By Susan Beacham
It’s always time to talk with your kids about money, but here are the Top 10 signs you shouldn’t wait another minute:
10. Your son says with pride he just signed up for a new cell phone deal: Unlimited monthly minutes for an unlimited monthly fee. Cell phones are the way our kids talk to one another. So, before you hand over the phone, talk about limits. In our house, the girls know the phones are for us to call them and them to call us. Period. Their cell phone voice mail message directs friends to call them at home. We also explained that the “free” phone they use is not a fashion accessory and ring tone choice is limited to what comes free with the phone. Any others are up to them to purchas
9. Your kids roll their eyes when you say “money doesn’t grow on trees!” We all say these things, but our kids take us less seriously when we dilute the real money message with trite phrases like this one.
8. They walk into a store to buy shampoo and walk out with a “must have or will die” CD and no shampoo! Time to talk to your children about making a shopping list to help them prioritize and focus on the important things when they are faced with so many shiny things in the store.
7. Your daughter offers to lend you money from her baby-sitting stash. Truth be told, kids can make a good buck these days baby-sitting. Before they start rolling in cash, teach them that they have four choices for money – not just one: spend. Each time kids come home with cash that they’ve either earned or received as a gift, encourage them to “pay themselves first” by making a deposit into a savings account. Let them put some of the money aside for spending and, if they choose, some for donating and investing. Just a little in each choice each time. Eventually, it will become a habit to think in terms of choice. Furthermore, don’t let your child accumulate large amounts of cash in her room. Keep moving the cash to a savings account where money does grow – not on trees, but as a result of interest.
6. Your son takes a pass on your homemade meatloaf dinner and offers to treat everyone to pizza with his new debit card. Kids must learn the lesson that when money is gone, it’s gone – by dealing with coins and currency. Debit cards provide that “endless” supply feeling to kids – and a lot of adults as well.
5. Your son announces his plans to use his credit card once he runs out of money on his debit card. See No. 6 above.
4. Your child texts her friends for advice on how to pay her text messaging bill. Those little messages can carry a hefty price tag. Last week, as my daughters were “texting” one another while sitting side by side in the van, I decided to check into a monthly plan. Each message was costing Allison 10 cents. Her bill for texting alone came in at more than $50 one month. (How did she have the time to send more than 500 messages?) Now, prices have risen to 15 cents per message. My advice: Check out a monthly unlimited package. Talk with your children about the monthly cost vs. paying per message. Ask them which they would like to pay for.
3. Your son tells you all he wants for his birthday is some money for gambling. The advent of online gambling delivers this “game” right to the computers in our homes. According to a 2005 PBS report, children as young as 10 are gambling online. Make gambling less provocative by teaching children about money. It’s that simple. The children who get hooked and find themselves deeply in debt are online and gambling with credit cards. Teaching your child about money can be the lesson that saves him from making this mistake.
2. You overhear your daughter telling her friends that it was just her luck to get stuck with the “poor dad.” Lucky indeed, for the child who gets a parent who teaches her about money really gets the “best dad.”
1. Your child announces she made $10 million in the stock market simulation game at school, so she’s ready to manage your retirement portfolio. Consider it good news your child is that engaged in learning about investing. Don’t hand over your IRA, but do take that simulated interest into the real world and help your child research and buy one share of stock. You can buy stocks through a low-cost service provider such as www.buyandhold.com or www.scottrade.com.
Susan Beacham is the founder and CEO of Money Savvy Generation (www.MoneySavvyGeneration.com), which creates innovative products and services to help parents, grandparents and educators teach children money management skills. Email her at Susan@MSGen.com.