Kids always seem to be asking their parents for money. Whether it's an increase in their allowance, money to buy the latest tech toy or a cool outfit for the first day back to school, one thing's for sure -- they want it. And the older they get, the more they want.
By the time kids reach their teens, they're spending an average of $84 per week of their own and their parents' money, according to a study by Teenage Research Unlimited, Northbrook, Ill. Additional statistics show that the average household spends $550 per child on back-to-school shopping.
With youth spending on the rise, when is it appropriate for kids to start earning money?
"Parents should start teaching the concepts as early as possible," says Pam Patrick, a professor of psychology and human services at Capella University, and a family counselor with Counseling and Family Services in Daytona Beach, Fla. "Earning money links with demonstrating greater responsibility, and the home is the perfect training ground. If kids don't learn that concept early on, it's more difficult to grasp in their teen years."
"Encouraging children to earn extra money not only eliminates the standard question, 'Mom/Dad, can I have some money?' it also teaches your kids how to respect money, stick to a budget and make choices," says Randy Schuldt, vice president of IHateFinancialPlanning.com, a Web site that offers easy money management tips to the three out of four Americans who hate financial planning. "However, before even thinking about teaching kids about money, parents need to identify and agree on the financial values they want their family to have."
To help your children get started on the road to financial responsibility, IHateFinancialPlanning.com offers the following tips:
Play shopkeeper. "There are some simple games you can play with kids as young as 3 and 4 that will both entertain them and build a basic understanding of money," Schuldt says. "For example, play shopkeeper. Use play money, and let your little shopkeeper place the sales revenues in a toy bank."
Settle the allowance question. Kids usually start to get a little more sophisticated about money between the ages of 9 and 12, when their 'desire to acquire' kicks in big time. When it's real, not play, money they want, it's time to decide whether an allowance is appropriate. Some parents believe in giving an allowance for household chores, while others think kids should do chores regardless, according to a recent IHateFinancialPlanning.com poll. If an allowance is in your child's future, set your expectations. Decide if you'll permit your child to earn extra money above and beyond a weekly amount. And if you're unsure how much allowance to give your child, IHateFinancialPlanning.com has a suggested monthly allowance chart for children of various ages.
Ways to earn extra money. Be creative. Many of the ways to earn extra money that were around when we were kids may not exist any more. Sure, some of the old standards still apply: selling lemonade, mowing lawns, raking leaves, shoveling snow, painting fences, etc. But there are other ways to earn a few extra bucks. Your child could serve as a computer tutor for another child -- or even an adult or grandparent. Busy two-income families in your neighborhood might welcome a plant- or pet-sitter while they're out of town. Other options include selling handmade greeting cards, cultivating a garden and selling homegrown vegetables, or helping out at a garage sale.
Jobs for teens. When kids are old enough to join the workforce in earnest, they may need a little help getting started. "Far too many teenagers have no connection at all to where money comes from, other than it spills from Mom or Dad's pockets," Patrick says. "When that's the case, parents may have to reduce the flow of money from the spigot, so kids get the idea that they have to start earning it. But once kids make the link, it isn't that hard."
Here are some things parents can do to help their teenager get started or continue in a fiscally responsible direction (translation: get a job).
Determine interests. Encourage teens to apply for jobs that fit their skills and interests. A high school guidance counselor could administer an interest inventory to help your teenager determine what summer job might be of interest. And school or public libraries offer a host of information about jobs -- what they demand and the kind of training they require. Many have easy-to-use computer programs that match skills with jobs. IHateFinancialPlanning.com also has a "teens only" section of its Web site designed to help them learn how to earn and manage their money, from determining what kind of job they want, to tips for successful interviews.
Find out what jobs are out there. Word of mouth is one of the best ways of finding a job. Suggest talking to friends, relatives, neighbors, teachers and counselors. Point out help wanted signs in store windows, and news bulletin boards at libraries, community centers and neighborhood businesses. And don't forget about job fairs held at local shopping malls. (They love the mall anyway, so why not?)
Help them balance their time. This is about earning a little extra money. It's not about sacrificing every ounce of their free time to obtain what they want. Help your child set up a schedule that allows adequate time for school, for work and for play. Sometimes kids over-commit themselves because they simply haven't yet learned the art of juggling their time.
Lead by example. There's a lot more to work than showing up. As a parent, model the work behaviors you'd like your child to develop. Stress being on time, dressing neatly, being courteous to others. When you come home from a rough day at the office, don't flop on the couch and complain about how the world is unfair. Your child will learn a better work attitude if you demonstrate how to handle day-to-day setbacks in stride.
Track performance. Just as your employer tracks your performance on the job, set up a periodic review of your children's ability to manage their money, whether it's through an allowance, a part-time job or both. Arrange a time to talk with each child individually. It's the perfect time to reinforce the positive behaviors and inspire your child to continue them. It'll also reduce squabbling among siblings about who earned more and why.
Consider a financial match. "Helping your child learn financial responsibility isn't just about earning money -- it's about managing it as well," Schuldt says. Open a savings or mutual fund account for your child. Then offer to place a certain dollar amount in it for every dollar earned (not unlike some 401(k) plans). You'll not only encourage responsible investing, you'll also reinforce a concept that's often foreign to teens -- delayed gratification.
"Even if your child hasn't yet learned financial responsibility,
you can play catch up," Patrick says. "Sometimes kids can get
angry and view it as punishment, but it's just a delayed life skill lesson.
Be willing to weather the storm. It's never too late."
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