Senior Loan Officer
The McBreen Group
Kids and Money
Movies, lunch, new clothes, new car, college and more. Those of you with kids have dealt or will
deal with these expenses. But, what is your teenager doing to cope with these expenses? If the
answer is nothing, this might be a big problem. I meet more and more people every day who are
unable to comprehend some of the most basic concepts of personal finance.
I think it is important to teach your child about money at a very early age. Starting at a preschool
age, teach your kids the value of money and how important it is to keep their finances in order.
Although long-term goals such as college or a car are far-fetched concepts for a pre-schooler to
grasp, having simple goals such as saving for a new toy or trip to the zoo can teach your child to
save money and spend it wisely.
Piggy banks are both teaching tools and toys and they are a perfect way for your little one to learn
what money is and how to use and manage it. Sites such as www.moonjar.com and
www.msgen.com offer unique alternatives to your "average" piggy bank, such as different sections for the money you save and spend.
A bank account is the perfect next step to teach your child about saving for those more expensive, long-term goals. Look for banks that
have "free" youth accounts that have no minimum balance or age requirements. At most banks, a parent is responsible for the account
or can open it up on the child's behalf. If your kids receive an allowance, suggest they put half of it into the savings account. Just like
you, I'm sure they will be pleasantly surprised to see how much money they have in their account when that monthly statement arrives.
Having a job will help your teenager learn about money. After-school jobs will teach kids responsibility and give them experience in the
so-called real world. An added bonus to having a job, they now have money in their pockets to spend on Friday night movies or that
must-have pair of shoes. If you happen to have some friends with a young child, babysitting is a great way to start your teen off with
their first job. A lot of places such as stores in the mall and local eateries will work around your child's school schedule. Sites like
www.groovejob.com will help your teen find part-time jobs with companies in the area. Take care not to let your child get overworked.
This way your teenager will be able to balance both school and work. The Department of Labor clearly defines how many hours a week
and what type of work a child between the ages of 13 and 17 can do.
We all deal with bills and one day, so will your child. As a way of helping them learn to be responsible spenders, why not come up with
a monthly amount with which they will pay for their expenses? You could charge them $10 for their monthly cell phone bill and $15 for
their car insurance, whatever you deem to be fit. Once they start paying the bills, even if it is just to you, they'll understand that they
cannot always buy anything they want, and that they need to put aside money for necessities as well.
The moment your teenager turns 18, they'll be bombarded with offers for credit cards. Many teenagers see credit cards as free money
without thinking of the interest rates or payments that they will need to make. It all adds up to a heap of trouble if the debt is not paid.
Teaching your children how to manage their money and credit will help them from becoming like many their age who have fallen victim
to credit card debt. Remind them that any credit they apply for in the future is affected by what their credit is like now. Credit cards are
heaven-sent for emergency situations. But other than that, if they don't have the money to buy the guitar or mp3 player they want now,
it's probably not a good idea to buy it.
If you have any other tips on ways to help kids manage money, give me a call.
All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without
notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of
loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a
tax advisor regarding the deductibility of interest.-- The McBreen Group