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 (http://www.simplejoe.com/expensetracker/index2.htm)
is ideal for tracking personal, business, home and club expenses.
