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Sunday, January 23, 2011

Beyond The Piggy Bank ,Teaching Kids To Manage Money.

Walking through a supermarket my girl spied a sports shirt on sale for $33.00,marked down from $47.00."We'll save $14.00 if we buy this NOW,"she said.She stared at me when I said,"We'll save $33.00 if we don't buy it at all."
Kids absorb lots of messages,values and attitudes from the media and friends.Advertisements whet their appetite for so many things that they don't need.What we ought to do is give them an understanding of the value of money, of 'herds and flocks'.They also sponge up on your example on spending,living,manners and money management.There are compelling reasons to teach them to be money savvy in today's environment and culture.
How do we then teach them?Schools don't teach that.It's up to parents to help their kids into growing up to be responsible,skillful money makers and spenders.The lessons begin now.
  1. Pay them a regular allowance.Then teach them in simple doses how to use it and plan spending.Guide them in the relationship between money and shopping.Be open and frank with them about what amount you can afford to give them now and what you expect them to pay for.Guide them to learn about balancing spending and resources.They don't always have to spend for themselves.If the kids want to forego their allowance to put into a family campfire or road trip for example,let it be.They will learn about togetherness as a family instead of being obsessed on themselves or their needs.
  2. Save then spend.The first step to managing money is setting some aside.Help them set small personal goals.Encourage them to buy small items first before they go on to bigger bills.Keep their goal of what they want to own visible to them.If they see something they want to buy for e.g. cut out the picture and tape it to a piggy jar where they can see their money 'grow'.It's especially important,so they don't blow away their 'fund'.If they show prudence and show effort to save you may want to consider a matching grant.
  3. One more thing though. Too much guidance you end up controlling or mollycoddling them.They don't learn to think for themselves.Remember, the goal here is competence,self reliance and independence. Let them make mistakes.Stay out of their decisions and let them experience the disappointments of a bad buy.What is precious is they learn how to choose,make choices and grow in making good decisions outside your supervision and your bearing down on them.

Today Is The First Day of the Rest of Your Life