Friday, March 13, 2009

Talk To Your Children About Money

Tip #90 - Talk To Your Children About Money. You don’t need to sit them down and formally teach them. You can do it through everyday living and by providing examples. Show them how you shop responsibly - by buying things you will actually use, by thinking carefully about purchases, and by comparing prices.

Let your children help you make decisions about purchases – ask them to help you come up with a shopping list of things you need. Let them look at the grocery store sale flyers side by side to see which is offering a better deal on what you want to buy. If your children are older and want to buy something, ask them to shop for the best price on the item either by searching online, by making phone calls, or looking at stores when you are already there.

Give your children an allowance. Some experts say it shouldn’t be tied to chores. Others disagree. Either way, the point is to give your children a set amount of their own money to spend. This will give them experience of spending what they have and learning about how much things cost and how long they have to save up for something. It will teach them delayed gratification when they have no money left and need to wait until the next allowance to buy things again.

Read to your children about money, and spending. There are books for every level. Alexander, Who Used to Be Rich Last Sunday by Judith Viorst is a book about a boy who received a dollar from his grandparents and spent it frivolously. The American Girl Kit book series tells the story of a girl in the middle of the Great Depression whose family may lose their house because her dad lost his job. Kit learns to be resourceful from her aunt and eventually figures it out on her own. The All-Of-A-Kind Family series by Sydney Taylor details a poor, Jewish family from the Lower East Side of New York in the early 1900’s. This book isn’t directly about money, but the family does not have much. Yet the family has lots of good times. Each child gets a penny every Friday and is allowed to do with it what she wants – candy, saving for a doll, etc. Reading it together with your child can bring up many good discussions. There are many other books out there that provide good examples of dealing with money.

Discuss money with your children. Money does not have to be a hush, hush secret. If your child wants to go to an amusement park, it’s okay to say that you don’t have the money to do so. Or give your child choices. An amusement park costs the same as two days at the zoo. Would you rather spend two days this summer at the zoo or one day at the amusement park?

On the other hand, make sure you talk about money at their level. If your spouse is in danger of losing his job, you don’t want to make the child fearful that his home will be taken away. He should understand, however, that you have to cut back because times are tough and we don’t know what tomorrow will bring.

Share stories with your children about when you grew up – what things you did, how you saved for your first car. Children love hearing stories of when their parents were young and it may give them perspective on why you spend the way you do. (Over at Life As Mom, Jessica is discussing a similar topic!)

In Real Life (IRL) – Growing up, my parents spoke about money a little. They weren’t secretive about it, but didn’t tell me exactly how much my dad made either. But if our friends were doing things – like renting a beach home for the summer or buying designer clothes, my parents told us that my dad didn’t make enough to do those things. I had a decent understanding of where we stood in relation to our friends’ families.

I received allowance every week – a few dollars per week, and I was allowed to spend it however I saw fit – toys, candy, etc. I mostly saved it and opened up a passbook account when I was quite young (maybe 5 or 7).

I read lots of books and sympathized with some of the characters. In particular the All-of-A-Kind Family books resonated with me because my grandmother lived in the same era in the same neighborhood and was of similar means – meaning she had very little. I always pictured my grandmother living in a tiny, cramped NYC apartment and marveled at how far my family had come.

I listened to stories from both my mom and dad’s childhoods. Growing up, my mom slept on the living room couch of her parents’ apartment – she didn’t have a room of her own. My dad had his Bar Mitzvah service on a Tuesday and went back to school for the rest of the day. There was no money for a big party or even a small one. I gained perspective from their stories. Everything we had – a 4-bedroom house, money for parties and vacations was much more than they had growing up

My parents told me that my dad worked nights so he could put us through college. Going to college was an opportunity he did not have. I appreciated that my college tuition was paid for, and I used to picture my dad working hard so we could go. I didn’t squander the money he gave me. In fact, I never missed a class in college (unless I was truly sick) because I knew my dad worked so hard to pay for me to attend school – that how could I just “blow off” classes. I also made sure I graduated on time, without having to do extra summer classes because that was money unnecessarily spent.
I’d like to think that my upbringing had a lot to do with how I save and spend my money. However, my siblings spend money very differently than I do. But growing up these are the things that resonated with me and I thought I’d share in hopes that your children will grow up spending their money wisely.

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