January has been designated National Financial Wellness month in the U.S. It’s a good time for parents to make resolutions that are achievable for themselves but it can also serve as teachable moments for children. The average adult will make thousands of financial decisions during the next year, including many which will be made with kids watching or listening.
“Parents need to do something totally different when it comes to their children learning the basic principles surrounding personal finance. I believe we are way beyond the point when stressing the use of piggy banks
and comic books as the tools to learn about managing money is a good idea. We live in a world which uses terms like ‘Bitcoin’ and ‘Cashless Society’, yet as parents we expect our children to fend for themselves or learn with antiquated methods using nickles, dimes and bills stuffed in a plastic pig!” says Greg Murset, CEO of MyJobChart.com a free, easy to use, online and mobile job chart and reward system designed to teach, organize and motivate kids to earn, save, share and spend responsibly. “Help your child be financially smart by teaching them in more relevant ways and reinforcing working for what they want, saving for the future, spending wisely and donating money when they can to help others.”
To help move your children in the right direction in 2014, Murset offer the following out of the box suggestions:
1. No More Hand Outs. Start the year off right by deciding that you are not going to just shell out money to your kids anymore. When they come to looking for money, let them know that they will have to work for it. The bank is now closed unless they start pulling their weight a little more around the house. Tying work and reward together in some meaningful ways will help them understand responsibility and accountability. It will also help them understand that in real life, no one ever gets money for doing nothing.
2. Smash The Piggy Bank. Piggy Banks are a bad way to teach kids about money. That’s right, take that piggy bank and smash it or throw it away. Long gone are the days when we should be teaching our kids about money by dropping coins into a bank that looks like a pig, jar or favorite sport team mascot. Using banks like these only teach children about money in a manner that isn’t as relevant anymore. Get them a real bank account and teach them how to manage their money though online services. It is far more useful to learn to manage money in a bank rather than a pig.
3. Make Kids Pay… For The Cell Phone, That Is. According to Consumer Reports the average mobile phone user spends about $600 a year. If you do the math, you’re going to be shocked at how much you are going to be shelling out over the years so that your kids can send hundreds of meaningless texts each month to their friends! Kids should pay some, or all of their phone bill each month. This is a perfect opportunity for you to sit down and teach your children about how much things cost, especially things that they seem to think they are entitled to for some reason. This is also a great time to discuss the things that they can do around the house to earn the money to help pay that bill.
4. Play The Match Game. Set up a matching program for your kids. They save a dollar and you match that dollar. Yes, 100% return. Sit down and determine what they would like to save for and then set out to accomplish it together. This is a great opportunity to talk about short term, mid-term and long term goals. When a child learns the power of savings like this at an early age, what do you think will happen when they get their first job and they learn about the 401(k) program that is available?
5. Comic Books To Teach Kids About Money? Now That’s Just Dumb. Last year Visa teamed up with Marvel to put a comic book together to teach kids about personal banking practices. Talk about a square peg in a round hole. They supposedly were going to distribute 150,000 of these square pegs in eight different languages. Why does something as important as personal finance have to be jammed into little white blurbs above super heroes heads in a comic book? Parents should be fighting to get personal finance taught in our schools, this way, comic books can remain fun.
6. Make Them Better Givers. No matter how your children earn their money, make sure they plan to donate a portion of it to a charity of their choice. The average American gives away about 4% of their annual income to charity and perhaps that percentage would increase if the next generation made giving a common practice as soon as they learned how to throw coins into a bucket.
7. Set Goals That Are Meaningful. A start of a new year is a great time to sit down with children and talk goals. Meaningful goals. Help your children put together a plan on working toward and saving for something significant. It could be a bike, musical instrument, laptop computer or go-kart. The more meaningful the item, the harder our kids will work to earn it and they will take care of it.
With these suggestions, hopefully our children will be well equipped to avoid useless spending and learn great habits for the future.