The Accidental Savings Plan

I have accidentally discovered a brand new way to get my 12 year old to save his money. Pay him in BIG bills! Sounds crazy but it has worked. He has a $50 bill that he refuses to part with. It all started with a visit to his grandparent’s house.

from Flickr.com

One of the highlights of summer time for my kids is getting to spend time with their grandparents. They play Scrabble, build marvelous things with my Dad and generally get wonderfully spoiled for a week. In the midst of all the fun, my parents have discovered that my kids will also do plenty of summer chores for them. Things that my parents can’t (or don’t) want to do, such as detailing cars, washing windows and painting benches have become specialties for my kids! Grandparents tend to pay pretty darn well too.

This past summer, my 12 year old accomplished several of the big tasks for my parents. They paid him $50 and gave him a brand new, crisp $50 bill. He still has it and is determined to keep it for a very long time. There have been two instances where he has thought about buying a toy or game but has opted to save his money because he does not want to part his cash!

The desire to hang on to that $50 bill has caused him to analyze and critique his spending habits.  He really thinks about whether an item is "worth it or not".  

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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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Toys Sales and the Recession

By Photos8.org

Recession.  Foreclosure.  Bankrupty.  Debt.  The past few years have been full of stories about the harsh realities of the economy.  I read post after post each week from folks who are budgeting everyday to reduce their debt and improve their economic status.  Imagine my surprise last week when I ran across an article by Jason at Frugal Dad.com in which he shares statistics about the toy industry in the United States.  It seems that the toy sales in the US have risen during the recession.

Take a look at this graphic image below that Jason put together.  Some of the stats are amazing.  The most intriguing to me are:

• Less than 4% of the world's children live in the United States but we buy more than 40% of the toys.
• The amount of money spent per child on toys in the United States is $280 per year.
• Toy sales have increased by 2% during the recession while the amount spent in supermarkets has decreased by .5%.

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Gift Card Management for Kids & Teens

Kids & teens learn to manage gift cards

My kids really like getting a few gift cards for presents.   My younger kids view them as a “free” shopping trip and enjoy getting to use a plastic card like the grown-ups.  My teens like gift cards because they are just darn picky when it comes to gifts and would often prefer to pick out their own stuff.    Whether or not you like gift cards, the reality is that at some point your kids will have them and will need to learn to manage them appropriately.  With four kids in our house, gift card management can occasionally get challenging.    (Several of these obstacles prompted us to add a gift card tracking feature to MoneyTrail.)

Here are some of our common obstacles and the solutions we have developed over the last few years.

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How Giving Presents to Teachers can also Teach Budgeting Skills

Many kids love to give their teachers a present for the holiday season.  When my daughter was in elementary school, she wanted to give presents to practically every teacher and adult in her school.  It was very sweet, but not the most budget friendly attitude to have! 

At the beginning of December, I would ask Brittany to make a list of all the teachers that she wanted to give a gift to.  Then we would talk about the total amount of money we were willing to spend on teacher presents and do the math to determine how much she could spend on each present.  I honestly did not realize it at the time, but this process was modeling budgeting skills for her.  It was age appropriate and was relevant to her, both of which are key to making the concept of budgeting less abstract to kids.

When Brittany wanted to hand out 15 – 20 presents, we had to come up with gifts that would still fit our budget.  Here are some of our more creative, frugal ideas:

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Kids, Money & Family Finances

I was interviewed by Kimberly from 4Virtue Family Focus for a podcast about Family Finances and how that relates to teaching kids about money management.  4virtu is a free, secure networking and organizational management system with a family-centric approach. They deliver a solution for today’s busy families to organize while saving time & money; to simplify and manage communications with the organizations they belong to; and to connect & enrich local communities. Check out the interview about kids and money...

Listen to internet radio with ParasolCommunications on Blog Talk Radio

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"Don't Buy Stuff" from SNL

Let's kick off the week with a laugh!  Here is a classic funny money moment from Saturday Night Live.  And...wrapped up in the humor are several great money lessons.



Video clip from www.hulu.com

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Guest Blog for the Johns Creek Patch: Helping Teens Avoid Impulse Spending

In this week's guest post with the Johns Creek Patch, I talk about 8 Questions to Help Teens Avoid Impulse Spending.  With summer jobs and extra babysitting money, teens often have more money available to spend.  Go through these 8 questions with your teen to help them hang on to their money instead of spending it on the latest, greatest gadget!  Read the article...

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8 Questions to Help Teens Avoid Impulse Spending

“That money is burning a hole in your pocket.”  This timeless phrase was uttered to me many times as I was growing up and I have found myself saying the same thing to my kids.  It is no surprise that young kids want to spend their money immediately.  To them, owning a dollar makes them rich! However, as kids get older, the amount of money that they may be handling is significantly more than just a dollar.  Monetary gifts for birthdays and holidays, paychecks from jobs and even gift cards can add up to a sizable amount of money for a teen.  Many families have their teens save a portion of their money and allow them to spend the remaining amount.

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