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Teaching Children About Money : Your Kids vs. Your Wallet |
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How many times have you wondered whether your children think money does
indeed grow on trees? It probably seems like every time you turn around
your wallet is being attacked by the "gimme's". If you honestly examine
your spending habits (and those of your kids), you may realize that you
have not given them any reason believe that you don't have a money tree.
In truth, we all want things and kids are no different. How easy it is
to whip out the credit card(s) and instantly gratify our desires. What
message are we sending our kids?
What follows is a collection of ideas about how we can instill in our children a better understanding of money and how it works.
Establish a Savings Account and a Plan
Every child should have his own savings account even if it is just a
piggy bank. Whether your child receives an allowance or works a job,
establishing a savings plan is a must. Encourage your child to donate a
certain amount to charity (to help them develop a lifelong habit of
helping others). Then establish a certain percentage for long-term
savings (such as college) and short-term savings (such as clothes,
toys, etc.).
Saving for both long- and short-term goals will build a child's
confidence in her ability to save and helps her learn delayed
gratification. And, once the savings goal has been met, she may even
discover that the money would be better spent for something else.
Finally, allot a small percentage for discretionary spending. You might
find that the following percentages work well: 10% charity, 50%
long-term savings, 30% short-term savings, 10% spending. Find a balance
that works well for you.
Hold a Bill-Paying Night
This is a great activity to show your school-age children where your money goes. You might even learn a bit yourself.
First, assemble a list of your monthly and/or weekly expenses and their
amounts. The amounts don't have to be exact. Write the expenses and
their amounts on separate slips of paper. Then, add up your monthly
income and use pretend money (Monopoly� money or make your own) to
represent the amount.
Next, take the expense slips and give them to your children. Have them
come to you and "collect their bill" one expense at a time. This is an
excellent visual representation of how quickly the paychecks get
depleted!
Afterward, discuss ways you can cut your spending to help stretch the
paychecks for things that are really important. You might be really
surprised at your children's input.
Encourage Them to Work
Even young children can do extra chores around the house or yard to
earn extra money. Teenagers should be encouraged to get a job. Working
helps children understand that money comes at a cost, thus dispelling
the money-tree notion. Working also improves their self-esteem and you
can teach them to take pride in their work.
Have a Family Savings Fund
Save as a family for large expenses like vacations. Set up a jar or box
for keeping the money in and post a chart tracking your progress where
family members can be reminded.
Establish Spending Limits
Establish spending limits for items like clothes and shoes. Be willing
to pay so much for something, but your child must make up the
difference with his own funds if he goes over the allotted amount. For
example, he may want a $100 pair of shoes. You agree to pay what you
normally pay (say $40) and he has to pay the rest. New school clothes
take a huge bite out of the family budget; why not enlist the aid of
your kids? Agree to only pay for so much and then leave the buying up
to them (within reason, of course). They may surprise you with what
they are able to do with their money. Encourage them to watch for sales
in order to maximize their dollars.
Take Your Child Grocery Shopping
If your child can run a calculator, she can help you grocery shop. Give
her a fixed amount that you will spend on groceries and have her
subtract each item from the total as you shop. Teach her to compare
food labels and get the best product for the money. Ask for her input
about how you can reduce your overall grocery bill.
There are many ways to teach your children the value of money and help
them build valuable skills. If you don't teach them, who will? So take
the opportunity to call a cease-fire in the battle between your kids
and your wallet and work out a compromise in which both sides win.
� Simple Joe, Inc.
Chemain Evans is a quality control specialist for Simple Joe, Inc.,
makers of the popular Simple Joe's Expense Tracker PC software. Expense
Tracker is a quick and simple way to keep track of your expenses and
stay within your budget. Expense Tracker is ideal for tracking personal, business, home and club expenses.
This article may be freely distributed as long as the copyright,
author's information and an active link (where possible) are included.
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