Parent Newsletters - Issue 8

No Limits Learning
kids goals Ezine

Issue 8/ May 06, /06

IN THIS PARENT NEWSLETTER

1. A WORD FROM THE EDITORS
2. ALLOWANCES
3. MONEY MANAGEMENT FOR KIDS
4. KIDS CORNER COOKING AND CRAFTS
5 TICKLE YOUR FUNNYBONE (JOKES FOR KIDS BY KIDS)
6. WORDS OF INSPIRATION
7 SPONSORS

1. A WORD FROM THE EDITORS

Welcome to the next issue of kidsgoals.com Newsletter.

Childhood experts tend to agree that one of the best ways for parents and caregivers to teach children financial responsibility is to give them a regular allowance. In this issue you will find tips and suggestions on how to incorporate the allowance into your child's life as well as advice on how to make him or her a more savvy money manager.

If there is someone you think will benefit from this free ezine please invite him or her to join our growing list of subscribers. The More the Merrier.

Please help us by emailing Cassie or Monicka at kidsgoals.com with your questions, comments and suggestions for future issues.

2. ALLOWANCES FOR YOUR CHILDREN

Giving your child a regular allowance is one of the best ways to help him or her understand the whole idea of budgeting and saving. It also encourages independence and allows them to take responsibility in their purchasing decisions. You should also bear in mind there are many things to take into consideration if you are considering an allowance for your child.

What age to begin - It is probably best to wait until your child is at least 6 years of age. Before that a child usually does not understand what money is all about.

How often - Allowances should always be paid on a regular schedule. For younger children a weekly allowance seems to work well but as children get older, it may work better to offer a monthly allowance. This is where the skill of budgeting will come into practice and will allow your child to save for larger purchases. Whichever schedule you choose always follow through. If you forget to pay your child's allowance you are teaching irresponsibility. If you can't be responsible, how can your expect your child to be? Lead by example.

How much - Have a talk with your child and decide what expenses the allowance will cover. It is important to be reasonable. If you give your child too much money you may give him or her the assumption that things come too easily. If you give them too little you may be giving them the impression that things come too hard. When deciding how much to give, take into consideration that basic clothing and school supplies are a caregiver's responsibility and not the child's. Some experts suggest trying a weekly allowance equal to 1/2 the child's age.

What is the allowance for - Most childhood development experts agree that you should not connect allowances with chores. Children should understand that the reason they need to help out with the chores is not for a reward, but because they are part of a family and everyone needs to do their part. Allowances are to teach children how to handle money but you can offer to add to their allowance if they want to do any extra chores that are not part of their regular responsibility.

No allowance as a penalty for bad behavior - It is not a good idea to dock a child's allowance. If you dock their allowance they most probably ask for more money anyway. It is better to take away privileges such as no video games or TV for a set time. Always keep in mind that the punishment should fit the crime.

It is the responsibility of the caregiver to meet the child's basic living expenses. Anything above that should be discussed with your child. A child's income from allowance and extra chores should be negotiated and understood by the child and the caregiver. In this way you are helping your child learn to handle money and also make responsible decisions.

3. MONEY MANAGEMENT FOR KIDS

"My Mom and Dad started giving me an allowance every Saturday. I used to spend it all real quick - mostly on other people. I would buy things for my parents, my brothers and my friends, and by Monday there was nothing left for me. Then I got some envelopes. On one I wrote "Friends and family", on another I wrote "Me" and a third was "Savings". When I got my money, I put a third in each envelope. Now I spend some money on myself, some on others and keep some as savings. And I'm much happier. Just spending all your money on other people doesn't automatically make you happy." Arianna, aged 13.

There are so many good reasons to teach our kids about money management - and to start as young as possible! By the time a child is old enough to ask you to buy him things, he is old enough to start understanding how money works. By the time he is old enough to pay for sweets, he is old enough to start learning about earning and saving.

The most important thing to learn as a parent is to handle and express our emotions about money in a calm way that is conducive to teaching and learning. If you want your children to grow up with a wise approach to money management, the first thing you should do is ensure that you discuss money issues openly and calmly as a family.

That can be easier said than done, especially if, like most families, there are difficulties from time to time. It is all too easy to let our children grow up hearing the message, over and over, "we can't afford it." What if you could communicate the same message in a positive way that helps a child understand how money works: "We're not going to buy xyz because we have a more important use for that money right now."

A useful idea for encouraging money management skills in your children is to have a regular family discussion time when family and individual finances are discussed, including allowances and savings, at a level that everyone can participate in - from preschool age upwards.

The four basic money management subjects to teach your kids, starting at an early age, are Earning, Spending, Saving and Borrowing. We'll take a brief look at each of these subjects, with ideas of key points to talk with your kids about - repeatedly. These lessons will need to be repeated over and over during the various phases of childhood, becoming more advanced as the children grow, if your kids are to emerge into adulthood with good money management skills. You will also want to address the subject of Investing when your children are a little older (we'll cover that in a later article).

Earning

See the earlier article on chores and allowances. Explain where the family income comes from. Who earns, and what to they do in order to earn this money. What are various other ways of earning money - such as buying and selling, or running a business? For older children, explain that taxes are deducted before the income is received. Older kids can also learn to use auction sites on the Internet to sell unwanted items such as CDs or toys.

Spending

The difference between needs and wants (for young children, illustrate this with things like the difference between spending money on your school lunch versus sweets. For older children you can talk about household bills versus holidays). Gradually make your child responsible for her spending - at the pace that works for your family. For example, at six years old she may be ready to manage the money for buying her own sweets; at eight, her own school lunch and toys; at 11, school supplies and her pet's food and toys; at 14, clothes and other essentials. How much responsibility can be safely delegated at what age will vary from child to child. At each stage, teach your child to plan her spending in advance. Use envelopes or jars so she can physically see what money she is putting aside and for what purpose.

Saving

The essential lesson to learn is to put some money aside for savings from all income that comes in. For the youngest children, use a jar so they can physically see the cash building up, and start off with teaching them to save up for just a few days! They can't think in months or weeks, let alone years, so the time between deferring gratification (putting money aside instead of buying sweets!) and the reward of buying something special needs to be as short as possible. Your goal should be to build the ability to defer gratification as the child grows, until as a teenager your child has the ability to save up for several months for an expensive item or a holiday. A good idea for small children is to give allowances or earnings in denominations that encourage saving - for example give five dollar coins instead of a 5-dollar bill, and suggest that one of them be saved.

Borrowing

Once your child has learned the basics of earning, spending and saving, he is ready to understand borrowing. Your goal should be for the child to learn that in general it is better to save up and buy what he wants rather than borrowing and paying later. The way you do this is just like the financial institutions do to us adults - charge interest! Keep repayment periods as short as possible, especially with young children - and ensure that you charge enough interest to cause some pain, otherwise the lesson is not learned.

As you progress with teaching these money management lessons to your children, they will become more responsible and are likely to surprise you with the increasing maturity of their attitude towards money. Remember to keep talking about the lessons over and over - and also to allow them to make their own mistakes. The purpose of giving your kids responsibility for money management is not for them to be perfect at it straight away, but to learn, experiment, and make mistakes in safety. It will save them from making much costlier mistakes when they leave home!

CHOCOLATE COIN COOKIES TO COOK WITH YOUR CHILD

(WITH ADULT SUPERVISION)

Makes about 3 dozen

8 Tablespoons (1 stick) unsalted butter, room temperature
1/2 Cup plus 2 tablespoons packed light-brown sugar
1 Large egg
1 Cup unsweetened cocoa powder
1/2 Cup plus 3 tablespoons all-purpose flour, plus more for dusting
1/2 Teaspoon salt
1 Teaspoon grated orange zest (optional)
1/4 Cup granulated sugar

1. In the bowl of an electric mixer fitted with the paddle attachment, cream butter and brown sugar until light and fluffy, about 3 minutes. Add egg; mix until well combined.

2. In a large bowl, whisk together cocoa powder, flour, salt, and orange zest, if using. Add flour mixture to egg mixture; continue mixing until the ingredients are just combined, scraping down sides of the bowl.

3. Scrape dough onto a piece of plastic wrap; flatten into a disk. Wrap, and chill at least 1 hour or overnight.

4. Heat oven to 350°. Line two baking sheets with parchment paper. Place granulated sugar in a small bowl.

5. On a lightly floured work surface roll out dough to a 1/4-inch thickness. Using a 2-inch-round cutter cut out cookies. Carefully press each cookie into granulated sugar. Transfer cookies to sheets, spaced 1/2 inch apart.

6. Bake until cookies are firm, about 12 minutes. Cool on a wire rack. Wrap in foil. Store in an airtight container up to 1 week.

KIDS CRAFTS - CHORE WHEEL

To go with this kids craft, check out the article on Chores and Allowances for Kids

Whether you choose to link allowances to chores or not here is a fun family project that will make the idea of chores a bit more fun.

Have kids use markers to divide paper plates into eight pie wedges. Write eight (age appropriate) chores such as washing the dishes, doing yard work, emptying the trash, dusting, and folding laundry or filling and emptying the dishwasher.

Then cut a 6.5 cm rectangle from poster board (for each plate). Clip the tips to make a pointing arrow and use a hole-punch to make a hole in the straight end of the arrows. Attach the arrow to the center of the paper plate with a metal paper fastener so the arrow spins.

Make a chore wheel for each child that they can spin every day to see what chore they are responsible for that day.

5. TICKLE YOUR FUNNYBONE

Q: What has no beginning, no end, and nothing in the middle?
A: A doughnut!

Q: Why do you always find things in the last place you look?
A: Because when you have found it you stop looking!

Q: Which is the fastest, cold or heat?
A: Heat; you can catch a cold!

6 WORDS OF INSPIRATION

"Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort." --Franklin D. Roosevelt

"Money can't buy you happiness but it does bring you a more pleasant form of misery." --Spike Milligan.

"Whoever said money can't buy happiness simply didn't know where to go shopping." --Bo Derek.

"All days are not same. Save for a rainy day. When you don't work, savings will work for you." --M.K. Soni

"Money in the bank is like toothpaste in the tube. Easy to take out, hard to put back." --Earl Wilson

7. SPONSORS

If you can suggest any organizations or websites that might want to either sponsor this newsletter, or exchange links with KidsGoals.com, please email Cassie or myself.

Thank you, from Cassie and Monicka
*****

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