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.
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