Kids & Money

Recent survey results reported in Teacher Talk Magazine find that most parents think it's the responsibility of school teachers to instruct their children on money matters. Parents don't seem to want to talk with their kids about money and some think the topic sensitive enough to label it impolite.

Without guidance kids think it's okay to purchase goods that they can't pay for.  Many 16 year olds have a credit card and 40% buy items at malls without being able to pay for it later.

-94% of kids want to receive financial information and guidance from their parents.

-30% of kids say their parents never discuss money issues with them.

-66% of kids admit they don't know enough about money.

-33% say there is no discussion at home about long-term goals on saving

Homework assignment for parents:

1)  Talk to your pre-teen kids about the household budget. Show them how much electricity, the mortgage, taxes and food costs each month. 

2)  Take your pre-teen to the grocery store.  Show them the value of items and describe how you shop using unit pricing.  Explain how a larger sized item may be pricier than smaller units.

3)  Talk with teens about the benefits of long-term savings.

4)  Help your teen open up a checking account and balance the account together each month.

5)  Assist your teen in opening up a mutual fund. Or, at least show them how you invest for your future.

6)  Discuss money issues openly with your kids to rid them of the idea that money simply grows in your wallet.

Visit American Savings Education Council at http://www.asec.org for topic suggestions when you talk with your children about money matters.

Teaching Teens to Spend Money Safely

With credit cards so easily available, it’s never to early to teach your children about responsible money management. Here are some suggestions:

-Let kids deal with their financial messes. Avoid bailing your teen out of financial difficulties, and help them to find legitimate ways to budget and get out of debt.

-Handle allowance to meet both financial and educational needs. Don’t tie an allowance to chores or discipline. Instead, set the allowance to cover basics, and let kids work for you or others to earn money for other things they want. Give allowance raises, but be firm to deny advanced. It is critical for teens to learn to save for what they want so they won’t be as likely to rely on credit later.

-To teach older children about credit, allow limited borrowing from their savings for bigger purchases, and help them set up a payment schedule, including interest, that they can use to replenish their accounts.

-Get kids involved in investing, even with a little money. Investigate CD’s, mutual funds, and other stock options.

-Involve your kids in your own shopping for consumer goods and financial services. Instead of making mistakes themselves, they’ll be learning along with you in doing comparison shopping, evaluating warranties, analyzing credit terms, and taking time to avoid impulsive purchases.

From website: http://www.cbs.marketwatch.com

Young investors in your Home:

Is there a young investor in your household? Can you convince your teen or young child to start saving money now for retirement?

There are a few avenues to entice them into a consistent savings program:

-Stein Roe Young Investors Fund, at http://www.steinroe.com, permits an  initial $100 minimum investment and $50 per month or $1,000 as the initial investment. Educational literature, geared specifically to your young investors age group, is mailed periodically with statements. Call 1-800-338-2550 for info.

-Anyone can invest in USAA plans. One designed for young investors requires a $250 minimal investment and $20 each month. Call 1-800-322-5482 to get started.

-Kids can join an investment club as an alternative. Visit Better Investing for more information at http://www.better-investing.org.