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Sunday, July 14, 2013

Raising Money-Savvy Kids

Raising Money-Savvy Kids By Sandra Kirkland, “U” magazine, The Blade 2001 When I was growing up, my father would tell me I needed to learn to budget. Well, I didn’t know what a budget was, and he didn’t teach me. My mother told me to pay myself first, but I had no clue what she meant, and she never taught me. As it turns out, this was not unusual back then and is not now. According to a recent study conducted by Charles Schwab Company, 53 per cent of all parents surveyed were uncomfortable talking about money to their children, feeling that money was too personal to discuss with them. For all of you parents out there who fall in this group – and those who don’t—Juliette Fairley, author of Money Rules, Personal Finance Strategies for Your 20s and 30s, has good, solid advice to guide you in raising your children to be money-savvy. Interestingly, her advice as to when is the best time to begin teaching your child about money is almost identical to what child psychologists recommend is the best time to begin talking aobut the birds and the bees. “As soon as your child expresses an interest in spending your money,” Juliette says, “is the time to start teachig your child about money.” Teaching the Basics When you’re out shopping and your child asks you to please buy him something, pull out what money you have in your purse or wallet and count it with him. If there isn’t enough money to get what he wants, brainstorm with him ways to come up with extra money: more babysitting, new customers for his paper route, a part-time job. The idea here is to get children thinking about money: how much things cost, what they can do to earn money and the importance of saving. As soon as they begin earning money, guide them through the process of spending and saving, and make it as fun and exciting as possible. Let’s say they have accummulated $100 from a paper route, babysitting or extra chores. Let them decide how they want to use the money by asking them how much they want to save, what they absolutlely must buy now and how much it would cost. If they want to save $75, guide them through the options for savings, such as “Kiddie IRAs,” mutual funds and bank savings accounts. They can become involved in the savings process that will make it a habit. Make Money a Family Event Money impacts every member of your family, so engage your children in your spending plan. Fairley counsels parents to set aside a time when family members can sit down together to go over bills. Show your kids your paychecks and your budget. Explain how you “pay yourself first,” by setting aside an amount for savings. Then, as you go through the bills, have them do the math. At the end, ask them if there is anything left over for those extras. When it comes to money, as in everything else in your children’s lives, you are the role model. Fairley states that you should not use credit cards on a regular basis. “If you don’t use credit cards,” she says, “show your children how you pay them off each month.” Let’s face it. When it comes to money, everything does not go smoothlly all the time. Whatever you do, do not argue about money. Fairley feels that arguing about money teaches children to fear it. If there are money problems, sit down as a family to discuss it. Every member can make a contribution. Parents have all sorts of opportunities to teach their children to be money-savvy and assure their children bright financial futures.

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