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Our Kids and Their Money

Budget Stretcher (featured column)
by Terry Rigg

When I was a kid, I can't believe that was almost 50 years ago, my folks used to give me a nickel, dime or sometimes even a quarter to go to the corner store. When I got that money I had to go directly to the store and make sure every penny was spent.

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Things didn't change much when I grew into an adult. I got my paycheck and made sure that it was gone just as soon as I could get rid of it. Sometimes I even paid some bills.

It took me a long time to realize that some of your money is meant for tomorrow and what is meant for today has to cover your obligations first.

It would be easy to blame my folks for not teaching me the right way to manage my money. It would be even easier to blame the schools for not having a class for real life finances. The problem is that my folks or the schools didn't pay the price for me not learning these lessons. My wife and family did.

It's time that things change. We have gone generation after generation of having more debt and less knowledge of how to deal with it. We have to educate our kids, starting as soon as they know how to count, about the necessity of saving and controlled spending.

I believe that, if we can afford it, we should consider giving out kids an allowance, not to ensure that they have money, but to pay them for what they do to help. Giving them money and not expecting anything in return is sending the wrong message.

If you can't afford an allowance, encourage them to find ways to earn their own money. Running errands, babysitting, mowing lawns are all things that neighbors and friends would be willing to pay for.

Just as important as encouraging them to earn their own money is to emphasize the importance of putting some of it away for things they want in the future. Believe me, as a Father of 3 and a Grandfather of 6, I know they all have a big ticket item they have either seen on TV or that all their friends have that they just have to have.

Here is a trick I've used to make a deal with the kids. If they need tennis shoes, I would buy them. If I paid for them they got the $20 pair. If they wanted the more expensive shoes, they would have to make up the difference. It's amazing how often the $20 pair would do just fine when they found out the money would have to come out of their own pocket.

What I've been talking about up to now is just spending and saving. There is a whole lot more that our kids need to know than that. They need to learn how to budget their money, effectively manage a checking account, know how to apply for loans and what they can expect to pay for the privilege of using someone else's money, learn what they have to do to make their selves eligible for loans, how to control impulse buying and the list goes on and on.

One other suggestion that I have is to get the kids involved in your finances. No, they shouldn't have any control, but they need to find out just how hard it can be to keep everything going financially. It may even show them why you say no to that $80 pair of Nikes.

It's not too late for our generation to get control of our money but, for many of us, it has been a struggle from day one. Wouldn't it be great if we could save our kids from going through what we had to. All it takes is knowledge and the willingness to pass it on to our kids and grandkids.

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Copyright © 2003 by Terry Rigg. All rights reserved.

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