- The
Money Store
- BY RACHEL
WEBB
Did you know
that many children think there is a "Money Store" where
we get more money if we run out? That is what my 4 year old told
me today and I am finding that many children his age also have
that belief regardless of the money wise environment that their
parents think they are raising them in.
There are many
steps that parents can take in teaching their child the basic
concepts involved in saving and spending and the fiscal responsibility
that comes with it.
- ALLOWANCE
& BUDGET
If your child is old enough to say "Buy me this" and
perform small household tasks then they are old enough to have
an allowance. Many experts suggest giving them one dollar equivalent
to their age. However if you have a large family and a low income
household that method could break your budget pretty fast! The
important thing is that you spend time teaching them about long-term
savings. Let them open a savings account and give children the
option of donating 10% or less to charity. In essence...help
them set up a budget!
-
- DELAYED
GRATIFICATION
It is a natural behavior for young children to beg for items
they see in the store and dealing with the "Gimmie"
attitude is part of being a parent. But how a parent reacts to
a child demands can have very long lasting effects on how your
child will look at money. If parents give-in to their child begging
for items then it teaches them to beg. A very simple concept
but everyday you can find parents and grandparents at the grocery
store who should get failing grades in this area. Isn't a constant
pattern of instant gratification what has lead America into their
obsession with credit cards?
Start teaching
principals of delayed gratification early on by helping your
child make a wish list and perhaps offering to match funds when
they reach a certain amount.
Adriane Berg
co-authored the book "The Totally Awesome Money Book For
Kids" and suggested that you can even lend your olderchild
money to reach their goals. She suggests to "charge a small
interest to illustrate the downside of borrowing".
- YOUR SPENDING
ENVIRONMENT
The facts are that our children are influenced by their environment
and that includes how they look at money. If children see their
parents checking the price tag on items prior to purchase or
putting something back because of inflated prices it will have
a positive financial effect on their attitudes. Comparison shopping
has been taught. Each time parents pull out their credit card,
take advantage of the teaching moment to explain how interest,
billing and spending limits work. At the ATM make sure young
children know that the bank was taking care of the money you
got for your allowance.
-
- ACTIVITIES
FOR SMALL CHILDREN
1) As a young child my father and mother organized a family activity
night I will always remember. He cashed his paycheck in small
bills and laid it out on the living room floor. We counted out
the money to pay each bill, and put the money into envelopes
for each budgeted category.
2) Give each
child $2 and assign them a portion of dinner. Assign a drink,
main course, salad, dessert, etc. Then go to the store. Buy,
prepare and serve dinner as a family.
- © Copyright
2001 Rachel Webb
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