Apr 16, 2015
Teaching Financial Responsibility in the Home
WHAT DOES ECONOMIC NECESSITY – MONEY –
HAVE TO DO WITH SPIRITUAL LIFE?
Paper 100:1.4 The Urantia Book
“Children are permanently impressed only by the loyalties of their adult associates; precept or even example is not lastingly influential. Loyal persons are growing persons, and growth is an impressive and inspiring reality.”
WHAT ARE THESE LOYALTIES?
Paper 196:0.7 Speaking of Jesus in
“Personal faith, spiritual hope, and moral devotion were always correlated in a matchless religious unity of harmonious association with the keen realization of the reality and sacredness of all human loyalties – personal honor, family love, religious obligation, social duty, and economic necessity.”
This is an important list, for these loyalties are what children respond to in the long run. Although “economic necessity” is obvious for being a responsible adult, it may not be on a parental list as a factor in living a balanced spiritual life. “The number one problem in today’s generation and economy is the lack of financial literacy.” Alan Greenspan
We as adults and parents know the importance of money and money management. Many of us had to learn the hard way. In some families money is not to be talked about, especially the parental realm of money. In order to teach the importance of economic necessity, parents must be aware of how this loyalty of “economic necessity” works in their life.
WHEN TO BRING MONEY CONCRETELY INTO THE PICTURE
Kids are drawn to money. It is concrete, but some parents tend to keep it in a mysterious realm, losing the teachable moments when they are with us in our homes. A framework for financial literacy, which will guide them their whole lives, can be built on a few simple premises.
- Must be relevant to the child;
- They can learn the difference between needs, wants, and wishes;
- Use teachable moments – when they WANT something;
- Money should not be used to change behavior. Do not use money for reward or punishment.
- Be truthful and to the point:
- If asked: “Why do you get to buy things you want and I don’t?” You might say: “I go to work and earn my money. I save it for things I want or need. You can earn money too.”
- In a store when a child asks/begs for something instead of saying: “I can’t afford it”, you can say: I do not choose to spend my money on candy.” Or, “It is not in my budget.”
“Children need to have the world of financial choices made real to them as early as possible”. says Paula Hogan, a financial planner at Hogan Financial Management in Milwaukee. “They need hands-on-learning experiences at the earliest possible age.” As soon as they can count, introduce them to money.
SUGGESTIONS FOR CHILDREN 3 – 5 YEARS
- Some child development professionals suggest that by the time a child enters Kindergarten – 4 or 5 years, they know the difference between a penny, a nickel, a dime, and a quarter. And they learn this best by handling REAL MONEY. This may depend on the child’s interest in money, which they may not have until they want something.
- After listening to a musician play a piece on the street, give your child a quarter to put in the basket or hat.
- Let them put a quarter into the parking meter.
- When a trip to the store is planned with a child of 3 – 5 years old, the child can take 25 cents from a “piggy bank” and at the store could choose how to spend it (with parental guidance).
- Here is what I am doing with my granddaughter (5 years) She thought money came from a machine and you had to have a card to get money. NO CONNECTION WITH THE BASIS OF MONEY AT ALL. At Christmas season she wanted to buy things, not for herself but for her sister. As soon as she could count to 100, I began to talk in terms of 100 pennies = $1.00. I put 100 pennies in a baggie which was a lot and rather heavy; when she wanted a bigger stuffed animal I told her it would cost 3000 pennies – 30 bags like the one she was holding. She can’t count that high, but she knew it was a lot and would be a lot to carry, so she found a little thing that fit into our expenditure budget for that trip which was 100 pennies or $1.00.
SUGGESTIONS FOR KIDS 6 – 9 YEARS
- Start an allowance
- Recommended amount – half the child’s age
- Decide if an allowance should be quid pro quo for doing chores. Should chores should be done because a child is a member of a family? OR should allowance be connected to doing chores?
- From the beginning set the foundation that allowance is to be used in three ways which teaches budgeting
Sharing, Saving, Spending – the “jar system” – allowance divided by putting coins into each jar when allowance is given. Check out Money Savvy Pig to help manage the allowance.
- If they can’t afford something they want from the allowance you give them suggest they can earn more by doing extra chores.
- Make use of money as an everyday experience. Give him $2 when grocery shopping and have him choose which fruit to buy.
- Show how to set goals for a desired item and save for it.
- Allow them to make decisions about how to spend money and to make mistakes.
SUGGESTIONS FOR PRE-TEEN AND TEEN YEARS
- Contribute to a savings account by matching or paying interest
- Open a bank account and have them get a personal debit card so they can learn how to balance a checkbook.
- Let them know which expenses you will pay for and which you expect them to pay for.
- Include kids in bill paying sessions – Show that you have a conscious plan for your money. Using a stack of Monopoly money show how much you earn and how much is spent on food, mortgage, car payments, savings, etc.
- Stick to cash – learning how to manage hard currency should come before the plastic. James Roberts, a marketing professor at Baylor University, found that young people who use credit cards are “less price-sensitive, spend more, and overestimate their available wealth compared to those who write checks and use cash”.
- Give a set amount for school year clothes
- Encourage an entrepreneurial spirit – if they need more money for something they want, they can find a job around the home and make an offer. You can hire them if their job meets a need and the price is right.
- Show how to evaluate adds for products by comparing, checking for quality, and truthfulness.
- Discuss what’s happening with local and national economies.
TOOLS FOR FURTHER EXPLORATION
Piggy Bank to Credit Card – Linda Barbanel
Kid’s Allowance Book – Amy Nathan – 8 – 14 yr.
The Generation Y Money Book – Don Silver -older kids
How to Raise Money-Smart Kids – Lewin and Ryan
Raising Financially Fit Kids – Joline Godfrey
Family Penny (There are many more)
Zillions -An online magazine – Consumer Reports
www.lifeadvice.com – Metropolitan Life
www.FamilyEducation.com – National PTA
How you use your money shows your values. It teaches character development through planning, patience and philanthropy.
AND IT CAN BE A FUN FAMILY AFFAIR!
Compiled by Sara Blackstock
April 14, 2015