ShortCuts in This Guide

• Help Me Teach My Kids about Money Management
  Teaching your children about money can be challenging. As kids enter middle school, their list of wants seems to spin out of control as they try to keep up with their friends. They need your guidance to teach them practical money skills and financial responsibility. Here’s what you need to know.
  

  1. Model smart money management. You can’t expect your kids to be disciplined about money if you aren’t. If they see you saving money, they’ll save money. If you spend your money wisely and rarely splurge, they will be likely to follow your example.
  2. Give your children an allowance. For help with allowance decisions, read our EduGuide Choose the Best Allowance for My Child.
  3. Help your kids find a job. Kids as young as ten can start earning money. Encourage them to look for jobs such as babysitting, shoveling snow, mowing lawns, and dog walking. Note: If one of your kids is struggling in school, keep an eye on how the job affects his or her schoolwork: if grades drop, drop the job.
  4. Open a savings account. Banks offer standard savings accounts with similar minimum balances, interest rates, etc., but look for a bank that has a special saving incentive program for kids.
  5. Define financial responsibilities. What do you expect your kids to pay for? Movies, cell phone, clothes? Some of what your children can pay will depend on their income from jobs and allowance, but it’s best to discuss your expectations so your kids understand what is expected.
  6. Make a list of wants and needs. Be sure your children understand the difference between a want and a need. Your kids may want the latest and greatest iPod, but what they may really need is jeans for school. Once you have determined wants and needs together, your kids can sit down with a pen and paper and list items from most to least important.
  7. Set up a spending plan. Our ShortCut “Help My Child Create a Spending Plan”[another link] can help you keep it simple. After a month or two, take a look at how well your kids are following their budgets, and don’t be afraid to tweak the numbers a little if you need to.
  8. Set a limit on purchases. Decide how much money your kids can spend without consulting you first. If you set a limit (ten dollars, twenty dollars, fifty dollars) up front, you can avoid confrontations later on. Be sure to work with your children to create a limit you can both live with.
  9. Encourage bargain shopping. Check out cool consignment shops and clothes swaps, and look online for gently used items.
  10. Talk about cash versus credit. It’s never too soon to discuss how credit cards work. Show your children your credit card statement and explain interest rates, late fees, and minimum payments. Talk about when it is necessary to use a credit card (for emergencies or car rental) and when using a credit card is merely convenient.

  
  
  Sources:
  
  interest.com
  familyeducation.com
  moneyandstuff.info
  

• Help Me Teach My Kids about Money Management

  Teaching your children about money can be challenging. As kids enter middle school, their list of wants seems to spin out of control as they try to keep up with their friends. They need your guidance to teach them practical money skills and financial responsibility. Here’s what you need to know.
  

  1. Model smart money management. You can’t expect your kids to be disciplined about money if you aren’t. If they see you saving money, they’ll save money. If you spend your money wisely and rarely splurge, they will be likely to follow your example.
  2. Give your children an allowance. For help with allowance decisions, read our EduGuide Choose the Best Allowance for My Child.
  3. Help your kids find a job. Kids as young as ten can start earning money. Encourage them to look for jobs such as babysitting, shoveling snow, mowing lawns, and dog walking. Note: If one of your kids is struggling in school, keep an eye on how the job affects his or her schoolwork: if grades drop, drop the job.
  4. Open a savings account. Banks offer standard savings accounts with similar minimum balances, interest rates, etc., but look for a bank that has a special saving incentive program for kids.
  5. Define financial responsibilities. What do you expect your kids to pay for? Movies, cell phone, clothes? Some of what your children can pay will depend on their income from jobs and allowance, but it’s best to discuss your expectations so your kids understand what is expected.
  6. Make a list of wants and needs. Be sure your children understand the difference between a want and a need. Your kids may want the latest and greatest iPod, but what they may really need is jeans for school. Once you have determined wants and needs together, your kids can sit down with a pen and paper and list items from most to least important.
  7. Set up a spending plan. Our ShortCut “Help My Child Create a Spending Plan”[another link] can help you keep it simple. After a month or two, take a look at how well your kids are following their budgets, and don’t be afraid to tweak the numbers a little if you need to.
  8. Set a limit on purchases. Decide how much money your kids can spend without consulting you first. If you set a limit (ten dollars, twenty dollars, fifty dollars) up front, you can avoid confrontations later on. Be sure to work with your children to create a limit you can both live with.
  9. Encourage bargain shopping. Check out cool consignment shops and clothes swaps, and look online for gently used items.
  10. Talk about cash versus credit. It’s never too soon to discuss how credit cards work. Show your children your credit card statement and explain interest rates, late fees, and minimum payments. Talk about when it is necessary to use a credit card (for emergencies or car rental) and when using a credit card is merely convenient.

  
  
  Sources:
  
  interest.com
  familyeducation.com
  moneyandstuff.info
  
• Help My Child Create a Spending Plan
  
  A kid’s allowance is a great tool for teaching kids money management, but creating a spending plan, or allowance budget, with your child enhances the learning. Follow these ten steps to create a spending plan both you and your child can live with.
  
  

  1. Use the Spending Plan Worksheet to get your thoughts on paper.
  2. Help your child make a list of expenses. Try not to pass judgment on choices (it’s your kid’s money, after all), and don’t forget everyday expenses such as club dues, MP3 downloads, and bus fare.
  3. Classify each item on the list as a need (an unavoidable expense such as lunch money) or a want (a new purse, a video game).
  4. Assign responsibility for each item on the list. Who will pay, you or your child? Explain that responsibility means that your kid will have to keep track of expenses for each item assigned to him or her.
  5. Brainstorm possible unexpected expenses such as a birthday party gift or replacing a damaged backpack. Decide whether you want to set up a fund to cover such expenses.
  6. Plan for large purchases such as summer camp tuition, athletic equipment, and optional school-related items (a yearbook, a class ring). Use a school calendar to note anticipated expenses.
  7. Talk about savings. Buy a piggy bank for young kids, or open a savings account and teach your child how to deposit money regularly. Talk about the difference between short-term savings for small items such as snacks and longer-term savings for major purchases.
  8. Talk about charity. Share your values about giving of time, talents, and money. Talk about how kids can help others, for example, by spending some of their allowance to buy items for a local food pantry or by putting their change in an animal shelter collection container.
  9. Write down the plan, sign it, and date it.
  10. Evaluate the plan after a month or so. How is it working? What has your child learned from it? Is there anything he or she wants to change? Note: Once your child's budget is up and running, check it yearly at the beginning of the school year or on your child’s birthday to identify unexpected expenses and make necessary changes.

• Help My Child Create a Spending Plan

  
  A kid’s allowance is a great tool for teaching kids money management, but creating a spending plan, or allowance budget, with your child enhances the learning. Follow these ten steps to create a spending plan both you and your child can live with.
  
  

  1. Use the Spending Plan Worksheet to get your thoughts on paper.
  2. Help your child make a list of expenses. Try not to pass judgment on choices (it’s your kid’s money, after all), and don’t forget everyday expenses such as club dues, MP3 downloads, and bus fare.
  3. Classify each item on the list as a need (an unavoidable expense such as lunch money) or a want (a new purse, a video game).
  4. Assign responsibility for each item on the list. Who will pay, you or your child? Explain that responsibility means that your kid will have to keep track of expenses for each item assigned to him or her.
  5. Brainstorm possible unexpected expenses such as a birthday party gift or replacing a damaged backpack. Decide whether you want to set up a fund to cover such expenses.
  6. Plan for large purchases such as summer camp tuition, athletic equipment, and optional school-related items (a yearbook, a class ring). Use a school calendar to note anticipated expenses.
  7. Talk about savings. Buy a piggy bank for young kids, or open a savings account and teach your child how to deposit money regularly. Talk about the difference between short-term savings for small items such as snacks and longer-term savings for major purchases.
  8. Talk about charity. Share your values about giving of time, talents, and money. Talk about how kids can help others, for example, by spending some of their allowance to buy items for a local food pantry or by putting their change in an animal shelter collection container.
  9. Write down the plan, sign it, and date it.
  10. Evaluate the plan after a month or so. How is it working? What has your child learned from it? Is there anything he or she wants to change? Note: Once your child's budget is up and running, check it yearly at the beginning of the school year or on your child’s birthday to identify unexpected expenses and make necessary changes.
• Worksheet: Spending Plan

  Record all expenses for one week.

  Date	Item Purchased	Where Purchased	How Purchased	Amount
  10/15/XX	Bakugan expansion balls	Wal-Mart	Dad gave me money for it	$13.95

  
  Notes on Using Your Practical Money Skills

  List items that you wanted to purchase but did not:
  
  
  
  
  
  List items that you might typically purchase but did not in this particular week:
  
  
  
  
  
  How much money did you put into savings?
  
  
  
  How much money did you share with others or give to a religious or charitable organization?
  

  
  
  Spending Plan

  
  My current weekly allowance is: __________________________________________
  
  

  Weekly Expenses/Spending	Amount

  
  Each week, I plan to put into savings: ______________________________________
  
  
  Each week, I plan to give to others: ________________________________________
  
  

• Worksheet: Spending Plan

  Record all expenses for one week.

  Date	Item Purchased	Where Purchased	How Purchased	Amount
  10/15/XX	Bakugan expansion balls	Wal-Mart	Dad gave me money for it	$13.95

  
  Notes on Using Your Practical Money Skills

  List items that you wanted to purchase but did not:
  
  
  
  
  
  List items that you might typically purchase but did not in this particular week:
  
  
  
  
  
  How much money did you put into savings?
  
  
  
  How much money did you share with others or give to a religious or charitable organization?
  

  
  
  Spending Plan

  
  My current weekly allowance is: __________________________________________
  
  

  Weekly Expenses/Spending	Amount

  
  Each week, I plan to put into savings: ______________________________________
  
  
  Each week, I plan to give to others: ________________________________________
  
  
• Help My Kids Stick to a Budget
  
  Once your kids have created their own spending plan (see the ShortCut “Help My Child Create a Spending Plan”), here are some tips that can help them stick to it.
  

  1. Make a list of wants and needs. Give your kids plenty of time to figure out their needs (they probably won’t need much help figuring out their wants), and then help them organize the list from most to least important.
  2. Create a smart goal-setting strategy. Help your kids remember what they are working toward. Tell them to put a picture of the goal on a mirror, inside a locker, or as the background on a cell phone. Help them set both long-term (bike, Wii game) and short-term (sweatshirt, earrings) goals.
  3. Give your kids a notebook in which to record all the money they spend for a week. Tell them to write down every penny. They will be amazed at how small things—a pack of gum, a magazine—add up to big spending.
  4. Make adjustments to the budget as needed. Remember: a budget isn’t carved in stone. If you find your children overspending in a particular category month after month, change things up a bit. You will either need to spend less on clothing (see “Ten Ways to Save Money and Ten Ways to Lose It”) or cut expenses in another area.
  5. Keep it simple. If your children are having trouble keeping track of expenses, chances are their budget needs to be simplified.
  6. Ask for help. If you’ve tried everything to help your children, and they are still having trouble budgeting, ask a friend for help. Some people are really good at organizing and keeping track of money. Ask them to show you their system.

  
  
  Sources:
  
  moneyandstuff.info
  familyeducation.com
  
  

• Help My Kids Stick to a Budget

  
  Once your kids have created their own spending plan (see the ShortCut “Help My Child Create a Spending Plan”), here are some tips that can help them stick to it.
  

  1. Make a list of wants and needs. Give your kids plenty of time to figure out their needs (they probably won’t need much help figuring out their wants), and then help them organize the list from most to least important.
  2. Create a smart goal-setting strategy. Help your kids remember what they are working toward. Tell them to put a picture of the goal on a mirror, inside a locker, or as the background on a cell phone. Help them set both long-term (bike, Wii game) and short-term (sweatshirt, earrings) goals.
  3. Give your kids a notebook in which to record all the money they spend for a week. Tell them to write down every penny. They will be amazed at how small things—a pack of gum, a magazine—add up to big spending.
  4. Make adjustments to the budget as needed. Remember: a budget isn’t carved in stone. If you find your children overspending in a particular category month after month, change things up a bit. You will either need to spend less on clothing (see “Ten Ways to Save Money and Ten Ways to Lose It”) or cut expenses in another area.
  5. Keep it simple. If your children are having trouble keeping track of expenses, chances are their budget needs to be simplified.
  6. Ask for help. If you’ve tried everything to help your children, and they are still having trouble budgeting, ask a friend for help. Some people are really good at organizing and keeping track of money. Ask them to show you their system.

  
  
  Sources:
  
  moneyandstuff.info
  familyeducation.com
  
  
• Hold a Family Summit on Financial Literacy and Family Budgeting

  Things to Do Ahead of Time

  1. Pick a date. Write it on a calendar in a location everyone in the family will notice. Explain briefly what the meeting is about and make sure everyone knows that the meeting is mandatory.
  2. Make copies of the Financial Responsibility Inventory for each family member. Do this a week before the meeting and ask everyone to bring completed inventories to the meeting.
  3. Tell family members to keep an expense log for the week. Family budgeting includes all expenses, so ask them to keep track of everything they spend money on (gum, newspapers) for a week, no matter how minor the expense.
  4. Pick a location for the meeting that is comfortable and quiet. Turn off the TV, the computer, and the cell phones. Choose a setting where each person can express his or her feelings comfortably.
  5. Make the meeting pleasant. Order a pizza or make ice cream sundaes to get everyone in a relaxed mood. The topic is serious, but the meeting doesn’t have to be grim.

  How to Conduct the Summit

  1. Start the meeting by reading examples from the expense log. After all family members have had a chance to share family ideas, ask each person to report on their area of greatest spending.
  2. Read each question on the Financial Responsibility Inventory. Celebrate the areas that all family members agree on, and discuss areas of disagreement. But set a time limit (for example, five minutes of discussion for every point of disagreement). If someone comes up with other categories, write them down and discuss them. Welcome discussion, but make sure your kids understand that parents have the final say. Work hard to find compromises.
  3. Create a list of consequences for not meeting an agreed-on financial responsibility (such as paying a cell phone bill). For example: first offense—apology accepted; second offense—formal discussion; third offense—privileges withheld (cell phone, TV, computer, time with friends) for a specific amount of time.
  4. Write up your Family Financial Responsibility Agreement using the Financial Responsibility Inventory and list of consequences.
  5. End the meeting on a positive note. Talk about what everyone has learned from the meeting and what strategies you will use next time.

  After the Summit

  1. Post the final list where everyone in the house can see it, and don’t be afraid to modify the list if necessary.

• Hold a Family Summit on Financial Literacy and Family Budgeting

  Things to Do Ahead of Time

  1. Pick a date. Write it on a calendar in a location everyone in the family will notice. Explain briefly what the meeting is about and make sure everyone knows that the meeting is mandatory.
  2. Make copies of the Financial Responsibility Inventory for each family member. Do this a week before the meeting and ask everyone to bring completed inventories to the meeting.
  3. Tell family members to keep an expense log for the week. Family budgeting includes all expenses, so ask them to keep track of everything they spend money on (gum, newspapers) for a week, no matter how minor the expense.
  4. Pick a location for the meeting that is comfortable and quiet. Turn off the TV, the computer, and the cell phones. Choose a setting where each person can express his or her feelings comfortably.
  5. Make the meeting pleasant. Order a pizza or make ice cream sundaes to get everyone in a relaxed mood. The topic is serious, but the meeting doesn’t have to be grim.

  How to Conduct the Summit

  1. Start the meeting by reading examples from the expense log. After all family members have had a chance to share family ideas, ask each person to report on their area of greatest spending.
  2. Read each question on the Financial Responsibility Inventory. Celebrate the areas that all family members agree on, and discuss areas of disagreement. But set a time limit (for example, five minutes of discussion for every point of disagreement). If someone comes up with other categories, write them down and discuss them. Welcome discussion, but make sure your kids understand that parents have the final say. Work hard to find compromises.
  3. Create a list of consequences for not meeting an agreed-on financial responsibility (such as paying a cell phone bill). For example: first offense—apology accepted; second offense—formal discussion; third offense—privileges withheld (cell phone, TV, computer, time with friends) for a specific amount of time.
  4. Write up your Family Financial Responsibility Agreement using the Financial Responsibility Inventory and list of consequences.
  5. End the meeting on a positive note. Talk about what everyone has learned from the meeting and what strategies you will use next time.

  After the Summit

  1. Post the final list where everyone in the house can see it, and don’t be afraid to modify the list if necessary.
• Worksheet: Financial Responsibility and Family Budgeting Inventory
  
  Many parents want to shield their children from financial worries. But talking about family finances and learning practical money skills help kids become financially responsible adults. To get the discussion started in your family, ask everyone in your household to fill out this inventory. Then compare answers during a family meeting (see “Hold a Family Financial Summit”).
  
  

  Expenses (Circle Answers)	Who Should Pay?
  Clothes	Parents	Teens	Both/share
  Cell phone bill	Parents	Teens	Both/share
  Gifts for friends	Parents	Teens	Both/share
  Spending money/entertainment	Parents	Teens	Both/share
  Extras (iPod, new cell phone, texting, downloads, etc.)	Parents	Teens	Both/share

  
  

  Sources of Income (Circle Answers)	Should Your Teens Have the Following?
  Job	Yes	No
  Hours per week	Fewer than 10	10-20	More than 20
  Allowance	Yes	No
  Amount per week	$5	$10	Based on child's age

  
  

  Financial Decisions (Circle Answers)	How Should Your Teens Spend Their/Your Money?
  Birthday/holiday money	All in the bank	Half in the bank	Spend as they  want
  Money from job	All in the bank	Half in the bank	Spend as they want
  Money from allowance	All in the bank	Half in the bank	Spend as they want
  Clothes shopping	Stores of their choice	Stores of my choice	Compromise
  Allowed to spend money without permission?	Purchases under $10	Purchases under $20	Purchases under $50

  
  

• Worksheet: Financial Responsibility and Family Budgeting Inventory

  
  Many parents want to shield their children from financial worries. But talking about family finances and learning practical money skills help kids become financially responsible adults. To get the discussion started in your family, ask everyone in your household to fill out this inventory. Then compare answers during a family meeting (see “Hold a Family Financial Summit”).
  
  

  Expenses (Circle Answers)	Who Should Pay?
  Clothes	Parents	Teens	Both/share
  Cell phone bill	Parents	Teens	Both/share
  Gifts for friends	Parents	Teens	Both/share
  Spending money/entertainment	Parents	Teens	Both/share
  Extras (iPod, new cell phone, texting, downloads, etc.)	Parents	Teens	Both/share

  
  

  Sources of Income (Circle Answers)	Should Your Teens Have the Following?
  Job	Yes	No
  Hours per week	Fewer than 10	10-20	More than 20
  Allowance	Yes	No
  Amount per week	$5	$10	Based on child's age

  
  

  Financial Decisions (Circle Answers)	How Should Your Teens Spend Their/Your Money?
  Birthday/holiday money	All in the bank	Half in the bank	Spend as they  want
  Money from job	All in the bank	Half in the bank	Spend as they want
  Money from allowance	All in the bank	Half in the bank	Spend as they want
  Clothes shopping	Stores of their choice	Stores of my choice	Compromise
  Allowed to spend money without permission?	Purchases under $10	Purchases under $20	Purchases under $50