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“One night, my 3-year-old asked me if she could sleep in my bed. I told her no. She said, “That’s not fair! Why does Daddy get to sleep in your bed?” READ MORE
Middle Years (7-12)
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Even though children in the middle years cannot drive themselves to the mall, they sure find ways to spend money. American tweens spend an estimated $40 billion annually on themselves, buying everything from designer-label clothing, video games and electronic gadgets to movie admissions, iPod downloads and treats from Starbucks and Haagen Dazs. It’s no wonder parents face an uphill battle when trying to raise financially literate children in today’s society. Unfortunately, recent surveys of American families have found that increasing numbers of young adults get themselves into debt before the age of 21. It seems that many of today’s children are not learning what it takes to be financially successful. But as the ever-present April 15th tax deadline looms, this may be the perfect time to start teaching your child about money and how to manage it. “The most important thing parents can do for their children is to model good behavior and not let them see you impulse buy,” stresses Diane Mayr, author of “The Every-thing Kids’ Money Book” (Adams Media Corp., 2002). She points out that parents should help educate their children about the thought processes involved in purchasing items. One way to do this is to help them understand the difference between a “want” and a “need” and how to accept delayed gratification. Mayr suggests that parents should tell their children to ask themselves, “Do I REALLY need it?” and to think about what would happen if they don’t buy it. A discussion about this outcome may help the child understand how to be responsible with money. Another way to help your children understand the value of money is to let them make money decisions from an early age. The best way to do this is to provide allowances. Says Mayr, “Allowances are beneficial not only because they introduce children to money management, but they also encourage them to plan ahead and help them to understand that actions have consequences.” Mayr believes that the only requirement for a child to receive an allowance is that they have knowledge of money and arithmetic. She adds that how much is given is a decision that has to be made by the individual family. However, she adds that an allowance should not be expected to cover normal living expenses such as their basic wardrobe needs or school supplies. “An allowance should be used to buy things above and beyond the basics.” Many parents grapple over whether chores should be tied to allowance. Again, this is up to the individual family, but the key is to set ground rules before you start dishing out a regular allowance. For example, if you and your child have talked beforehand that he is expected to feed the dog every day, then he knows what is expected. If he does not feed the dog on Monday and Wednesday, he should not receive all of the allowance that week. It is also important for parents to pay what is promised and to pay on time. To help children understand the importance of delayed gratification, parents should teach them how to plan for future needs and wants. Some experts encourage children to use three glass jars: one for spending now; one for short-term savings; and one for long-term savings. The long-term savings jar is used for deposits in a savings or investment account. One child might save for a couple of weeks in order to buy a music CD, whereas another might prefer saving over a longer period of time in order to purchase a more expensive item. I’m currently watching this take place as my teenage daughter saves for an iPod. She has pointed out on more than one occasion that most of her friends have received these gadgets from their parents as either birthday or Christmas gifts. Yes, in her eyes, I might be an unhip and cheap mom for not giving in to her wishes, but I know in a few weeks when she’s finally able to buy her iPod, she’ll feel a sense of accomplishment for setting and achieving her goal. And this life skill is something that cannot be purchased or simply doled out it has to be learned the hard way. Carol Daus is a freelance writer who lives in Huntington Beach with her husband and three children. Teach Financial responsibility • Begin giving your child an allowance around age 7. • Start talking about long-term goals, such as saving for a car, when your child is between 11 and 14. • Open a bank account in your child’s name. • Encourage your child to give to those in need. • Have your child watch you pay bills. (They can even help by putting bills in date due order or by comparing them to last month’s bill.) |
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