A child overhears his parents say they don’t have money to purchase something and that child chimes in and says, “You do have money, just use that plastic thing in Mommy’s purse.” As this is a cute story it is so real to so many people. Usually, over 70% of people use credit cards to pay for goods these days!
As your child gets older they start to “get it” but young children don’t know were money comes from and were it goes because they don’t “see” it being exchanged anymore! So how do you fix this. Start showing your statements to your children. Show the bank statement were money is deposited, show the credit card statement were all the “stuff” is being purchased and then show the bank statement again showing you paying for all the stuff you just bought / charged.
Make sure you are incorporating some math skills: Money deposited is a positive number and money paying the credit card is a negitive number. The answer to the math question should be a positive number, if not then you don’t have money to buy it! It’s as easy as that.
Save your coins, Susie Saver
P.S. Email Susie and tell her what you want to learn about at: susan@susiesaverbooks.com
Financial planning lessons are posted two times a month. Next lesson on, “Allowance: When and how Much”
Wednesday, April 28, 2010
Wednesday, April 14, 2010
What Age should you start Teaching your Kids to be savvy about Money and how to do it!
Five years old? Ten? Twenty? Maybe even at birth? Some parents are saying they are still learning themselves and that is ok, we all heard the saying…it’s never to late to start saving. But how early can you start teaching your kids and have them actually comprehend it?
The answer…as early as three years old. Now at three your child won’t know how to add coins up to equal a dollar but they do understand what “money” is. They see you handling money (or a form of money) at the grocery store to “spend” and hopefully sees you go to a bank (or some form of a financial institution) to “save” money such as the money they receive as gifts for their birthday. So the relationship with money has already started at an early age…don’t think it hasn’t. A great way to start engaging your kids and help them become money savvy is to incorporate money decisions with them.
For a three year old you can start “bartering” with them. For example, if they want a new toy suggest they need to give you two old toys to “buy” the new toy. By doing this it helps them understand they need to give up something of value to receive value.
For children in junior high you can now start to teach them to “manage” money. When they get birthday money or start receiving an allowance have them open an account where can they “deposit” those funds. When they want to buy something they are now old enough to calculate and see if they have enough. You can show them how to withdrawal the dollar amount needed to purchase what they want. At this stage your child should understand the importance of saving, either for short or long term goals. Make sure you are helping them manage their money and “plan” accordingly so they can accomplish their short and long term goals. (More on this coming out on the June 1st lesson.)
High-school, time of high fashion (if not already in junior high) and college cost around the corner. They now can legally work and start saving (and spending) a lot more. Hopefully in junior high the “manage” stage has settled in nicely as the foundation for what's to come in the high-school years. Determine with your child the things that they are responsible for and what you are willing to pay for early on such as gas for the car, insurance for the car, high-school dances, dates, and college expenses to name a few. Whatever you decide make sure you stay consistent! These are the last four years you have to make an impact on your child’s finances before they leave for college or move out of the house. By setting these boundaries your child will know how much money they need to set aside and save in order to buy the things they want well in advance of them happening. For example, if you told your child you will only pay for half their car insurance then they know what the bill is and when it is due and how much they need to have in the bank to cover the cost. Sit down with them and continue to help “manage” their account as their income and outcomes (deposits and expenses) become greater.
During high-school start talking about college and what each persons financial expectations are. Research colleges together and work as a team to come up with a plan as how this expense will be paid. College is becoming more and more expensive and kids are taking on a lot of debt once they graduate. Educate your child about this, talk about it, help “manage” these accounts and come up with a solution. (More on lessons to teach a high-school graduate in the July 15th lesson.)
To sum it up, to help your child become financially savvy start early and include them in family decisions (appropriate to their age) to teach real world money examples.
Save your coins, Susie Saver
P.S. Email Susie and tell her what you want to learn about at: susan@susiesaverbooks.com
Financial planning lessons are posted two times a month. Next lesson on, “Todays Electronic Banking systems…do Kids understand it?”
The answer…as early as three years old. Now at three your child won’t know how to add coins up to equal a dollar but they do understand what “money” is. They see you handling money (or a form of money) at the grocery store to “spend” and hopefully sees you go to a bank (or some form of a financial institution) to “save” money such as the money they receive as gifts for their birthday. So the relationship with money has already started at an early age…don’t think it hasn’t. A great way to start engaging your kids and help them become money savvy is to incorporate money decisions with them.
For a three year old you can start “bartering” with them. For example, if they want a new toy suggest they need to give you two old toys to “buy” the new toy. By doing this it helps them understand they need to give up something of value to receive value.
For children in junior high you can now start to teach them to “manage” money. When they get birthday money or start receiving an allowance have them open an account where can they “deposit” those funds. When they want to buy something they are now old enough to calculate and see if they have enough. You can show them how to withdrawal the dollar amount needed to purchase what they want. At this stage your child should understand the importance of saving, either for short or long term goals. Make sure you are helping them manage their money and “plan” accordingly so they can accomplish their short and long term goals. (More on this coming out on the June 1st lesson.)
High-school, time of high fashion (if not already in junior high) and college cost around the corner. They now can legally work and start saving (and spending) a lot more. Hopefully in junior high the “manage” stage has settled in nicely as the foundation for what's to come in the high-school years. Determine with your child the things that they are responsible for and what you are willing to pay for early on such as gas for the car, insurance for the car, high-school dances, dates, and college expenses to name a few. Whatever you decide make sure you stay consistent! These are the last four years you have to make an impact on your child’s finances before they leave for college or move out of the house. By setting these boundaries your child will know how much money they need to set aside and save in order to buy the things they want well in advance of them happening. For example, if you told your child you will only pay for half their car insurance then they know what the bill is and when it is due and how much they need to have in the bank to cover the cost. Sit down with them and continue to help “manage” their account as their income and outcomes (deposits and expenses) become greater.
During high-school start talking about college and what each persons financial expectations are. Research colleges together and work as a team to come up with a plan as how this expense will be paid. College is becoming more and more expensive and kids are taking on a lot of debt once they graduate. Educate your child about this, talk about it, help “manage” these accounts and come up with a solution. (More on lessons to teach a high-school graduate in the July 15th lesson.)
To sum it up, to help your child become financially savvy start early and include them in family decisions (appropriate to their age) to teach real world money examples.
Save your coins, Susie Saver
P.S. Email Susie and tell her what you want to learn about at: susan@susiesaverbooks.com
Financial planning lessons are posted two times a month. Next lesson on, “Todays Electronic Banking systems…do Kids understand it?”
Monday, April 5, 2010
Easter candy Now or Later
Spring is here! The warm weather, hearing the birds sing and seeing my buds starting to pop out of the ground. It also means the Easter Bunny is coming, bringing lots of candy to all the boys and girls, filling up their Easter baskets.
You may be thinking why does the Easter Bunny have anything to do with teaching children about financial planning. Well looking at your child’s behavior during this time can tell you a lot. Such as, is your child a quick spender or future based thinker? Does he or she eat their Easter candy real fast or save it for later? Now, looking at how your child eats their candy isn’t going to answer all your financial planning question, it just helps prove a point. If you watch them and they set some candy aside this shows good behavior and that they are planning for the future. This opens up a great conversation to have on “planning”.
I saw my nephew over the weekend put some of his candy in a bag to take home from his second cousins house. Or he may of just been stealing the other kids candy and hiding it in this bag. Since he is my nephew, let’s say he was saving. Now, take this moment and ask them why they aren’t eating all the candy right now. See what they say and talk to them that saving their candy is similar to savings money so you can spend it later (just like eating the candy later). If you spend all your money now then you won’t have any later.
For those children who just dove right into their Easter baskets. Well, dive right in with them and enjoy the “living in the now”! Then explain the consequences when it is all gone. This is another great way to teach the lesson. But remember to tell the kids, wouldn’t you like some candy later if you had it available? My own two year old daughter was in this group. She ate all the candy she can set her eyes on….I got a lot to teach her.
Save your coins, Susie Saver
P.S. Email Susie and tell her what you want to learn about at: susan@susiesaverbooks.com
Financial planning lessons are posted two times a month. Next lesson on, “What age should you start teaching your kids to be savvy about money and how to do it”.
You may be thinking why does the Easter Bunny have anything to do with teaching children about financial planning. Well looking at your child’s behavior during this time can tell you a lot. Such as, is your child a quick spender or future based thinker? Does he or she eat their Easter candy real fast or save it for later? Now, looking at how your child eats their candy isn’t going to answer all your financial planning question, it just helps prove a point. If you watch them and they set some candy aside this shows good behavior and that they are planning for the future. This opens up a great conversation to have on “planning”.
I saw my nephew over the weekend put some of his candy in a bag to take home from his second cousins house. Or he may of just been stealing the other kids candy and hiding it in this bag. Since he is my nephew, let’s say he was saving. Now, take this moment and ask them why they aren’t eating all the candy right now. See what they say and talk to them that saving their candy is similar to savings money so you can spend it later (just like eating the candy later). If you spend all your money now then you won’t have any later.
For those children who just dove right into their Easter baskets. Well, dive right in with them and enjoy the “living in the now”! Then explain the consequences when it is all gone. This is another great way to teach the lesson. But remember to tell the kids, wouldn’t you like some candy later if you had it available? My own two year old daughter was in this group. She ate all the candy she can set her eyes on….I got a lot to teach her.
Save your coins, Susie Saver
P.S. Email Susie and tell her what you want to learn about at: susan@susiesaverbooks.com
Financial planning lessons are posted two times a month. Next lesson on, “What age should you start teaching your kids to be savvy about money and how to do it”.
Subscribe to:
Posts (Atom)