This is entry #6 in a weekly summer series by "guest blogger" and FamZoo summer intern Haley Dwight.
My top three family finance picks for this week are:
This article covers four tips for teaching children financial skills:
- use allowance wisely,
- teach kids about savings,
- discuss consumption and purchasing, and
- talk about salary and credit.
The focus is on the financial crisis of 2007 and how each of these suggestions can help prevent a similar crisis in future generations.
I like the commentary on using allowances wisely. I like the specific suggestion of depositing your child’s allowance in a bank account (FamZoo accounts work too!) instead of just doling out cash directly. Children are much more likely to run around spending their cash when they don’t have to go through the extra step of withdrawing it from an account.
When I babysat in my early teen years, I would put at least half of my earnings in FamZoo instead of keeping all the money in cash. I avoided quite a few unnecessary Starbucks trips that way! :)
Lessons on Teaching Kids About Money by Renee McGruder for Money Management International
Renee also mentions the volatile economy as a reason to start teaching children financial skills early. She cites a survey by T. Rowe Price that found 48 percent of parents say they’re having more discussions with their children about money, saving, and spending this year than they did a year ago.
Renee’s top tips to teach kids money management are:
- turn grocery shopping into a teachable moment,
- always shop with a list to avoid impulse buys,
- give children an allowance,
- help your child open a small business, and
- open a checkings/savings account for your child.
If your child isn’t quite ready for that last one, a FamZoo virtual account might be just the thing!
Getting your child started with their own small business allows them to make money outside of their allowance (or instead of one). The experience gives them more chances to practice smart money management as well as the opportunity to develop entrepreneurial skills. My younger brother decided to start selling T-shirts with his own cartoons on them. He learned the many steps of starting your own small business and was rewarded with his first ever paycheck at age 11. Nice!
Children Need Personal Financial Education by SurePath Financial Solutions for the Thousand Oaks Acorn
Need a wake-up call about your own spending habits? According to a study cited in the article, 24% of respondents gave themselves a C, D or F grade on their knowledge of financial literacy and 41% said they learned their financial skills from their parents or at home.
This article is brutally honest about what some parents are doing to ruin their children’s perception of finances. You can try to teach your children how to be financially smart, but none of that matters if they see Mom and Dad blowing their money on unnecessary items or evading credit-card payments! Some of the major questions parents should be asking themselves include:
- Is saving emphasized?
- Are late notices arriving because the family bill-payer forgot to pay?
- Are there ongoing arguments over money?
- Are the parents generous givers?
Parents need to evaluate their own poor money habits before Junior picks up on them! Sometimes kids are more perceptive than you think.