Weekly Family Finance Picks (#10)

“Guest blogger” and FamZoo summer intern Haley Dwight is headed back to college soon, so her weekly summer posts have come to an end - sniff, sniff! Haley’s family finance picks-of-the-week have been very helpful and popular though, so we’ve decided to do our best to keep the tradition alive in her absence.

Here are our four favorite family finance articles culled from around the Internet last week:

Money Matters: How to Make Allowances Work
by Marie Hartwell-Walker, ED.D.
on PsychCentral

Marie makes a solid case for why an allowance (when delivered intelligently) is a very effective tool for teaching kids how to manage money well. She bolsters her case with 9 tips for making an allowance work based on input from participants in her parent study groups. Note the emphasis placed on enumerating expenses, making simple budgets, remaining unemotional, avoiding lectures, and letting children make (and learn from) mistakes.

Advice for Parents as Their Kids Head Back to School
by Janet Bodnar
on NASDAQ.com

The transition back to school provides prime opportunities for parents to share financial teachable moments with their children. Janet provides excellent examples and suggestions broken down by age group: elementary, middle-school, high school, and college. One of my favorites: Would your college-age child join a fraternity or sorority if they had to pick up the fees? Half the fees? Hmmm...

Q and A About Kids and Money
on MoneyBunny.com

This article provides a concise Q & A for parents who want to start teaching their kids good money habits. It’s part of a larger site put together by the nonprofit Money Management International "to give kids a fun, interactive way to learn about money management." It looks like the interactive content is geared primarily towards the younger end of the age spectrum. If you have youngsters, check out the stories “Money Bunnies Take a Vacation” and “Brownie Wants a New Bike” on their video page.

5 Crucial Tips for Raising Money-Smart Kids
by Jean Chatzky
on USA Weekend

Jean Chatzky, the financial editor for NBC’s Today and author of "Not Your Parents’ Money Book: Making, Saving and Spending Your Own Money", shares her top 5 tips for parents who want to teach their kids the critical life skill of basic money management.

I like Jean’s advice on matching an allowance amount to a set of explicit expectations about what your kids need to purchase — i.e., a budget-based allowance. This makes an allowance less arbitrary and a mechanism for learning to control spending; otherwise, it becomes just a handout for arbitrary purchases. We’ve had really good learning experiences with giving our teenagers clothing allowances — they submit a budget to us, we agree on it (after revisions if necessary), and we give them an allowance equal to the budget. Then, we step back and let them manage their spending through the year. When it’s gone, it’s gone. There’s virtually no complaining or nagging, and they appreciate the responsibility and freedom.