What role model are you setting for your kids?
Approximately fifteen hundred high school seniors were recently asked basic facts about personal finance, and the great majority were stumped for answers. The results were not promising for our children’s future:
REALITY CHECK: 95% of teens surveyed scored below a C in financial literacy.
Wonder why? Another survey finds a key reason for teens’ low financial scores:
REALITY CHECK: 80% of all college freshman admit to never having a conversation with their parents about managing their money. What’s more, almost one in four of these same teens say it’s just fine to blow as much as $500 without checking in with their parents.
The findings are hardly a proud parenting moment, but I also hope you are starting to get my drift.
The truth is too many kids are flunking financial literacy and one big reason may be that we’ve failed to teach our children a few essential “money smart lessons.”
If you’re concerned about your kids’ future spending habits, then start your money talk now and there’s no better time than these next few weeks. Newspapers will be filled with coupons and penny savers. Television ads for holidays “deals” will air non-stop. Teen magazines will feature those supposed holiday “in” gadgets and “must have” items. Those are also perfect opportunities to let your kids know that money doesn’t come easy. It’s also the time to review that you do have clear expectations and limits about your family’s spending during the holidays. Here are a few ways to weave in those crucial money chats over the coming weeks with your kids.
Kids look to us as the example to copy so how are you doing in modeling money smarts to your children? Are your kids seeing you cut out those coupons? Waiting for the right price?
Displaying smart spending habits? Prioritizing your must-haves? Beware that your children learn spending and saving habits from you. How are you doing?
- Monitor TV Consumption: Television is the one of the biggest culprits in fueling kids’ spending urges, and commercials are relentless in trying to get kids to buy, buy, buy. Research also shows that media impacts our children’s money attitudes and increases materialism. During the next few weeks those retailers will be pushing products and urging your kids to spend. So beware of those advertisements! Do take time to explain to your kids the real intention of those advertisers.
- Use Real-Life Examples: Take your child shopping with you. I dare ya! But when–or if–you do, show him how you compare prices. Explain to her how you look for bargains. Use those outings as teaching moments that do instill good shopping habits.
- Teach Bargain Hunting: If your kids are purchasing gifts for siblings (or even you!) get them involved inchecking out those penny saver ads. Have them clip out coupons. Tune your kids into the bargains at those dollar stores. Hit the outlet malls, and don’t overlook thrift stores and even garage sales. And tell them to watch for sales! Grandma will never know if her present was ten dollars less because Johnny waited to buy until sales day.
- Cut Impulsive Shopping: Set a household rule that your child must write down any pricier intended purchase, and then postpone buying it for at least twenty-four hours. It’s a great way to teach kids to delay gratification and to “Think” before spending. A younger kid can draw it on her “wish list.”The wait time could vary from an hour or day to a week or month depending on the child’s age and maturity. If your kid loses interest before the time is up, even she will agree that she didn’t really want that item after all.
- Teach “Wants vs. Needs”: This is the “Gotta Have It NOW Generation” so a big step in helping today’s kids learn to be smart spenders is teaching the difference between “want it…” vs. “need it.” The trick is to get your kids to assess what they already have that is still in good shape and can be recycled, what’s missing and then what’s really needed is on the “need” list and holiday request list. Now your kids can create a holiday wish list based on real needs not wants to help prioritize spending.
- Do One Store Shopping to Boost Consumer Skills: Your kids planning to do their own holiday shopping? If so, this is a great way to help teach them consumer skills. Consider choosing just one store that has the best bargains to take the kids this year (like Wall Mart, Target, K-Mart) for their gift-buying. By announcing, “We’re shopping only at this store,” the kids are forced to look for the best bargains in one place and you won’t find yourself driving to multiple stores (and bringing back multiple items). This is also the time for them to bring their coupons and shopping lists. Make sure you also have them compare prices of items so they understand value.
- Consider After-Holidays Gift Buying: Seriously! I know more families who realize the best deals are December 26. Those parents set a new rule: “You receive a few items under the tree but wait for that pricier item the day after the holidays.” The kids learn to appreciate the value of a good deal, the parents are grateful to save a ton of money, and the whole family enjoys that day after shopping outing for everyone’s “one special–and better-priced-gift.”
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Michele Borba is the author of over 25 parenting books including The Big Book of Parenting Solutions.