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Money Management Skills For Kids
Author: Dawn Goldberg
Published: 15 June 2006
I have a confession to make. I had no money skills growing up whatsoever. My
parents lived paycheck to paycheck, and my mother frequently agonized over
how to buy groceries for the week.
Because of our financial situation, there was rarely money for "extras" -
going bowling, vacations, toys, books. Heck, we barely had money for
necessities like clothes. When I was fifteen and old enough to work, I
became responsible for buying my own clothes. As a teenager (and, don't
forget - a girl!), I spent my money on outer clothes: shirts, pants, and the
like. Underwear? Heck no! I wasn't going to spend my money on such a
frivolous item as underwear.
As an adult now, I realize that not only did I not learn the money
management skills I needed, but also that I learned some things I shouldn't
have. Things like underwear aren't important. To this day I still have a
hard time spending money on
underwear and bras (although I recently bought three bras! Yea me! However,
I have to admit that I still didn't like spending $40 apiece on them).
My mother shouldn't have shared quite so much with me; I grew up afraid to
ask for anything that might involve money. It affected me in several ways,
the most significant being that I only applied to two colleges. Since I had
to pay the application fees myself (and working at a drugstore didn't give a
teenager THAT much disposable income), I had a limited budget.
This article isn't supposed to make you feel sorry for me (I'm very happy
where I am today - even with old, ratty bras), but to drive home how
important it is to teach our children good money management skills.
Two years ago we implemented an allowance system for our girls. Once a week
they get the dollar equivalent to 1/2 their age, and that amount is divided
as follows:
- 20% to the charity of their choice
- 40% to savings
- 40% to disposable income.
Charity - Every six months, the girls pick a charity, and they decorate a
jar with a picture of the particular charity. Each week, the charity money
goes Plop! into the jar. So far we've donated to the National Zoo (pandas
for six months and fishing cats for another six months), the National
Disaster Search Dog Foundation, and Red Cross (for Hurricane Katrina
relief). Picking the charity allows them to really think about the
particular organization and their needs, and sometimes they'll donate extra
money to the charity. And we match the donations as well.
Savings - We tell the girls that savings (essentially their piggy banks) are
for long-term, big, important goals. I imagine this to be used for things
like a school trip to Europe, down payment on a first car or house, or extra
money for college. After six months, we count the money and then take it to
the bank to deposit in their very own accounts.
Disposable income - This is for the girls to spend as they will. The first
time they got allowance they spent it all on toy machines, and I had to
almost physically hold my husband back as he tried to stop them. I wanted
them to see what happened when they spent all their money, and feel what it
was like when it was GONE! They've since graduated from that impulse to
spend, spend, spend, and now they very consciously and determinedly save
their disposable income for bigger things (like Barbie dolls or the current
favorite, Sweet Streets. Yes, I have girls!).
We've found that the girls already have a strong understanding of money,
from basic math (how many dimes are in a dollar) to the more complicated
concept of interest (we go over their bank statements for their savings
accounts together).
I'm happy to know that we're establishing a strong foundation for their
money intelligence, and that they'll never shy away from buying underwear.
About the Author:
Dawn Goldberg is a Certified Virtual Assistant, COO of Assist University,
mother, community leader, and former teacher. Her vision is to create a
resource that helps parents find ways to enjoy valuable, constructive time
with their children every day. Contact her at or visit
www.afterschoolsnacks.com.
Copyright 2005 Dawn Goldberg.
Article Source:
http://EzineArticles.com/?expert=Dawn_Goldberg
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