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About this blog: A longtime newspaperman, I have been editor of the Pleasanton Weekly since it was launched Jan. 28, 2000. I was a reporter and Neighborhood News editor at the Chicago Tribune for 13 years, and previously a reporter for the Advance...  (More)

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Financial adviser urges parents to give kids a head start on handling money

Uploaded: May 9, 2017
Nathaniel Sillin, who directs Visa's financial education programs, recently issued an advisory for parents and their children about gaining experience in handling money. It's good advice because when you're a kid, a few dollars can seem like all the money in the world. It can take weeks, sometimes months, to save up your allowance. When you finally decide to spend it, you might realize that $10 or $20 isn't as much as it seems.

As a parent, Sillin says, you can help children build important money management skills by providing experiences for them at a young age. Leading by example is a good way to start, and it can help instill good values and money habits. However, you'll also want your children to get their hands dirty.

A good way to start might be through games, such as Peter Pig's Money Counter, or activities that help them identify coins and bills. Older children may be ready to see how much things really cost. Go over your bank or credit card statements with them to show your itemized purchases and discuss where you might cut back in the future.

Sillin says you can also turn a monthly bill into a teaching moment. Children might not realize how leaving the lights, heat or the air conditioner on can affect your monthly bills. You can sit down together and compare each month's bill to the bill from the previous year. The practice of reviewing and comparing bills can help children understand that their actions have financial consequences.

They'll also start to learn how much it costs to keep your home comfortable. That's a valuable lesson, one I didn't truly learn until I had my first apartment. You could take a similar approach to the groceries or other monthly expenses.

Help your children earn an income. Knowing the numbers is only part of the picture. It'll be difficult for children to practice managing money if they don't have any money to manage. But how, when and why children should receive an allowance is a debate for many parents.

Whether you pay a chore-based allowance or offer payment based on extra work, you could use a personal finance app that lets children see how much they'll earn for each task. There are a variety of apps designed for different age groups, and some let kids create virtual accounts where they can track their earnings, spending and progress towards financial goals.

You can also help children find ways to earn money from outside the family. Organizing a yard sale could be a chance for them to help you clean out the home, practice bargaining and learn valuable lessons in entrepreneurship. Even a lemonade stand or bake sale requires that they buy supplies, work to earn money and put aside some of their earnings to pay for more supplies later.

Make your kids responsible for their bills. With a steady income comes increased responsibility. Make teenagers the boss of a bill, with real consequences for late payments.

The mobile phone or internet bill could be a good place to start. Figure out an appropriate portion for them to take on and require them to pay you each month. If they're late, they lose internet access or their phone until they can pay their balance. When they don't have enough saved to pay the bill, offer work opportunities for them to make money.

Once they take responsibility for their first monthly bill, you can also share how you manage the household's finances. Show them what it's like to keep multiple bills organized each month, make payments by writing checks or setting up auto-pay. Then explain how late payments can lead to fees, affect your credit and (just like with their phone) get services shut off.

Bottom line: Parents can help their children understand how much it costs to manage a home and the importance of paying bills on time. It'll give them a head start well before they're at college or living on their own.

Comments

 +   4 people like this
Posted by resident, a resident of Downtown,
on May 10, 2017 at 3:57 pm

Excellent article! The entitled kids of wealthy Pleasanton are given everything and never have the obligation to earn any of it. I had to earn my extras and was never paid an allowance just for contributing to the chores of living. No one should get away without the responsibility of helping around the house and they do not deserve payment for it either. My sister was not responsible about turning off the lights and the heat in the house so when my parents got a huge bill she had to pay it off with her babysitting money -- for nearly a year. Never again did she act so carelessly. By the time I entered high school I had to sit down twice a month with my Mom to watch her pay all of the bills. And I was well aware that my Dad did not bring home 100% of his salary -- so few kids, and even adults, seems to understand the concept of taxes. Credit cards were paid off in full every month, and I had to work out the math over what would happen if only a minimum amount was paid. How many college kids get their first credit cards and charge away with no thought of how they will ever pay it off? Just stupid.

If even ten percent of the Pleasanton parents taught their kids anything about money it would surprise me. These parents simply give their kids everything with no strings attached and no expectation that their kids will ever consider the cost of anything. I have no sympathy for people who whine that their children will never be able to afford to buy a home. Probably not, they have no sense of fiscal responsibility and the ones to blame for that are the indulgent parents.


 +   2 people like this
Posted by Cholo, a resident of Livermore,
on May 11, 2017 at 8:29 am

Your post is EXCELLENT "resident". Thank You. Money does indeed make the world go around and it requires that informed/educated individuals & families be responsible.

way to go "resident"....gracias!


 +  Like this comment
Posted by Jeb Bing, a PleasantonWeekly.com blogger,
on May 11, 2017 at 9:51 am

Jeb Bing is a registered user.


 +  Like this comment
Posted by res2, a resident of Birdland,
on May 11, 2017 at 12:25 pm

res2 is a registered user.

Now if only our elected officials had some training/experience in managing money!

Our politicians seem to only have experience in signing the back of checks


 +  Like this comment
Posted by Michael Austin, a resident of Pleasanton Meadows,
on May 12, 2017 at 5:57 pm

Michael Austin is a registered user.

Democratic politicians are tax and spend, tax and spend.
Republican politicians are cut taxes, save money.


 +  Like this comment
Posted by Jeb Bing, a PleasantonWeekly.com blogger,
on May 15, 2017 at 11:04 pm

Jeb Bing is a registered user.


Sorry, but further commenting on this topic has been closed.

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