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It’s
summertime and the kids are out of school spending money as
fast as you can earn it. Maybe this is a good time to sit
down with your children to down with your children to talk
about the three stages of money: Earning, Saving and Spending. You may not need to spend a lot of time on the last
stage as they have probably already mastered it.
Earning Money
Your teenagers may already work to earn their money, and your
younger children may earn an allowance by doing chores around
the house. Earning money provides them a sense of accomplishment.
Saving Money
After earning money, your children should learn to
save some money from every paycheck or allowance. Introduce your child to your local community banker
and encourage them to open a savings account.
Teach your child the importance of goal-setting when handling
money. It is often easier to save money if you have a long-term
goal, whether it be for a new toy, a new car or saving money
for college.
Spending Money
While your children may know how to spend money, they probably
need some guidance on spending their money wisely.
Teach your children
the importance of spending their money wisely and encourage
them to keep receipts for all of their purchases throughout
the month. At the end of the month, sit down with them and review
the receipts and let them decide if they made wise decisions
in spending their money. They won’t always make wise decisions, but like adults,
they will learn from their mistakes
Whether it is parents feeling guilty because they spend so
much of their time at work, or whether they are trying to
ensure their children’s status among peers, parents are doling
out money more freely than ever.
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Additionally, companies have started catering to their biggest
market—teenagers. A recent report by Equifax showed that American teens
spent $179 billion in 2002. Additionally, nine percent of young adults between
18-23 years of age are delinquent on their credit card balances.
Make financial education a priority in your family. Some parents prefer that their teens carry a credit
or debit card instead of cash.
Before entrusting your teen with one of these cards, make
sure they understand how to use the card wisely. They need to understand surcharge fees, the importance
of paying their credit card bill on time, paying as much as
possible on their account to minimize interest fees and protecting
their card from thieves. It is advisable to put a low credit limit on the card
so that they will not fall too deeply into debt.
The FDIC has an interactive computer-based financial education
program. It is free, easy-to-use and is available in both English
and Spanish translations. This program enables both children and teens to have
a “virtual” experience with a bank. To access the web version of Money Smart®, go to
www.fdic.gov/consumers/
consumer/money
smart/mscbi/mscbi.html.
When talking with your children about money, be sure to include
them in the discussion rather than turning the discussion
into a lecture. Most importantly, let your children feel secure in
knowing they can always come to you for financial advice and
guidance.
CONSUMER TIPS is provided as a public
service by the Missouri Independent Bankers Association
AND
Community Bank of the Ozarks
P.O. Box 43
Sunrise Beach, MO 65079
(573) 374-5245
1-800-927-4314
www.cbobanker.com
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