In recent years, more states have placed a focus on personal finance education in our nation's schools, but only 13 states require that a personal finance course be taken as a high school graduation requirement according to the <a href="http://www.councilforeconed.org/about/survey2009/" target="_blank"><strong>National Council on Economic Education</strong>.</a> Although that’s up from seven states in 2007, there's still much to be done. <strong>BlackEnterprise.com </strong>and <strong>Ylisa Sanford Seymour</strong>, CFP Senior Financial Advisor at Ameriprise Financial Services Inc., created some tips to help parents instill the value of money in their children and help them grow into fiscally responsible adults.–<em>LaToya Smith</em>
<ul> <li><strong>START EARLY: </strong></li> <li><strong></strong><em>“The earlier you start, the more moneywise children you’ll have,” says Seymour.</em></li> </ul> <ol> <li>As early as age five, use play money like Monopoly so that they understand that purchases require an exchange at a certain value.</li> <li>Show them how to sort coins and teach them their value.</li> <li>Share utility bills to show them the direct impact of their behavior, such as leaving lights on or running water when it’s not in use.</li> <li>Use the grocery store as a learning tool. Make a grocery list and get kids to cut and organize coupons with you, review the weekly store circular for savings.</li> </ol>
<ul> <li><strong>GIVE ALLOWANCES: </strong></li> <li><em>“In order to raise smart money children, you have to instill that there are certain things they need to do as members of the household," says Seymour. "But there are extra things that they can do to earn money.”</em></li> </ul> <ol> <li>Create chores they can do to earn money. For example, making your bed or setting the table are things you do as a contributor to the household, but cleaning out pet cages, raking leaves or doing things that are above and beyond the basics is an opportunity to earn money.</li> <li>Suggested allowance amounts can be figured out using age division (For example: they earn half their age each week. 5/2=$2.50/week) but for older children who are capable or raking leaves, babysitting, cleaning out the gutters, etc. the wage should be based on the work that’s being done.</li> </ol>
<ul> <li><strong>ENCOURAGE SAVINGS: </strong></li> <li><em>“My mother made me save 50 cents, give 25 cents and spend 25 cents," Seymour recalls. "My charitable inclination was equal, but my savings was twice that.” </em></li> </ul> <ol> <li>Open a bank account with your child. Check your local credit unions and regional banks for kids savings programs.</li> <li>Teach them how to fill out deposit forms, make sure they see their passbook being stamped and explain bank statements.</li> <li>Designate a percentage of their earnings for saving, charitable giving and spending. Giving can also include giving an item such as a toy to someone less fortunate for every new toy they get.</li> </ol>
<ul> <li><strong>BE A GOOD EXAMPLE:</strong></li> <li><em>“The biggest inhibitor of children learning about money is parent’s not feeling like they’re comfortable about their own understanding of money and how it works,” says Seymour. </em></li> </ul> <ol> <li>Know your financial situation and sit down with a professional advisor.</li> <li>Ask your advisor for tips on the best way to impart financial information to your children based on their age.</li> <li>Teach your child to budget their money and prioritize their spending. Reinforce that message by not giving your children what Seymour calls “short-term” loans—giving them extra money or using your credit card for purchases they haven’t budgeted for.</li> </ol>
<em><strong>Be sure to also read…</strong></em> <ul> <li><a href="http://www.blackenterprise.com/2010/12/09/5-podcast-to-boost-your-financial-brainpower/"><strong>5 Podcasts to Boost Your Financial Brainpower</strong></a></li> <li><a href="http://www.blackenterprise.com/2010/12/06/7-money-lessons-from-the-bible/"><strong>7 Money Lessons from the Bible</strong></a></li> <li><a href="http://www.blackenterprise.com/2010/10/23/the-7-deadly-sins-of-money-management/"><strong>The 7 Deadly Sins of Money Management</strong></a></li> </ul> <em>How are you teaching your children about money? What age did you start?</em>
http://www.jacobsheritage.doodlekit.com Nathanael Israel
Greetings Sister Latoya. We have a youth magazine almost ready for publishing in may of 2011. I im asking for permission to reprint this blog with slides in print. http://www.jacobsheritage.doodlekit.com
Thanks!
4 Tips for Raising Money-Smart Children
http://www.CompleteDefinitionImage.com Ruth
Thank you for the article. I found some great tips to implement with my children.
http://www.robwilson.tv Rob Wilson
I developed a game called March Money Madness to use sports to help teach people (kids included) about investing. It works just like the bracket for the NCAA tournament, but using stocks. Have your kids sign up now at http://www.marchmoneymadness.net. They will have fun and learn something at the same time.
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