HELPING YOUR CHILDREN TO BE MONEY SAVVY

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HELPING YOUR CHILDREN

TO BE MONEY-SAVVY

Penny Parenting

By Mia Cronan

mia

Copyright 2005

 

Like many things in life, it takes parents' intervention to

help children gain a full understanding of how money matters

work.

 

Many children seem to think that the coffers never run dry,

and if they do, we just drive up to a machine, stick a card

in, and money comes out. Neat!

 

What they don't see is what happens behind the scenes, where

Daddy and Mommy work very hard to bring the money home and

make it stretch as far as they can. They also don't see us

putting the money in that machine to begin with, so that

there's something there to pop out when the card goes in.

 

Why should they see it differently? They're children, and

they go with what's apparent. That's what makes our role a

challenge, and it can be a fun road to travel while your

children learn about money management.

 

Recently, my daughter broke her favorite hairclip by playing

rough with it after she had been told several times not to.

She shrugged her shoulders and said, " Well, we can just go

out and buy a new one. "

 

She's right; we could do that. But based on principle and

the fact that I had before me fertile ground for teaching a

lesson, I said, " No, we can't do that. " I went on to explain

that we can't always just " go out and buy a new one, " and

that sometimes we have to make do with what we have. That

includes caring better for the things we already have.

 

She was hardly impressed with the imparting of my wisdom at

this point, but I'm hoping that the lesson will gain merit

with her maturity.

 

I remember years ago my father fighting with a toaster to

get it to work, because he couldn't just " go out and buy a

new one. " That's the way things were, especially since he is

a product of the Depression-era. Caring for and repairing

what you had was a way of life, and they knew no other way.

They would have been mighty surprised if they could see into

the future and watch us dispose of the things that get a

little scratched up or having a button missing.

 

Fortunately, children are innately curious; you can use that

curiosity to your advantage. Here are a few ideas to help

you guide your children down the right financial paths.

 

Start as early as age three! You might be surprised at how

well a wee one can wrap his mind around money concepts.

Children love numbers, so why not money numbers? That, in

conjunction with their need to learn about delayed

gratification, offers you a wonderful opportunity to teach

them how it works.

 

At the grocery store:

 

- Talk about weighing fruit and paying based on how much it

weighs. Compare price tags, and discuss how they are

different and why.

 

- Talk about picking produce so that what you buy is the

best value for your money. The child will understand picking

bananas with no brown spots, or choosing broccoli that's

firm.

 

- Let your child help you hold the coupons, and explain to

him how they help you save money. He can also help you keep

them sorted. (Well, maybe.)

 

If you choose to give your child an allowance:

 

- A good age to start this would be around 5 or 6 years old.

You can even draw up a budget for your child so that he

knows exactly what to do with the money and why. Three piggy

banks or cups might be a good start, and he can place 1/3 of

his allowance in each container. In this example, he might

use one for spending, one for saving, and one for charity or

helping someone in need.

 

- You may or may not want to pay extra for extra tasks done

around the house. Whatever your stance on this is, you should

have that determined and stick to the plan so that your child

knows what to expect.

 

- Consider starting a Family 401K program. For example, the

child gives you " x " amount of money back from his allowance,

and you double it for him. This teaches the value of saving,

and it uses a real-world money management system. It also

incorporates delayed gratification and self-discipline - two

hard lessons to teach!

 

Have your child sit with you some evening while you pay

bills. Here again, you may be surprised at the degree to

which he grasps what you're doing. Explain how the checkbook

represents your bank account, and every check you write

depletes that account by the amount on the check. He'll

learn a few things from this: Organized record-keeping,

a little math, and how money changes hands for goods

and services received.

 

The road to good money management can be gratifying for you

and your kids, and I bet when they're older, they will thank

you for taking the time with them now!

 

 

--

Diana Gonzalez

 

 

 

 

Nothing wastes more energy than worrying - the longer a problem is

carried, the heavier it gets. Don't take things too seriously - live a

life of serenity, not a life of regrets.

-Unknown