Kids & Purse Strings

This is an interesting piece from Take Care America. Great tips about parenting and money lessons.
Here is the text:

"Purse-String Children: Fostering Financial Independence

Take Charge America Offers Tips on Teaching Your Children How to Make Sound Financial Decisions

"If I want this and give me that are phrases frequently uttered from the mouth of your child, it may be time to cut the purse strings. Fostering financial independence at a young age can pay off big time in the future…literally.

Mike Sullivan, director of education for Take Charge America, a non-profit credit counseling company, says it is important to teach younger children and teenagers the importance of making sound financial decisions at an early age.

“Money management skills are learned by examples that are set from parents, as well as through practice,” Sullivan said. “Helping kids build money management skills can prevent them from falling into debt later in life.”

GENERATION "P" FOR PLASTIC

Visa USA has coined the generation of teens and twenty-somethings now entering the workforce, Generation Plastic, or Gen P. Sullivan points out that this nickname wasn’t earned through shrewd money-saving skills.

“Many people think it is no big deal to purchase frivolous items on credit cards. Reversing this type of thinking pattern will prevent a lot of financial heartache in the future when interest rates and fees start accumulating,” Sullivan said.

TIPS

There are things parents can do now to ensure their children’s financial success in the future:

*Give younger children an allowance and let them learn how to spend it. Keep in mind that an allowance must be earned, not expected. If you have chores that are normally included around the house, do not include those as part of the allowance. Select chores that are considered above and beyond the minimum. If your child does not complete these extra chores, do not automatically give them allowance money. Moreover, do not give your child extra money for personal spending outside his or her allowance. Budgeting money is just as important as earning it.

*Suggest older teens get part-time jobs. Teens are less likely to have a lighthearted attitude toward money once they understand how hard it can be to earn an income. Consider reducing or eliminating allowance at a certain age in order to encourage your teen to get a part-time job.

*Provide extra opportunities to earn money. As your children get older and more capable of taking on work outside their daily chores, offer them the opportunity to make money from projects you would normally pay someone else to do, such as light yard work, or extra cleaning.

*Start a savings account in your child’s name. This will help your child learn the basics of banking and they will be able to watch their account grow, or shrink, depending on how they manage money.

*Take your child shopping. Use this as an opportunity to teach your child how to shop on a budget, take advantage of sales and use coupons. Set a budget before you go, make a list of items that are needed or wanted and help your child prioritize and make decisions.

*Go half-and-half. If your child wants an expensive item, compromise and offer to pay half. This can help a child learn the significance of hard work, while valuing a parent’s earning power.

*Do not use money as a source for rewards or punishments. Money is not something children (or adults) should feel they deserve or are entitled to as a result of behavior. Teaching your child to associate work and money, rather than expectations and money, will help them gain financial independence.

FREE FINANCIAL EDUCATION LESSON PLAN

A new, nationally-renowned financial curriculum, developed at Montana State University and sponsored by Take Charge America, is helping teachers and parents tackle this tricky topic in an entertaining way. The Family Economics and Finance Education (FEFE) lesson plan is free. It can be downloaded at Family Finance

About Take Charge America

Founded in 1987, Take Charge America, Inc. (TCA) is a non-profit 501(c)(3) organization headquartered in Phoenix, AZ. TCA is committed to helping consumers gain control of their finances and offers a variety of services including education, budget and financial counseling, and when necessary, debt management."