How about the all important-How do you teach kids?

[OhBoyOhBoy]

I have 2 kids, and I have NO idea how to teach them to save and budget and all that other good stuff. No one ever taught me anything about money, until I was about 12 I thought everybody just had money, and lots of it. Which is how my 5 year old thinks now, that I have a never ending supply of cash in my wallet. I have opened a bank acocunt for both kids. And the 5 year old has a piggy bank and puts in any money 'found' around the house. But beyond that I am clueless. What do I say when we go in the store and its "Oh I want this!" and Ooh can I get that, mommy?!" Saying No is easy, but answering that 'Why not' is difficult...

[DHK]

This is about the philosophies about money that you want to teach AND live by.

 

I like Jim Rohn's ideas about how to teach kids about money. www.jimrohn.com.

 

He teaches what to do with the first $1.

 

Never live off of more than .70 of that $1.

 

The remaining .30 is divided into 3 ways:

- charity/tithes 10% - to help those who can't help themselves

- investment for future 10%

- capitalistic endeavors for a profit 10%.

 

You can work out the numbers for yourself and your own individual situation. Work with kids when the amounts are small. It's real easy to flip a dime out of a dollar for charity, but not so easy to give $100k out of a million.

[momto2greatkids]

Give a set amount for allowance (couple dollars a week is fine for a 5yr old). Next time he wants something, have him save up for it. DS(about the same age as yours) learned the hard way. He kept wanting to spend his money on candy and $1 toys. I told him he should save it incase he finds some thing he really wants, but he didn't listen. Then he found a toy he wanted for $7, he didn't have the money for it. He had to wait and save his money for it. After he had enough I took him to buy the toy and they didn't have it any more. Now he saves some and only spends a dollar here and there. If he really wants something and is a little short, or if he's nice and buys something for someone, I find extra jobs for him to do around the house to earn a little extra money. He can also earn more by helping DH. He's learned to save and work extra if he needs more.

Birthday money get split, he gets some to spend how ever he wants, the rest goes in his bank.

Now he's cheap like me! Took him an hour and a half to decide what to buy with his $25 Walmart gift certificate he got for Christmas. Kept asking what the prices were and how much he had left. Wanted to make sure he got the most for his money. Now I just have to work on the other one.

[ofblong]

is a 3 yr old too young to start teachign about $$$? I started a bank account for all 3 of my children and my other 2 love to put $$$ in the piggy bank they find (cause its cool). But like oh boy said they think $$$ grows on trees and is an infinite supply (cept when we tell them we have no $$$ but I dont think he quite understands the concept).

[dieselgirl]

I think you MUST teach kids about credit too. My parents taught me a ton about saving money, not blowing it on anything you saw that you wanted, etc... But they didn't teach me crap about credit, or the importance of my credit report.

This is so messed up that I'm embarassed to admit it, but I was so frugal with my "real money" that when I hit a rough spot, I started letting CC balances ride and keeping money in my checking account for emergencies.

Before I knew it, I was putting all my everday expenses on my 29.90% APR credit card, and keeping cash for emergencies. How directly backward is that?

When money got better, I dug myself out of that hole. Then money got tight, and I did it again. It wasn't till the second time that I was able to identify the faulty logic that got me there. I'm still trying to dig myself out, but it's a slow process.

I'm not sure how, but you've gotta teach kids about credit.

[OhBoyOhBoy]

I think you MUST teach kids about credit too.  My parents taught me a ton about saving money, not blowing it on anything you saw that you wanted, etc...  But they didn't teach me crap about credit, or the importance of my credit report.

This is so messed up that I'm embarassed to admit it, but I was so frugal with my "real money" that when I hit a rough spot, I started letting CC balances ride and keeping money in my checking account for emergencies. 

Before I knew it, I was putting all my everday expenses on my 29.90% APR credit card, and keeping cash for emergencies.  How directly backward is that?

When money got better, I dug myself out of that hole.  Then money got tight, and I did it again.  It wasn't till the second time that I was able to identify the faulty logic that got me there.  I'm still trying to dig myself out, but it's a slow process. 

I'm not sure how, but you've gotta teach kids about credit.

<{POST_SNAPBACK}>

 

Another good one, but I figured money should be first then credit at 15/16

[dieselgirl]

Another good one, but I figured money should be first then credit at 15/16 

<{POST_SNAPBACK}>

 

I would agree, but I do think it would be wise to set a good credit example for your kids when they are younger than that. When I went to the grocery store with my Mom as a kid, she always paid for the groceries and everything else with a credit card. I knew from the time I was old enough to understand that they paid it all off in full to avoid interest. Still, I wish that I'd seen her pay cash most of the time, or carry a "credit card register" like you have in a checkbook to track what she was putting on the card and check it against what was in the bank account. I really think that would have taught me "spending management" as opposed to "money management."

[bretherite]

My son is 15 and has seen me struggle with credit issues for years. I was a single mom when he was young and stupid. He came up to me after my App Spree the other day and told me he was proud of me. That was a mixed feeling. He has learned a lot about what NOT to do by watching me struggle to get my credit turned around. I have explained FICO and what an important thing having a good score is. I showed him my scores a year ago and the denial letters for credit. He saw my scores this weekend and saw the fruits of my labor.

 

He recently opened his first checking account, with it came a Visa check card. It has been hard for him to remember to write it in the register and even harder to have to work an extra 4 hours to pay the OD fee he got. But lesson learned.

 

I have been very honest with him about credit and money. My folks were the worst and I didn't want him to go thru what I did to learn the right way to handle credit.

 

I taught him early about saving. He tithes the church and has about 500 in stock he has purchased thru saving him money. So hopefully I have done something right with him.

[momto2greatkids]

Give a set amount for allowance (couple dollars a week is fine for a 5yr old).  Next time he wants something, have him save up for it.  DS(about the same age as yours) learned the hard way.  He kept wanting to spend his money on candy and $1 toys. I told him he should save it incase he finds some thing he really wants, but he didn't listen. Then he found a toy he wanted for $7, he didn't have the money for it. He had to wait and save his money for it.  After he had enough I took him to buy the toy and they didn't have it any more.  Now he saves some and only spends a dollar here and there.  If he really wants something and is a little short, or if he's nice and buys something for someone, I find extra jobs for him to do around the house to earn a little extra money.  He can also earn more by helping DH.  He's learned to save and work extra if he needs more.

Birthday money get split, he gets some to spend how ever he wants, the rest goes in his bank. 

Now he's cheap like me!  Took him an hour and a half to decide what to buy with his $25 Walmart gift certificate he got for Christmas. Kept asking what the prices were and how much he had left.  Wanted to make sure he got the most for his money.  Now I just have to work on the other one.

<{POST_SNAPBACK}>

 

Just wanted to add a little more.

If DS finds something at the store and he doesn't have his money with him. I will buy it for him and he has to pay me back. I'll ask him how much money he has at home. If he has enough I tell him, after you pay me back you'll only have $? left. He usually decides he doesn't really need the toy. One time he didn't have enough but still wanted it, so I gave him a loan. He had to help DH to earn the money to pay me back. DH paid him and than I gave him a bill. He didn't like it but he paid me back. He hasn't done it since and said he didn't really need the toy and wished he didn't buy it so he could of kept the money from DH. Now he thinks twice before he buys something, and doesn't have bunch of dollar store trinkets in the bottom of his toy box.

 

When my kids get in their early teens I plan on giving them a set amount each week (or month which ever works best at the time). I will help them learn to budget it. I plan on starting out with them having to pay a couple expenses. When they get the hang of it I'll than add more expenses and increase the amount of money to cover those expenses. They'll have to pay school lunch, gas, entertainment, cloths, school activites, etc out of the money they get. They'll learn early how to budget money and save for future expenses. I wish my parents would of done this with me. I moved out not having a clue how to budget and save. I will also tell them how important credit is, how it works, and how easy it is to get it trouble with credit cards(knew nothing about cc when I got my first one). Plan on adding them as an AU to give them a little head start on their credit.

[travelgrl]

I think our children (age 11 and 7) have learned A LOT from us over the past 2 years with regards to money. We went through a BK and really had to cut back on expenses and our tax return this year shows that we made almost 1/2 of what we did last year. They have been through the sacrifices with us- no movies, no eating out, no pizza, no new clothes unless necessary, no extras, etc. When they want something or want to do something that costs money and they ask "WHY?" I simply tell them because we do not have the money.

 

My DD got about $200 for her birthday from her friends. She invited like 20 girls and all of them each gave her $10 so she racked up. She was so excited to go shopping at the mall. She really wanted clothes from LImited Too. So I took her and when she saw that a pair of shorts was going to cost $40 she quickly told me "No wonder you don't shop here Mom! It is too expensive!" So we ended up at Old Navy and Kohl's and she was able to get LOTS of clothes. It kind of made me feel good that she got it.

 

My DS will save his money. He wants an $80 remote control car. He is saving his money that he gets from grandparents and allowance and is so focused on getting that car. He knows we won't buy it for him because it is not in the budget. I have no idea where he got that focus from, but good for him.

 

I think them going through this with us has helped them tremendously understand what is necessary and what is not.

[snowpuppy]

I agree with the allowance advice, your kid's aren't too young to start to learn to manage their money. When my son was about 7 he also had a job taking out an elderly neighbor's trash and helping her bring in groceries from her car. My son is in college now and does pretty well budgeting his money and using his Visa check card.

 

Try not to preach or lecture. I was wrong in this and for years I said things like "we cannot possibly afford this or that". A better reply from me would have been to say "we need to see HOW we can afford this" or when we can afford this. This would better teach them that nothing is impossible, but it may have to be delayed.

 

Decide with your kids what they want to buy before you head to the store. It saves endless arguing when you get there

[Dane]

Disclaimer: I am not a parent. All experiences listed below have been done with my 9 year old neice, Payton. My sis does not care about $$$ ( she is always on the verge of BK/Repo/forclosure) so Payton has become my special project. I am trying to counteract the bad habits. She is also the only grand child so she is spoiled spoiled spolied.

 

Payton LIKES money. The family gave her $1 bills when she used the potty when they were toliet training. She learned quickly that money is something you WANT so do what you can to get it.

 

Since she was 4, twice a year we go through her room. No toy, stuffed animal or peice of clothing is safe. We pull everything she has not played with/used recently and it goes into bags. Instead of just dropping it off at goodwill, we go to the local women's shelter and give her things to those that need it. Payton spends time with the kids living in the home and sees that not everyone has it as good as her. Afterwards, we go to lunch and to the store to buy her something. This last time she asked instead of the store, could we take 3 of the kids at the shelter to chuckie cheeese. YOU BETCHA!

 

She has been hording $$$ in a piggy bank for years...no clue how much is in there so I bought her a really cool bank that has four sections. Just got this at xmas.

 

I bought it here www.msgen.com

 

The four sections are marked: SPEND, SAVE, DONATE, INVEST

We set up a system:

 

SPEND- she can take out at anytime for anything- 7-11, icecream man

 

SAVE- for something short term ( like build a bear)

 

DONATE- this money will be spent to take gifts to her friends at the shelter or trips to chuckie cheese or the gift tree at xmas. Also used to buy goodies to take to the local pet shelters.

 

INVESTE- This money will go into a savings account and is earmarked for a later purchase (like a car) She knows I will MATCH the amount on her birthday when we take it to the bank.

 

She gets a lot of cash of the months- 3 sets of grandparents pay her for good grades ( straight A student) and the toothfairy still comes. I am amazed that the two places she puts most of her money is in the donate and invest side. Last time we counted she had $50 in the invest part....she looked at me and said..."wow, with your half I already have $100 towards a car." The kid is already planning to make me pay big time on her birthday in October.

 

She wanted to go to build a bear last week and it killed her to take the money out of the SAVE section. We got there and when she got up to the register it was $66. She realized that would take all her money so she put two items back and paid $44. Went home with $25 in her pocket and the toy she had saved for.

 

I feel like I am doing a good job with her considering I live three hours away. There is talk about her coming to live with me later on ( her mom has issues) and I know I can really do some good things if I was there full time. I am however saving on my own for her college education.

[HeMissedOut]

Disclaimer: I am not a parent. All experiences listed below have been done with my 9 year old neice, Payton. My sis does not care about $$$ ( she is always on the verge of BK/Repo/forclosure) so Payton has become my special project. I am trying to counteract the bad habits. She is also the only grand child so she is spoiled spoiled spolied. 

 

Payton LIKES money. The family gave her $1 bills when she used the potty when they were toliet training. She learned quickly that money is something you WANT so do what you can to get it.

 

Since she was 4, twice a year we go through her room. No toy, stuffed animal or peice of clothing is safe. We pull everything she has not played with/used recently and it goes into bags. Instead of just dropping it off at goodwill, we go to the local women's shelter and give her things to those that need it. Payton spends time with the kids living in the home and sees that not everyone has it as good as her. Afterwards, we go to lunch and to the store to buy her something. This last time she asked instead of the store, could we take 3 of the kids at the shelter to chuckie cheeese. YOU BETCHA!

 

She has been hording $$$ in a piggy bank for years...no clue how much is in there so I bought her a really cool bank that has four sections. Just got this at xmas.

 

I bought it here  www.msgen.com

 

The four sections are marked: SPEND, SAVE, DONATE, INVEST

We set up a system:

 

SPEND- she can take out at anytime for anything- 7-11, icecream man

 

SAVE- for something short term ( like build a bear)

 

DONATE- this money will be spent to take gifts to her friends at the shelter or trips to chuckie cheese or the gift tree at xmas. Also used to buy goodies to take to the local pet shelters.

 

INVESTE- This money will go into a savings account and is earmarked for a later purchase (like a car) She knows I will MATCH the amount on her birthday when we take it to the bank.

 

She gets a lot of cash of the months- 3 sets of grandparents pay her for good grades ( straight A student) and the toothfairy still comes. I am amazed that the two places she puts most of her money is in the donate and invest side. Last time we counted she had $50 in the invest part....she looked at me and said..."wow, with your half I already have $100 towards a car." The kid is already planning to make me pay big time on her birthday in October.

 

She wanted to go to build a bear last week and it killed her to take the money out of the SAVE section. We got there and when she got up to the register it was $66. She realized that would take all her money so she put two items back and paid $44. Went home with $25 in her pocket and the toy she had saved for.

 

I feel like I am doing a good job with her considering I live three hours away. There is talk about her coming to live with me later on ( her mom has issues) and I know I can really do some good things if I was there full time. I am however saving on my own for her college education.

<{POST_SNAPBACK}>

VERY IMPRESSIVE! Tell me more about this 4 sided piggy bank.

 

My technique is very similar to yours, except my daughter still uses envelopes. I would love to get her a 4 sided bank. So far, she's taken her "investment" money and bought 1 share of McDonald's. She wants to "own" the places she frequents the most. LOL She said she wants a piece of Disney next.

[OhBoyOhBoy]

Oops! Go to the website DANE listed. It is great and has some good material for teaching these good habits. I am ordering 2 banks already. THANKS DANE!

[frenchlover]

I'm in my late 20's and have just now "gotten it". I come from an upper middle class family so money was never a problem-that WAS the problem for me and now I see it. They started me off with an allowance and chores to do when I was 6 but it didn't make sense when I got everything I wanted anyway. I guess my point is to enforce these great ideas all of the time.

 

I'm also pissed that my parents never taught me the importance of having good credit. It's taken me the last year of my life to clean my report. I also make a lot of money and live like a, well, I have a lavish lifestyle and not enough saved.

 

I would teach your kids credit as soon as they are old enough to understand. Get them a 200 credit card with your name on it and let them use it when they're with you-then give them the bill when it comes and make them pay it. Also teach them to pay it off right away because of the interest.

 

I'm also pissed that they didn't teach me the importance of investing and the benefits of inveting in real estate. Don't just make them save money, teach them HOW that money can WORK for them and make them more money!!!