When Tyler announced recently that “we’re not poor”, I realized that perhaps it was time to start teaching him the value of money. At first I couldn’t understand why he would say such a thing, then I realized that in his mind we’re not poor. He also mentioned that “poor people don’t have money”. Because he basically gets what he wants he assumes we have money. No attempts to persuade him otherwise has worked so, actions speak louder than words, as they say. So for 2007 I’ve made a resolution to teach Tyler that although we’re not as poor as some people, we definitely don’t have money to burn. I decided it’s high time that he starts learning how to manage his money. I found ten tips online from the Phoenix Home Life Mutual Insurance Company. They are old (from 1997, before I even became a mother!) but I liked them so I’ll share the five I liked best with you.
(1) Give your child an allowance each week on the same day of the week. Remind them that once their allowance money is spent, you will not give them any more money until the following pay day. This is a great way to teach your kids how to plan how and when to spend their money. If they choose to spend it all at one time– oh well…
(2) Encourage your kids to divide their allowance into three parts: spending money, short-term saving and long-term saving. You can put the spending money in a piggy bank or jar, the long-term savings in an investment fund and the short-term savings in a bank savings account.
(3) One way to help your kids resist the urge to spend their money is to have them leave it at home when they go shopping with you. This eliminates impulse buying. If they see something they want and they have enough money to purchase it, they can always return on another day to get it. It’s also a great way to plan for further purchases. If they see something they want and can’t afford, at least they will know how much they have to save in order to purchase it.
(4) Teach your kids about comparison shopping the next time you need to make a large purchase by letting them help compare the cost of the item at several different stores.
(5) For younger kids, match their short-term savings. If you give them $5 a week, for example, and they agree to save $1, give them $1 toward their savings. When your kids get older. Open an individual retirement account (IRA) with the stipulation that they have to contribute a certain amount of money each year until they reach adulthood.