Dollars and sense
The sooner you start educating children about money, the brighter their financial future will be. Start with these easy tips and set up your kids for financial success. Even if they're young, you can teach them how to make money, how to save money and how to be a smart shopper.If your child is 3 to 7 years old
At this age, kids begin to understand the mechanics of money: You hand it over and get something in return. Build on their budding knowledge with these tipsAge 3 to 7: money lesson 2
Lay down smart-shopping rules. Start explaining how to save money at the supermarket now, so they can be better buyers later in life.
- Distinguish between wants and needs. Play the “meat and gravy” game. Have your kids guess which items in the cart are “meat” (necessities) and which are “gravy” (fun, nonessential products).
- Try a coupon game. As you move through the aisles, ask your kids to hunt coupons in dispensers attached to shelves. They have fun and learn another way to save money.
- Teach bargain-shopping. For older kids in this age group, give them your list, budget and a calculator. Ask them to compare prices to find the best deals. They should also keep track of the total price of the items in the cart. If your children are successful in staying below the budget, they can use the extra money to treat themselves.
Age 3 to 7: money lesson 3
Start an allowance. Educate children about managing money by allowing them to handle some themselves.- Determine an amount. At age 5, explain to them that you will give them money for chores; experts suggest starting at $1 per week.
- Set saving goals. If your daughter wants a new doll, jot down the amount that she puts aside each day. Once she has enough cash to buy the doll, she’ll see a concrete example of the benefits of saving.
- Teach them to give. Children this age can grasp the importance of giving to charity, and if they start now, financial generosity will become a lifelong habit. Suggest setting aside a portion of your child’s allowance (many experts recommend 10 percent) to give to a charity of his or her choice.
If your child is 8 to 12 years old
- Help preteens put their wants into perspective and grasp the value of money.
Money Lesson 1: Teach trade-offs. Just like some adults, kids can be clueless about how their spending choices affect their wallet. - Reward frugality. Every time your kids bring lunch to school, give them the money they would have spent at the cafeteria. They will start to see how being thrifty can build up savings.
- Enact a spending cap. When it’s time to go shopping for new clothes, tell your preteens they can use only $50 each. They will quickly realize they can have one or two designer duds or more items from a lower-priced brand.
- Up the ante. If kids are ready to manage more, raise their allowance.
- Boost their responsibilities. Make a rule that your children will begin using their own cash for some of their discretionary items, such as video games.
- Let them make mistakes. If they spend their entire allowance going to see a popular movie for the eighth time, then want to buy the DVD, they’re out of luck. They’ll grow from the missteps.
Age 8 to 12: money lesson 3
- Play budget games. Make learning to stick to a limit fun.
- Mold coupon queens and kings. Give kids your grocery list, and ask them to help you clip coupons from the weekly fliers for those items. Offer incentives for finding usable coupons―for example, five deals earns a milk shake on the way home from the store.
- Set an entertainment limit. Enact a monthly cap that fits your income. Ask kids to keep receipts from all their purchases. If they go over, suggest free ways to have fun with pals, like playing basketball in the park.
If your child is 13 to 18 years old
Money Lesson 1: Encourage teens to work. If they make their own money, they will probably take their spending decisions far more seriously.- Find the right job. Let your children’s interests lead the way―for example, suggest that your budding fashionista work at a favorite clothing store after school. If they’re not yet mature enough to work at a business, mowing lawns and walking dogs are good ways to start.
- Provide motivation. If your teens are resistant to getting a job, stop raising their allowance. If they want to buy something extra, they will have to work to get it. Help them come up with a goal―for example, if they want a car, have them earn some or all of the money to purchase it.
Open accounts. Show children how to safeguard their money.
- Visit the bank. Help teens open their own checking and savings accounts so they can monitor what they earn and spend. Tell them how to record expenses in a checkbook.
- Introduce credit cards. Consider getting responsible teens a secured credit card, which builds credit while offering a safety net. Kids deposit money into the account; the amount determines the credit line. That original deposit can be tapped by the card company if teens don’t pay their bills. Research cards at bankrate.com (some impose annual fees and have a high APR). Go over statements together to review spending and any fees.
Save for the long haul. Help teens learn how to plan for the future.
- Sign up for direct deposit. Putting a portion of their paycheck automatically into their savings account can reduce the temptation to spend. Many experts suggest that teens save 10 percent of their earnings.
- Discuss investing basics. Demonstrate the magic of compound interest by showing teens how much they will make in a year if they deposit money in a savings account.
Age 13 to 18: money lesson 4
Teach modern tactics. Use technology to help kids find discounts.- Explain comparison shopping. Tell your children not to ask you for a new item without presenting proof that they have sought out the best price. Ask them to compare online with in-store, hunt for online coupon codes (visit currentcodes.com or retailmenot.com) or printable coupons (go to printable-coupons.blogspot.com).
- Try smart-phone tricks. Is there an iPhone or a BlackBerry in your house? Download free couponing apps such as MobiQpons and Yowza. Your teen can find on-screen coupons and show them to the clerk to redeem.
From Allyou.com/
Posted by Mags
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