Money and Allowance this Week on #DadChat

Mark your calendars and come on over to twitter on Thursday!  I have been invited to join Bruce Sallan on his weekly #DadChat this Thursday, September 5th from 6:00 – 7:00 p.m. PT/9:00 – 10:00 p.m. ET to talk about money and allowance.  Let's knock out this sense of entitlement and teach our kids the value of a dollar!  To join the party, just go to twitter and follow #DadChat on Thursday.

Image by Bruce Sallan

Bruce Sallan is a nationally syndicated radio talk show host, a columnist and a published author of "A Dad's Point of View" and "The Empty Nest Road Trip Blues."  Most importantly, he's a father of two boys and regularly shares his adventures in parenting.  His weekly tweet chat, #DadChat, has become the biggest parent chat on twitter and happily has equal participation of Dads and Moms.  #DadChat set the World Record in January, 2013 for the most “Impressions” of any chat ever at 267,000,000 +.

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Online Allowance and Money Trackers

Online allowance trackers, or virtual family banks, are popular tools for organizing a child’s money and encouraging financial literacy skills.  We created our MoneyTrail website and app to fit a need that we have in our family.  We have four kids and keeping up with allowances, IOUs and cash was difficult.  I would continually forget the last time I paid allowance or I would lose the sticky note that reminded me to pay Brittany $10 for washing the car.  Since Frank was a computer programmer and I was a teacher, we put our heads together and created a solution that worked for us.  (Read our full story here.) 

MoneyTrail may have started with our family but it has rapidly grown to help thousands of families with their allowance and money management needs for kids.  Frank and I are proud to offer our free virtual family bank from our website and we have an app in all the major app stores.  

MoneyTrail features include:

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Are We Talking with our Kids about Money?

Mint.com recently posted an excellent infographic about parents, kids and money.  The information is based on a study by T. Rowe Price and is definitely worth sharing.  Take a look...

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When Should Parents Stop Giving an Allowance?

Kt Ann's photos on Flickr

Last week, I shared some tips for setting up an allowance system.  After reading this, Thad (from Thadthoughts.com) asked a very thoughtful question in our comments section. 

What do you do when your teenager actually begins to earn some money through babysitting or other jobs?

Thad raised a great point.  There are many articles and books written on the pros and cons of giving an allowance to your child.  Heck, I have written about it several times myself!  One often overlooked aspect  is determining when to stop giving the allowance.  It is important have a clear exit strategy so that everyone (parent and child) is on the same page.

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6 Tips for Creating a Successful Allowance System

from 401kcalculator.org

An allowance system is one option for teaching money management to kids and can be an effective tool. However, it requires more than just handing your child some cash every Friday.  Here are 6 tips for creating a successful allowance system in your family.

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Let's Talk about Money! 4 Tips for Starting the Conversation with Your Child

Image via paulhami on flikr

Would you ever hand your car keys to a teen that has never driven?  Would you hand a book to a 4 year old child and expect her to learn to read it by herself?  I am guessing that most folks would answer "No" to both of those questions.  When teaching a child or a teen new skills, there has to be some parental interaction and guidelines.

The same thing applies to teaching a child or teen about money management.  If you just hand your child a wad of money, they will learn very little about responsible money management.  There has to be ongoing conversations and consistent guidelines (regardless of whether your child gets an allowance or not) in order for your child to become financially literate.  I was thrilled to find two articles recently that covered this topic.

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A Conversation with David Domzalski from Financial Bin

I was honored yesterday to be interviewed on a podcast with David Domzalski of Financial Bin, a company that focuses on personal finance and entrepreneurial education for the Generation Y age group.  If you haven't checked out his website, please do.  It is a fabulous resource for personal finance, budgeting, wealth, real estate and entrepreneurship.  He has a long list of highly qualified contributors that keep their content fresh and relevant.  David also hosts podcasts several times a week so scoot on over to his site and take a look around.

Here is the internet radio segment of David and me talking about MoneyTrail and teaching kids & teens about money.

Listen to internet radio with FinancialBin on Blog Talk Radio

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5 Steps to Understanding & Organizing Kid's Finances

This week I was selected to post a guest blog on Raising CEO Kids.  Dr. Jerry and  Sarah L. Cook are the founders of this wonderful program.  The "mission at Raising CEO Kids is to to educate, empower, & encourage parents to RAISE smart, savvy, successful, and confident CEO KIDS as well as to support CEO Kids or those who want to be CEO Kids!"  Here is the beginning of the article...

January is National Get Organized month and many of us have made resolutions to organize our finances. With just a little time and effort, you can also organize your child’s finances so that your child can develop and practice responsible money management habits. 

Generally the same theories and steps that we would take to organize our adult finances can be applied to our kids’ finances. Kids and teens have income and expenses, just as we do. And, they can learn to keep track of their finances and analyze their habits, just as we should do.

Try these 5 Steps at home with your kids to get their finances in order:

Read the entire article at Raising CEO Kids...

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Teaching Your Kids about Money: January Edition

Part One:  How do kids get money? 

 

To kick off our series Teaching Kids about Money, we are tackling the most basic concepts, earning & using money, in January. 

Part One:  How do kids get money?    

Part Two:  How much control should kids have over their money?

There are many different sources of income that enable kids and teens to have their own money.  We are going to look at:

• Allowance
• Gifts
• Jobs from Parents
• Entrepreneurial endeavors
• Part time jobs

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Pam's Picks: Teaching Kids about Money

Each week, I spend a lot of time reading new articles and blogs about kids, teens, money and financial literacy.  I'll even pop over to YouTube and see what's going on over there. In "Pam's Picks", I will share some great articles and videos with you.




Teaching your kids about money involves more than learning to count pennies and dollars.  It encompasses topics such as saving, living within your means, investing, and avoiding impulse purchases.  I ran across several marvelous articles this week that put a new spin on how to teach kids about money.


8 Habits that Separate Doers from Dreamers by Dan Kadlec on www.moneyland.time.com
Are you a Doer or a Dreamer?  Dan shares 8 habits that can lead to reaching retirement goals and raising money-smart kids.  Read the article...

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Book Review: Clark Smart Parents, Clark Smart Kids

Clark Howard is a nationally recognized radio-show host and bestselling book author.  He is generally regarded as a money-saving expert and his motto is “Save More, Spend Less and Avoid Getting Ripped Off.”  Clark is also a father of three and combined his money savvy skills with his parenting experience to create Clark Smart Parents, Clark Smart Kids.  This book was originally published in 2005 but his advice and thoughts are timeless for any parent who is concerned with teaching their child money management skills.

The opening sentence conveys the theme of the book.  “Teaching young children about money produces a trifecta of benefits:  it helps them in school, it helps them with values, and it helps you save money.”

Clark Smart Parents, Clark Smart Kids is divided into sections by age:  kids, teens, adult children and your parents.  There is also a section with worksheets, activities and resources.  For the purposes of this blog, I am only going to share with you the highlights of the kids and teens sections.

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Pam's Picks: Money Management from Preschool to College

Each week, I spend a lot of time reading new articles and blogs about kids, teens, money and financial literacy.  I'll even pop over to YouTube and see what's going on over there. In "Pam's Picks", I will share some great articles and videos with you.




Whew...what a great week for articles about kids, teens and money.  The experts this week covered money management concepts from young kids to college students and from piggy banks to cell phones!  Take a look at the treasures I uncovered.


Allowances:  What, When and How? by Kelly Whalen on www.adaptu.com
Kelly's article lives up to it's title and more!  She covers all the basics of allowance but then she goes one step further.  She gives usable advice, categorized by ages, of activities that you can do with your child to help them understand the concepts of money and money management.  Read the article here.

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"Earn It, Learn It" Takes Allowance to a Whole New Level

Earn It, Learn It 

by Alisa T. Weinstein

Earn It, Learn It is a new twist on a traditional allowance.  Alisa developed this program after a “light bulb” moment with her daughter in a department store.  Her daughter wanted yet another glittery lip balm to add to her collection.  Alisa told her daughter that if she wanted it, she needed to get a job!  That moment was the beginning of the Earn My Keep allowance program.   Alisa describes it best ---Earn My Keep is an easy-to-do parent/child program that helps kids ages four to twelve earn money for exploring and experiencing real careers.  Kids pick a task from one of fifty career profiles, complete it within a set amount of time, and earn a set amount of money.”

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How to Get Teens to Save Money

Real Items Teens are Saving For

Many teens that are using MoneyTrail are saving for specific items or goals.   Getting teens to save money can sometimes be a challenge.  However, it is a skill that can be learned with patience and practice. 

Four Key Points to Get Teens to Save:

1. Help them set a specific goal.  Whether it is a short term savings goal (cell phone, iPod) or a long term savings goal (car, college), having a specific goal will keep the teen focused and can reduce impulse purchases.
2.  Help them figure out how to achieve the goal.  Talk to your teen about how he is going to get the money.  Is he saving allowance for a long time or is he going to get a job?  What kind of job?
3. Give them an organized system for keeping track of their progress.  Details, ideas and amounts can be easily forgotten or pushed aside after time goes by.  MoneyTrail provides this organized, consistent system for teens and parents.  Customized accounts can help your teen meet his savings goal.

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5 Tips for Setting Up an Effective Allowance System

Photo taken by Brittany Whitlock

If asked, most parents would say that they want their children to have smart money skills.  Figuring out the best way to teach your child about money can be a bit tricky.  There are many theories of how allowance or money lessons could be structured and used within a family.  Do you give an allowance or not?  Do you tie the allowance to chores?  Do you pay for grades?

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