:

Start Simple

Begin with just a few ways to earn coins
Make the rules clear and consistent
Post the earning opportunities where everyone can see them
Start with smaller saving goals to build confidence

Age Considerations

For younger kids (3-4): Focus on immediate rewards and simple tasks
For older kids (5-6): Introduce saving concepts and more complex earning opportunities
For school-age kids: Add budgeting challenges and longer-term saving goals

Common Challenges and Solutions

"My kids keep asking for coins for everything!"

Stick to your predetermined earning opportunities
Have a clear chart showing what earns coins
Be consistent with rewards

"They're spending all their coins immediately!"

Create a wishlist of bigger items they might want to save for
Discuss the benefits of saving
Consider offering "interest" for saved coins
Have regular money conversations

Making It Fun!

Decorating Coin Jars

One of our favorite activities was letting the kids personalize their coin jars. This creates a sense of ownership and excitement. Here's what you'll need:

Clear glass jars (we use old jam jars)
Craft supplies (stickers, ribbons, paint pens)
Name labels
Clear varnish (to protect decorations)

Let them go wild decorating their jars—it keeps them busy whilst you explain the process!

Making It Educational!

We've accidentally found several ways that it’s been really educational for our kids:

Math Skills

Counting coins
Adding up rewards
Calculating costs
Understanding basic multiplication (e.g., "If each coin is 50¢, how much is 4 coins?")

Financial Literacy

Basic budgeting
Delayed gratification
Understanding value
Making spending decisions
Learning about saving

Life Skills

Work ethic
Responsibility
Decision-making
Consequence awareness
Goal setting

When to Adjust the System

Like any parenting tool, you might need to tweak the system occasionally:

As kids get older and tasks become easier (initially each “gold coin” was worth a euro, but now they reflect real values i.e. €5 is 10 coins)
When motivation seems to be dropping - this is when we create challenges like “find mom’s glasses” with a 10 coin bounty!!
If certain behaviors need more focus
When saving goals are too easy or too hard to achieve
If you notice any unintended negative consequences

Have you tried a similar system with your kids? I'd love to hear what works for your family in the comments below!

The Gold Coin System - Teaching Kids About Rewards, Consequences and Money Management

What Are These "Gold Coins"?

How Kids Earn (and Lose) Coins