lemon-standEver wonder how to help your kids learn smart money habits – especially during the summer break?  I recently shared top 5 tips for a special financial literacy insert with USA Today.  Here is the link to the article:  Money Matters: 5 Lessons to Teach Your Kids This Summer.

But I thought I would expand on these tips and share some examples of how our family personally applied them as well:

1.  Teach choice. Introduce the four choices for money (Save, Spend, Donate and Invest) to your child using a divided bank or jars. Teach them that there is more to do with money than just spend. Present opportunities to make choices with their money as well.

When my youngest, Amanda, was in junior high school, she wanted to do everything. Every sport. With each came a price tag. I was often anxious about saying no – would I be depriving the world of a future Olympian? – but was also anxious about the cost of these forays into athletics. As any parent of an aspiring athlete knows, sports are expensive.

Months into tennis lessons I told my daughter that this first round of sessions was coming to an end, and we needed to decide if we were going to sign on for another set. I advised her that we would pay for half of the next set, and she would be required to use her own money (birthday, holiday savings) to pay for the rest. “I think I will pass mom.” she said. Huh? “I don’t really like the lessons anyway.” Ugh.

Until that moment I did not know — maybe even she did not know — the value (or lack of value) of these lessons in her life. As a kid, time is not really the issue. But money? That’s another thing. And her money? Another thing altogether.

So, set up the scenario early in high school that alerts your child to the money responsibilities they will have when they go off to college. Maybe it’s more than just living expenses. Maybe it’s books as well. Maybe it’s even all or part of the tuition. Whatever the circumstances, give your kids an early warning so they can stop, think and reflect and have time to develop a plan.

Advise them too late and you will have nothing but resentment. Advise them early enough and they will not balk. And soon you will hear the halleluiah chorus when they explain to you how they made a “choice”.


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Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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