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Be Wise With Money

Teaching Dollars & Sense

Advice for helping tweens & teens learn the value of a dollar

"How come I can't have my own TV?"

"I HAVE to have a new cell phone."

"All my friends are going. Why does it matter how much it costs?"

We've all heard these refrains from kids. As parents, helping children understand how to be wise with money is just as important as teaching them to look both ways before crossing the street. So what can you do to help your tweens and teens learn the value of a dollar?

Put your child to work

Not all parents believe in allowances, but if you do, make your children earn it, says Neale Godfrey, chair of the Children's Financial Network, which teaches financial literacy to youth and their parents.

Godfrey recommends creating a "Job Cards" jar filled with household chores. Your children pick a chore, and once it's completed they earn a preset amount.

Teach share/save/spend

Once your children are earning money, teach them about the three things they can do with it: share it (give it to your church and favorite charity), save it and spend it. Decide what percentage of each dollar to allot to each category. Then make them stick to it. No moving the money!

To help kids stay on track, Thrivent Financial representative Rod Hinrichs teaches a simple technique during the Parents, Teens and Money Matters® workshop he offers at his church in Belleville, Illinois. He encourages teens to write down their commitment to save and put it somewhere visible. This will help them stay focused on their goals, even with the smallest purchases. "It's something as simple as sitting back and thinking, 'Why do I want it?'" says Hinrichs.

Help them save more

Once your children are sharing, saving and spending, have them open their own savings account and set a goal.

"Saving without a goal is like a football game without a touchdown. It's boring," says Susan Beacham, Thrivent member and CEO of Money Savvy Generation, a company whose products teach children basic personal finance.

Model good financial behavior

As a parent, it can be easier to talk to your teens about cleaning their room than about smart money management. Actions speak louder than words though – and this is a perfect place to act. One of the most basic ways is to make the money visible. Use cash whenever you can.

The next time you're in the grocery store, give your children a portion of the grocery list and enough cash to cover the cost. (This means you have to know how much items cost!) Then tell them to get their own cart and pay for the items.

"Ask them to double-check that they've gotten the right change," says Beacham. "They have to visually see that when money is gone, it's gone."

Whether you talk to your kids or not about your spending decisions, your behavior is teaching them a lot. Do you talk about your budget? Do you and your spouse fight about money or stress over the size of the credit card bill? What you do – and don't do – with your money makes an impression.

Share your dreams

Have you been quietly putting aside money to take the kids to Disney World? If so, tell them about it. This will help your children understand the time and effort it takes to save for something big.

And make it fun. Beacham recommends having all family members draw what they are saving for. Maybe your son draws a picture of a bike. You might draw a palm tree on a beach. "Whatever your goal, you need to visualize it," says Beacham. "Then estimate the cost, talk about how you are going to get there and where the money is going to come from."

By sharing your goals, you're helping realize a dream you have for your own children: that they will grow up to be wise about sharing, saving and spending.

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