Serve Magazine from Concordia Plan Services Winter 2017 - Page 12

Teaching Your Kids About the ‘M’ Word BY Christina Knott A s a parent, you have many awkward conversations with your children. One may be talking to them about the “M” word: money. How to spend and save money is something that many adults struggle with, which can make it uncomfortable or difficult to teach children about the subject. But while the conversation isn’t easy, it’s really important. Many of us look back and wish we’d learned more about financial wellness when we were younger. So how can we teach our children about the proper way to spend and save money and establish good financial habits now that can help them through the rest of their lives? Start With the Three Basics: Saving, Spending and Giving Most of our financial transactions fit into these three cate- gories. Several financial experts suggest using three clear jars as a visual way to help kids understand the concepts of saving, spending and giving. While there are many deco- rative and fun variations of the traditional piggy bank, they don’t let kids actually see the bills and coins adding up. Explain to your child about choosing where their money goes and how each jar is important and has its own purpose. Here are some jar tips: • Try giving money in small bills. If a child receives a $5 bill, she is more tempted to put the entire bill in one jar (usually the spending jar). But if you give her five $1 bills, she can easily put money in each of the jars (for example, three in spending, one in saving and one in giving). • Ask family and friends who give money as Christmas or birthday gifts to try to give cash instead of checks. The idea of cash is easier for kids to understand and is a more visual representation of money. Gift cards are nice, but having cash lets your child spend the money wherever he wants and he’ll be able to get change back if there’s some left over from his purchase ($1.45 on a gift card usually goes to waste). • Let them make their own choices about where to put the money. It’ll be hard for you — especially if their spend jar is full and the other two jars are mostly empty — but you’ll just have to be patient for the light bulb to go on and for them to realize how they’re prioritizing their money. Money for the jars can come from jobs they do around the house, an agreed-upon reward system (an A or a B on a test equals $1) or gifts. You don’t have to pay your kids for every chore they do, but you can use it as a reward for extra jobs or help they provide. Teach Them About Spending Wisely Chances are, your kids are already watching your spending habits, so use those moments to explain how you make your spending decisions. Openly tell them about how you’re using coupons to save, buying the bigger box of cereal because you’re paying less per Cheerio, or picking up a generic versus a name- brand item. These are all lessons that help your child learn to spend wisely in the future. You can also help them use these tactics when they make a purchase themselves. You can encourage your daughter to watch for the “doll of her dreams” to go on sale before buying it. If your son really wants a bike, maybe a resale shop would have a gently used one for a fraction of the price. If your teenager “has” to have name-brand jeans, offer to contribute the cost of a basic pair and have him or her pay the difference.