Youth & Money
Use Real Life To Teach Your Kids
* Calculate the tip in a restaurant. If they are too young for that, let them count the tip or leave it on the table.
* Double check the money you take out of the cash machine by counting it. Ask them to remind you to enter it in your checkbook register when you get home.
* Keep track of what it costs to feed and care for the family pets, or create a budget for a new pet they want.
* Plan a special evening meal within a fixed budget. With your children, plan the menu and shop for the food.
* Clip coupons. One mother lets her child clip coupons and for every one she uses, he gets to keep half the savings!
* Tell them you'll only buy their favorite treats when they are on sale, or if you have a coupon. Show them how to use the sales flyers from the newspapers to hunt for bargains.
* Research prices for something they want by hunting for it on the Internet, or noting prices in a couple of stores.
* Compare prices among the different grades of gasoline at the gasoline pump.
* Make a list before you go shopping, and help you stick to it!
* When they are old enough,
have your child help you balance your checkbook or enter your checks in your checkbook
register when you pay the bills (make sure to double check the math!)
A good resource for understanding advertising tricks
of the trade is the Consumer Reports children's magazine Zillions. Although it's
no longer published, you can view all back issues at www.zillions.org. Especially
fun is the section "food ad tricks" that shows how food is "made up" for advertising.
Vaseline on hamburgers is just one example you'll find there!Teach Them About Compounding: Often called the "Eighth Wonder
of the World," compounding can work for or against you. If you save your money in
an account that earns interest, compounding works for you by allowing you to earn interest upon interest. If you are paying interest to credit card companies and
other lenders, however, it works against you.
Encourage your kids to save, and consider paying
interest on their savings until they are old enough to open an interest-bearing
account at a local bank or credit union.
As your children get a
little older (usually around
age 7-9) they may be ready to learn about the stock market and investing. A fun
way to get them started is to help them buy their first share of stock in a company
whose products they buy. (Visit www.GiveaShare.com) You can also visit websites
that teach investing for kids through games and simulations (see the Resources section).
Finally, you may want to get your child started investing in the stock market, either
by buying stocks or mutual funds. At Sharebuilder.com, for example, they can invest
in an education, retirement, or regular investment account for just $12 a month.
Teach Them About Credit:
If your kids do want to borrow from you, teach them how lending works in the real
world! Charge an interest rate and draw up an agreement. (Visit www.CircleLending.com
to draw up a loan proposal for free.) You can make up payment coupons or use another system to keep track of their payments. Be consistent with it and don't let them
borrow again until they've paid off the first loan! Also be careful about letting
them borrow too frequently, or too far in the future. It's better to try to get
them to save instead.
Avoid borrowing from your children, including from
their savings or the gifts of money they receive from others. If you have trouble
managing your own
expenses, talk with a non-profit credit counseling agency.
It's also a good idea for you to explain to your
children how credit and debit cards work. Obviously, very young children will have
trouble grasping this concept.
They may think that all you need to do to get money
is to go to the cash machine! But as they get older you can explain to them how
you deposit your pay and get money out when you need it. Around age nine or ten,
most kids are ready to open a bank account and use it.
Don't forget to warn your kids about credit card
safety and ways to protect themselves from credit card fraud. Avoid giving them
your passwords or personal identification numbers to your debit or cash cards unless
absolutely necessary.
Encourage Financial Education
Schools are beginning to adopt financial education
programs, and some states have enacted laws requiring financial education in the
schools. Talk with your child's teachers, school administrators or parent teacher
organization about making sure financial education is part of the curriculum. Visit
www.jumpstart.org for resources.
Have Fun!
Here are just a few resources for teaching your
kids about money. Ideally, you'll want to check out these websites with your children.
You both might learn something!
Learn about money and the US Treasury (ages 6 and
under) with Trez the cat: www.ustreas.gov/kids/trez.html
A free savings "passbook" for recording allowances
and savings can be downloaded at www.moonjar.com
The Money Factory offers games and activities to
help kids learn about money (Ages 5 - 13). Visit http://www.moneyfactory.com/kids/start.html.
Planet Orange is an interactive site geared to kids
in 4th - 6th grade. Visit www.PlanetOrange.com
Learn how money and banking work (ages 6-12) at
www.KidsBank.com
Find out about stock market simulation games to
teach your kids to become Wall Street whiz kids (you can play along!) at www.surfnetkids.com/stockmkt.htm
Catchy music and books geared toward helping younger
children develop healthy money habits can be found at www.itsahabit.com
