Skip the Entitlement- How to Raise Financial Fit Kids Written by Jeanette Pavini

With the state of the economy, schools are having a hard enough time getting in all the basic requirements let alone extra courses in subjects such as personal finance.  In studies over the last several years only 14 percent of teens have taken personal finance classes in school.  These segments will help parents learn what they can do to teach their kids the importance of household finances.

 

Topics to cover:

A) The top five things you can do to increase the odds of raising financially responsible kids are as follows (This is based on a study by The Boys and Girls Clubs of America and the Charles Schwab Foundation).

1. Teach them to manage a savings & checking account

2. Teaching kids how to track spending

3. Teach them the importance of goal setting

4. Using technology and online tools to save money

5. Teaching the steps to creating and maintaining a budget

B) Here are three lessons your kids need to learn before they go off to college. (A survey by The Hartford Financial Services Group found 44% of parents admit to needing more guidance on how to teach their kids about finances)  

1. Avoiding the credit card trap!  (College campuses allow credit card companies to solicit) 2. Teach them how to save on transportation, groceries, and entertainment while away from home.  3. Teach them how to pay themselves first as a savings technique.

C) There are things parents can do to start teaching their children as young as age 3 to help them learn the value of money. For instance, get kids involved with the household budget.  Work the kids into the planning and the executing of the monthly budget. 

D) 69% of parents feel less prepared to talk to their children about investing, financial guidance, and advice than they do about the “birds and the bees.”  There are simple strategies that parents can use to make this discussion easier and the kids more open to asking questions.

E.) The reward system?  Is it smart to reward your kids for doing chores?  Certain chores should be part of the child’s responsibility to the household.  Other chores can be done with an allowance as part of the structure.

F) Prepping your kids for the world of investing! Set up a “pretend 401K” and match it as the kids save.  Have your kids take a percentage of what you save through couponing and invest in stocks of companies they believe in.  Set up a “pay yourself first” system where your kids put money into a savings account before they spend a dime of the money they have earned.