Teaching Kids to Handle Money

By: Zoe Mount, MFT

Unitarian Universalist Church of Palo Alto

December 7th, 2008

Introduction

• A little about me• What is an MFT?• What kind of people do I see?• Why this topic now?

Overview

• This seminar will cover teaching kids to– Handle money– Budget– Stay out of debt– Save

Teach What at What Age?

• What can a preschooler understand?• What can a school child understand?• What can a pre-teen understand?• What can a teen understand?

A Quick Note

• It is hard to teach what you don’t model– take a good look in your (financial) mirror.

• Do you pay your bills on time?• Do you keep your credit card debt down?• Would you worry if your children handled

money as you do?

Teaching Kids to Handle Money

• How to model paying bills when it’s all automatic?

• Bring automation to your child’s attention.• Make a production of paying any bills you still

pay with a check/envelope.

Teaching Kids to Handle Money

Making finances fun

• Playing money games (Monopoly, Life, CashFlow)

• Games with real bills: ‘which number is biggest? Which is lowest? Which shows up every month?

Life Is The Best Teacher

Let Kids Have Their Own Money

• This means ‘no strings attached’.• Letting kids handle their own

money teaches them lessons early.

Let Kids Have Their Own Money

• This also means access to their money.

• Cash on hand or debit card

Benefits of an Allowance

• Gives kids their own money.• Sets up assumption of daily/weekly chores.• Gets chores off your to-do list!

Ways to Encourage Saving

• Help them invest in stocks/bonds• Don’t make money ‘disappear’• Offer interest on savings held with you

How to Foster Responsibility

• Expect it.• Praise efforts, improvements.• No loans/forwarding allowance.• Make them pay for their own luxuries.

How to Foster Responsibility

• Make them pay for their own luxuries, such as:

• Phones• iPods• Entertainment• Transportation• Food

Avoid Forced Saving

• No one tells adults how much to save, how charitable to be.

• $10 allowance -$1 savings - $1 charity = $8 allowance and we all know it.

A Different Approach

• Instead, let them see you save, donate to charity.

• Tell them why you do it.

Other Ideas

• Employ budgets and profit sharing

More on Budgets

• Grocery shopping• Family dinners• Clothes shopping

What’s With Profit Sharing?

• If child saves money from on family budget, split savings between household and child.

Recommended Reading

Some books I found helpful:

• The First National Bank of DadOwen, D.

• The Answer is No!Whitman, C.

Miscellaneous

• When to start allowance?• How much allowance?• How paid?

More Miscellaneous

Advantages to teaching your kids about money:• They won’t move back home.• You won’t have to worry.• They can support you!

Any Questions?

Now it’s your turn to talk!