GRAND RAPIDS, MI -- It's never too early to begin teaching
your kids about the value of money. But where do you begin
- especially if your own money-saving habits haven't been
the best. Following are some tips to help you get your
children started.
1) Provide an allowance. Age six or seven is a common
starting point. Before receiving an allowance, kids should:
be able to count, add and subtract, be familiar with the
different coins and bills, show an interest in money or
spending.
2) Set an example. Show your child how you've created your
household budget and involve your child in shopping. Create
a shopping list together - then stick to it.
3) Teach children to comparison shop. Go online to research
prices at different stores. Instruct kids to keep receipts
so defective items may be returned.
4) Limit TV time. The constant messages buy, buy, buy
everything from fast food to toys can take a toll on a
parent - and a child's - wallet.
5) Take a trip to your local bank or credit union. Even
five-year-olds can benefit by opening their own savings
account.
6) Make teens responsible. By buying some of their own
clothes and other necessities, teens may better appreciate
how much things cost.
7) Set short-term goals. Five- or six-year-olds might save
for a five-dollar toy that they can get in just two or
three weeks, while 10-year-olds might save for a
larger-cost item over several months. When kids feel the
power of delayed gratification, it teaches them that they
can set meaningful goals.
Use the 10 - 30 - 30 - 30 "Percent System"
Many financial professionals recommend using the "10
percent - 30 percent - 30 percent - 30 percent" system to
help your child split up any money he or she earns or
receives. Show your child how to divide the money and put
it in four separate jars. Here's how it works:
1) 10 percent Charity - Take 10 percent off the top to
share.
2) 30 percent Quick Cash - Use this 30 percent for instant
gratification.
3) 30 percent Medium-term Savings - Save this 30 percent
for 1-6 months to purchase something special.
4) 30 percent Long-term Savings - Use this 30 percent for
important things in the future, such as a college fund.
Giving Back While some families tithe or require their kids
to set aside part of their allowance for charitable giving,
other activities can also make an impact on children. Here
are some suggestions to help teach kids the value of giving
back.
1) Designate a container in which your children can deposit
their loose change. When the jar is full, they can donate
the money to a charity.
2) Ask your kids to help choose a gift for a holiday toy
drive.
3) Have your kids round up clothes they've outgrown or toys
they no longer play with. Take them with you when you
donate the items to the Goodwill or Salvation Army.
4) Remember that charity involves gifts of time as well as
money. Encourage your children to offer their services
(without pay) to help the elderly or water plants and feed
pets for vacationing neighbors.
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In 1999 Daniel Wansten founded Professional Education
Services as one of the nations leading authorities on
solving cash flow problems for families. Daniel has been
seen on TV 13 news and featured in several newspapers and
magazines. For free help on paying the college bill go to
our website http://www.HowToAffordCollege.com and for free
help with rollovers or other financial planning please
contact our office at 866-949-7935.
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