Where's All My Money Go? Oh Yeah…

Two weeks from today I will be visiting colleges with my younger son. A blessed event to be sure but also one that strikes fear into the heart of many parents. How do I pay for it? Please don’t let him like the out-of-state one! With August, the money woes started long before that. I have told him since an early age he will never have two nickels to rub together. The concept of saving any money he ever got has never been an option. It all needed to be spent immediately. The lack of impulse control and need for immediate gratification was just too much. Trying to explain that if he waited to add his Christmas money from his NC relatives to his Christmas money from his Ohio relatives to buy something even better was like trying to explain how to build a space shuttle. And we were lucky enough to be fairly financially secure so he thought the money for whatever he wanted would just be there. If not in cash, then on one of those credit card things…no matter that those card things had to be paid for someday! I’m not sure how he handled his affairs in the couple of years he was living on the streets before he was incarcerated. I know a little of how he made his money. Not the best choices. He tried a job once. Lasted three days. I even helped him open a bank account. He’s drained the money from the savings account we had for him as a child, where we insisted half of any birthday money go as a way to teach saving when he was little. When he wanted to get his own place his father and I ran the numbers with him multiple times on what it took to live on his own. He kept saying that wasn’t how much it really cost. Maybe as his pre-frontal cortex continues to develop that aspect of his behavior will grow. But I fear his impulsiveness will always run the show. But for those RAD parents out there who may have that battle yet to wage, I have these tips for teaching money sense to your kiddos! Preschoolers & Early Elementary (7 & Under) Think about it like tying shoes…it’s one of those things that you learn at this age and you have to practice.

  1. Communicate about money: Don’t hide your discussions about money. Don’t discuss your stress about not having enough to pay the bills but if you get a sweet deal on shoes or you’ve saved enough for a family trip to an amusement park, share the celebration as a family. And use the money terms (“save”, “share”, “choose”) and financial values (“save for a rainy day”) so they understand how you view and value money.
  2. Involve them in your shopping: When you recognize a good deal and verbalize it, it shows your child that you see the value and are making a decision about buying it. At checkout, let the child buy something themselves, hand over the cash and all. One of the biggest problems we had with August when he was little was explaining to him that a $20 bill was better than having $18 one-dollar bills. He just wouldn’t buy it. He liked have more bills. This resulted in the purchase of a Nintendo handheld game thing one year with $150+ dollar bills and a very pissed off GameStop cashier.
  3. Open a savings account: As I mentioned above, we set the rule of half of birthday money going into a savings account. The boys balked at first but they caught on and they became cool with it (at least in public) and got good at the math when they got money!
  4. Play Games: Duck Duck Moose, Bringing Home the Bacon, or even playing with a calculator while you shop and adding up the price of what is bought. Seeing the total will help them realize the actual costs of things.
Older Elementary Kids & Tweens (8-12) These children can begin earning money and developing personalities around money and you’ll learn which of your children are spenders (August) and which are savers.
  1. Brainstorm ways to earn: They won’t care about managing your money but they will care about managing money they earn. Help them think about their passions and talents. Love animals? How about walking neighbors’ dogs or pet sitting? If they are crafty how about making something to sell? They can research and create a business plan figuring out how much to charge by looking at others doing the same thing in the market, considering costs and figuring out what they need to make a profit.
  2. Talk about spending choices: One of the hardest things to do will be to talk about what to spend the money they earn on without criticism. The positive reinforcement of good choices is more important than the punishment of bad ones but you can begin to talk about wants versus needs. If you are out and your child wants a toy you weren’t going to buy and you say OK, make sure they know it’s their money they’re spending not yours. It will be coming out of their savings account. That’s a powerful lesson.
  3. Be positive about your job: This may be where I lose some of you. I know there are days when going to work may be the last thing you want to do. Or you may be working because you have to or for the benefits. But kids need to feel excited about the idea of earning money and what it allows them to do so paint on that smile!
  4. Model Philanthropic Behavior: Even if it’s a stretch to the budget, let kids see you helping those less fortunate. Remember that kids see everything and will take those behaviors into adulthood. Even if it’s some spare change into the Salvation Army bucket at the holidays. And ask them for input into your charitable giving choices. If they want to give their money too, let them be part of the conversation.
Teens & College-bound kids (13+) Now is the time to begin to involve your kids in your family’s financial situation. This is especially true when conversations about college get closer. Talking about credit scores and applying for financial aid and scholarships should be open discussions.
  1. Track dollars: There’s an app for that! Current is great one which has spending, saving and giving “wallets” tied to a debit card which parents can make deposits to and set up notifications for. However it is tracked, make sure there’s a conversation that follows so they can see where their money goes. As for credit cards, most experts say not until they have their own source of income and can make their own payments.
  2. Play “What If?”: Discuss tricky money situations and how to handle them. Who pays on dates? How do you decide? What if your date’s family is super-rich? While there may be no right or wrong answer, having the conversations will help your child become more savvy about the situations.
I know this is a lot to take in but you really only need the parts that apply to your child’s age! Money has been and always will be a monster to deal with and RAD does not make it any easier. I’d love to hear from anyone who’s found tips or tricks that have worked for them in handling money with their kiddos! Till next time, Shannon  ]]>

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