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July 07, 2010


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One of the best tips I've seen is to give kids a choice when they are fairly young to choose water when eating out rather than the usual soft drink. If they choose water, give them a dollar to spend anyway they want. They quickly learn to save it up to buy things they really want. At the same time the parents can put a dollar into their college fund.
Given the average number of times families eat out, a decent amount can be saved for college this way.
As for the kids it is a good introduction to managing their money. They learn about making choices and they learn about deferring gratification. At first it will be hard to not take a soft drink but after a while it is easy.

Since I do not yet have kids...I'm not sure how that will work. I do know that I will be teaching them about money from an early age, and showing them how much it really costs to live. Growing up I did not really have a good concept. My parents would say, "money doesn't grow on trees" but that was as far as they would go with it.

FMF, I like your simple advice - "Just say no." We can apply that in our own lives as well, considering how often if we want something we just HAVE to have it and do not say no to ourselves. I think it is a big reason so many people are in debt.

"10 Ways to Get Kids to Save Money"

This list is certainly 10 somethings, but isn't it more like

"10 Ways to Spend Less Money in the Face of Pressure from Your Kids"?

The only portion of the list that seems to be a way to get kids to save money is part 2 of item 10. Number 5 is exactly the opposite of getting the kid to save money.

If you ask me to buy you a new sports car and I say 'no', you haven't saved $50,000, right?

I haven't really saved any money either, in that avoiding spending isn't the same as saving. Otherwise I could claim to have saved millions, billions, or even trillions this year by refusing to buy [insert list of outrageously expensive items here]

I don't understand #1: shop alone.

Does it mean, don't bring your kids with you to the grocery story or for other shopping? Because I don't see how that would help teach your kids fiscal responsibility. Experience is crucial!

When my kids were younger, I always brought them grocery shopping because otherwise I'd have to hire a babysitter and who has money for that? I survived the weekly shopping trip with 2 toddlers primarily to telling them that they'd get a small ($1-$3) toy at the end of the shopping if they were "good" during the trip. And if they acted up---no toy. Although I felt guilty for bribing them, I do think they learned some self control through this. Also, I didn't go insane while having to shop with them!

Now that my kids are tweens, they get an allowance: $4/week, and from this they have to buy their own toys, computer games, & DVDs. I don't give birthday money nor do they get any from relatives (I do buy them birthday presents though). So they don't have any other source of money other than the allowance. One kid saved up and bought a Nintendo DS and a game ($150). My other kid spends it the second he gets it (guess which one is the girl?) I hope that they'll both eventually learn delayed gratification and the value of the dollar.

We also discuss all the time at the store how much this or that item costs, and if it is "worth it". At home, when they complain that we don't have a video game system or etc I tell them that we are saving so they can go to college--and I think they understand that. If they want McDonald's when we are out running errands, we discuss why we are going home and having lunch there instead. We also discuss why I'm only buying one bucket of popcorn at the movie and we're drinking bottled water that I brought from home in my purse.

Christmas and birthdays are not consumer free-for-alls in my family. I spend maybe $100/child at Christmas and on birthdays usually 20-40/child. Adults typically get less. Saving all your spending for holidays doesn't help your budget at all.

1. Shop with your kids as often as possible so they can have experience and learn the difference between need and want.
2. Explain that you have a budget, and not making impulsive shopping decisions is what helps pay for fun family activities such as movie nights, going to the zoo, etc.
3. Include some money in the budget for "fun" items, and have a family discussion about how to spend the money
4. Let each child have control over their allowance, and don't stop them from making foolish spending decisions.
5. Start a bank account, and let your child actively engage in depositing money, and checking the balance online or in a deposit book
6. If there is a certain item they always ask for, help them develop a plan to save for and buy it
7. Have categories that you pay for, and categories that they pay for and stick to them. (EG - outside of gifts, toys are paid for by the child but clothes are paid for by the parent)

We like to put the kids in charge of the budget and purchasing for a particular area of spending (subject to our review of course). The classic area for teens is clothing. A family entertainment budget (for outings like dining-out, movies, etc.) is a good area too. That way, the kids feel a sense of ownership and hitting the budget becomes a bit of a game. You could combine it with the incentive approach mentioned by your first commenter to come in under budget - i.e., some fraction of any savings under budget get paid out to the kid(s).

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