Kids and Cash
By Patti Handy, Money Coach for Teens
Today’s kids are tomorrow’s leaders, healers, entrepreneurs and what ever else they desire. Our futures, their futures, remain in our hands… for now. Our schools teach the fundamentals we all know and love; reading, writing, math, science and history. What concerns me is our school system lacks some of the ‘street smart’ skills that kids will need to become those successful leaders, healers and entrepreneurs.
As a parent, we must take time to teach our children ‘money smarts’. Can you imagine how empowered you would feel if your parents taught you how to balance a checkbook, invest in the stock market, manage credit card debt, start a business, or the power of compounding interest? If you were one of the lucky few whose parents did teach you money skills, consider yourself blessed. The present economic situation provides a perfect time to teach our kids the importance of money management and the need to respect money for what it is, and isn’t.
So, where do we start? With the basics. Depending upon your child’s age, you can start with talking about money. Most of us don’t discuss the family’s financial situation at the dinner table. I propose you do. I think it’s important that children understand what happens, good or bad, with the money earned. Don’t get me wrong here; I’m not suggesting you tell your kids your annual income or the balance of your investment portfolio. But I do suggest you bring the kids into conversations regarding ways to save, creative ways to earn additional money and what to spend that money on. Involve them with decisions on vacations, donating to a charity or cause, or how they plan to buy their first car.
For middle schoolers and teens, open a savings account and teach them the importance of monthly deposits, regardless of the amount. Create in them the healthy habit of making that deposit every single month. They have compounding interest and time on their side, and simple, small deposits made regularly add up to huge money later. Did you know that $4 a day, 5 days a week invested at 10% (historically, the average in the stock market) turns into $1.3 Million in 50 years? Tell that to your teen who loves to visit Starbucks or Jamba Juice!
Introduce the concept of a budget, although I don’t care for that word. (Like a diet, it implies I have to give up something). It is about compromise and being aware of where the money goes, so rather, suggest this: what is priority, given the income? Teach them to live within their means and the dangers of credit. If our kids can understand this now and realize the consequences if they don’t, it will make for a peaceful and prosperous future. As parents, we know there isn’t anything we want more in life than to see our children healthy, happy and at peace.
Money Coach and published author, Patti Handy, received her Bachelor’s degree in Accounting, followed by a combined twenty-five years in the banking and mortgage arena. A past holder of the Series 7 and Series 63 licenses, she has most recently served as a Senior Mortgage Advisor for over 7 years. She holds a California Real Estate Brokers License and is a CTA Certified Life Coach. Although she has extensive work experience, she credits the invaluable lessons that her parents taught her at a very young age as the true gift. Understanding the importance of learning money management early, she is passionate about sharing her financial wisdom with teens and young adults so that they too, will be empowered with money smarts. Her newly published book, How to ditch your allowance and be richer than your parents, 9 wealth building tools to make a teen rich, is available now. Visit www.teenscashcoach.com to sign up for a fun, free weekly video series teaching your teens money smarts! Learn more about her DVD program “The Prosperous Teen”™, Ordinary Money Habits create Extraordinary Results, by clicking on the products link at www.teenscashcoach.com.