Dollar$ & $ense - Brought to You By Exford & Exford

Do Your Kids Think Money Grows On Trees?

Summer is a great time to help your children learn to appreciate the value of a dollar!

Every day young children and teens are the target of media and marketing gurus in hopes of making them insatiable consumers. Unfortunately, their bullseye aim is pretty accurate! You need to talk to your children and prepare them to be smart consumers.

Most schools do not include financial education as part of their curriculum or only touch on it very briefly. And, even the rare school that does currently carry the curriculum may be facing budget shortages or cutbacks that will eliminate the programs. YOU are your child’s main teacher of financial matters and financial responsibility. The vast majority of high school students only know about finances what they learned from their parents and not by formal teaching or intentional conversations; it was merely by observing how their parents earned, spent, worried, failed to worry or talked about money.

Being financially responsible means different things to different people but it seems universal that we all want our children to:

• have a quality of life at least equal to or better than our own
• have the tools to make sound financial decisions
• be able to take pride in the achievements that their independent financial responsibility gained them.

Pre-school to high school ‘the allowance’ can provide some very valuable experiences and hands on training if handled correctly. Summer presents many spending opportunities such as trips, farmers markets, fairs, garage sales, ice cream trucks, and more. So…it’s an opportune time for a lesson in money management.

First, set the rules and expectations and then be sure that not only your children follow the guidelines but you as the parent! Regardless of age or the dollar amount, where money is involved emotions will creep in! How you as a parent handle the ups and downs of the experience is just as important, if not more, than the child’s actions and reactions.

Listen carefully, ask questions, discuss issues and problems that occur as well as possible solutions (even if only for future use) BUT, be consistent. The ultimate goal is to help them learn to manage money and anyone who does so responsibly knows they didn’t get there without a few painful lessons! Your children will someday appreciate the opportunity they had to experience the ‘painful lesson’ of overspending or remorseful spending or not being repaid by a friend as a child, rather than as an adult. They will surely understand, that although it didn’t seem so at the time, the consequences were minor but the knowledge gained was hopefully large.

Use the following questions and tips to help you set up a solid plan:

1. Will the money have to be earned or given without expectation? If earned, set the chores or expectations clearly, the value of extra work and the consequences of failing to complete duties.
2. What day/time is the allowance distributed? Ex. Friday after 3pm or Saturday after 9am.
3. What expenses is the allowance expected to cover that you will not?
4. Set the allowance within your own income limits and budget. Review any special circumstances in which you may need to alter the amount or stop giving any allowance.
5. Do you expect them to save any portion of the allowance or to give or donate?
6. Are their restrictions on the money?
7. Are their raises?
8. Are their advances and if so is there a ‘fee’ or ‘interest’ charge?

As the parents of seven kids, some being good money managers and some who are still learning their lesson the hard way, combined with some excellent negotiators and some talented beggars, some hard workers and some not so motivated souls; we wish you the best of luck and the most of fun! Hang on for the ride…