Jun 01 2008

Managing Finances continue…

Published by dodo at 1:51 am under Baby, Books, Children, Family, Gift, Kid, Mommy, Parenting

Teach children to share their resources. As you provide money for your children, teach them the rewards of giving to others. Talk to them about the importance of giving back to God (who, don’t forget, owns everything) by contributing regularly to church and other ministries. Encourage them by your own example.

Teach children to save. Even during the preschool years, it’s not too early to teach your child to save for the future. As she gets older, she can also learn “the magic of compounding”—how money accumulates over time when left in an account that earns interest.

When your child becomes an adolescent, in addition to continuing the above principles, you need to begin preparing her to earn a living and releasing her from your financial supply line. Consider working on these preparations for greater financial responsibility:

Kids

Teach your teenager the principles of budgeting.

This will be important whether her future income is modest or abundant. Beginning at sixteen or seventeen, your adolescent should be allowed to make most of her own financial decisions. You may choose to provide her with a monthly allowance to be budgeted among several items such as clothing, toiletries, and other personal supplies you used to buy. Help her set up a budget, but she must also be given the freedom to fail—and in the process learn valuable lessons. For example, if she blows her entire clothing budget in the first six months of the year, she will have to forgo desirable purchases later on. Allocating cash between basic necessities, entertainment, savings, and giving to church and other worthy causes is a concept most teens do not understand without some guidance. But if you teach your child budgeting principles now, she‘ll benefit for a lifetime.

Checking account.Your adolescent should be given the opportunity to use and maintain her own checking account under your supervision. It is vitally important that you teach an older teenager how to balance a checkbook monthly. Many parents obtain a credit card (with a very modest spending limit) for an older child—perhaps in the senior year of high school—to train her to use it properly. Two warnings she must receive: (1) Never buy anything with a card that she would not have purchased with cash, and (2) pay off the total amount on the credit card each month without fail.

Personal expenses and bargain hunting. Your adolescent, whether living at home or away at college, should begin to deal with the amazing ability of “miscellaneous expenses” to derail her budget. Teach her to use self-control in her spending through your example. Show her where to shop and help her learn to seek the best values for her limited supply of dollars.

When you pay your children for work

Be clear about what you want done, and what you are offering. Also, be sure to let your child know if there is a time frame involved (”I need this done by four o’clock”).

Make sure that your child is capable of accomplishing the task. If you tend to be a perfectionist, becareful that the standards you set for the work you want done aren’t beyond your child’s reach. On the other hand, don’t make the mistake of lowering your expectations if your child is in fact capable ofperforming the task.

When possible, give your child some “on the job training.” Your child may be more open to learn how to use tools properly, for example, if the job helps earn money to buy something she wants.

Pay only for jobs that are completed. Remind your children that you as a parent aren’t paid a salary unless you go to work every day, work all day, and perform your duties completely.

Pay for quality work. If your child didn’t do his best, you’re only penalizing him by paying for laziness. Teach your child to strive to do a job right the first time.

Pay fairly within your budget, but don’t overpay merely because you can afford it. Even if you have a bountiful income, it doesn’t make sense to payyour child fifty dollars for taking out the trash or doing the dishes. This only sets unrealistic expectations for the future. Pay according to the job description.

Reward extra effort. If your child goes out of her way to do an outstanding job, reward her both emotionally and financially.

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