How to Create a Token Economy System to Improve Your Child's Behavior

A young boy counting his piggy bank money
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If you are looking for a fast and effective way to get your kids to follow your house rules on a consistent basis, you may want to explore the idea of a token economy system. Although sticker charts work well with preschool-age children, a token economy system will work best with older children.

Whether you want to get your child to do their chores, follow directions at school, or refrain from hitting when they're angry, reward systems are effective discipline tools. Here is what you need to know about a token economy system, including what it is and how it works.

What Is a Token Economy Sytem?

A token economy system is one of the fastest and most effective ways to get kids to follow the rules. Similar to a traditional reward system, kids earn tokens throughout the day. Then, tokens can be exchanged for bigger rewards.

How to Create a Token Economy System

Sometimes parents create very complicated systems that are hard for children to understand and difficult for parents to manage. It's important to keep a token economy system simple so that both you and your child will stay motivated. Here's how to create your token economy system:

  • Break the day down into smaller chunks of time. You might reward your child for meeting his goals in the morning, during the afternoon, and during the evening. Waiting all day to earn a token can seem like too big of a goal and many children will lose interest.
  • Choose up to three behaviors to address at one time. Pick a behavior that your child is already doing well, one behavior that needs a little improvement, and one challenging behavior.
  • Create an appealing reward menu with a variety of items. Offer rewards worth a variety of point values to keep it exciting. Being able to stay up late might be worth one token but choosing something from the dollar store might be worth 10 tokens, for example.
  • Frame the desired behaviors in a positive way. Instead of saying, “Don’t hit your sister,” create a goal like, “Keep your hands to yourself.” Using positive reinforcement, state which behavior you want to see so you can reward the good behavior with a token.
  • Physically hand a token to your child whenever he earns one. Offer immediate acknowledgement for good behavior by giving your child a token for meeting his goals. 

Tips to Make Your Token Economy System Effective

A good token economy system should get your child excited and help him stay motivated to do better. And while it will take a little extra effort on your part initially, an effective reward system should save you a lot of time disciplining your child in the end. Here are some tips for making your token economy system as effective as possible:

  • Help your child find a way to store his tokens. If your child creates a special jar or box to keep his tokens in, he'll be extra motivated to earn more. Kids love to count, shake and look at their tokens.
  • Keep the token economy system positive. Make sure your child knows a token economy system is about rewarding his good behavior. It shouldn't be about punishing him when he makes a mistake.
  • Use pennies, plastic poker chips, or marbles for tokens. Make sure your child can't access the tokens. You don't want him adding his own marbles to the ones he's earned from you.
  • Use some free and low-cost rewards. They can include things such as picking what to eat for dinner, going to the park, or getting an extra bedtime story. Get your child involved by requesting his input into what rewards he would like to earn.

Troubleshooting Your Token Economy System

Token economy systems often take a bit of trial and error. Perhaps you made the rewards too easy to earn. Or maybe, your child just isn't motivated by the rewards you're offering.

If it isn't working to change your child's behavior, don't give up or get rid of the reward plan altogether. Instead, learn strategies to overcome the most common stumbling blocks with token economy systems. Often, just a few small changes can make a big difference in helping your child change his behavior.

Sometimes, behaviors get a little worse before they get better. Your child may have some difficulty adjusting to any new discipline strategies that you start implementing. So, make sure you give your plan plenty of time before you make any major changes to it.

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By Amy Morin, LCSW
Amy Morin, LCSW, is the Editor-in-Chief of Verywell Mind. She's also a psychotherapist, an international bestselling author of books on mental strength and host of The Verywell Mind Podcast. She delivered one of the most popular TEDx talks of all time.