John Gajkowski, certified financial planner
Money Managers Financial Group
1211 W. 22nd St.
TALK ABOUT MONEY
With little kids, you should focus on talking about money and how you use it. Start with talking about what jobs are and how you can earn money. Use yourself or your spouse as an example. You can give them their own job at home, like setting the table or helping dry the dishes. When they do their job give them a small treat and “pay” them for their work. You can even get them a library card. The library card teaches them to use the card to borrow a book and if you don’t bring it back on time it you have to pay a fee. This teaches them about credit cards and loan without using an actual money.
As children get a little older, you can start giving them a list of chores and a set of allowance each week. A good rule of thumb for how much to give your child is to use their age. If they are 5 they get $5 for completing their chores that week. Whatever you choose to give your kids- the amount matters less than the conversation you’re having with them about money.
PRE-TEENS - MIDDLE SCHOOL AGE
As your children get older, you can start getting creative with how they can earn money, like babysitting, raking leaves or opening a lemonade stand. Whether they earn cash from odd jobs or receive a weekly allowance, now is the time to teach them to save it, and I’m not talking about in a piggy bank. Junior High is a good time to help you child set up a savings account at the bank. Help them make regular trips to the bank and encourage them to save at least a third of what they earn.
This is also a good time to explain a budget and help your kids really understand the importance of having one and sticking to it. Use your own household as an example. Explain the different kinds of bills you have to pay and the consequences of not paying them. A great learning opportunity is taking your kids grocery shopping with you. Tell them how much you have to spend on groceries and have them help you shop. They will learn to comparison shop, see the amount of money you spend on everyday things and you won’t bust your budget.
TEENAGERS - HIGH SCHOOL +
The average graduate of the class of 2016 has $37,172 in student debt. That is up six percent from last year. As your kids enter high school, it is a good time to talk with them about student loans and more importantly, not misusing them. Remind them they should only borrow what they need and use their loan responsibly.
About the time that your child goes off to college, they start getting endless credit card applications. It’s a good idea for your child to build credit, but only if they do it correctly. If your child chooses to have a credit card help them pick one that has the lowest fees and a low APR. Hit home the importance of paying off your credit card bill every month. Take that time while they are still under your roof to instill these habits and they will stick with them as they transition into adulthood.