Money Management Skills For Kids
By Dawn Goldberg, Fri Dec 9th

I have a confession to make. I had no money skills growing upwhatsoever. My parents lived paycheck to paycheck, and my motherfrequently agonized over how to buy groceries for the week.Because of our financial situation, there was rarely money for"extras" - going bowling, vacations, toys, books. Heck, webarely had money for necessities like clothes. When I wasfifteen and old enough to work, I became responsible for buyingmy own clothes. As a teenager (and, don't forget - a girl!), Ispent my money on outer clothes: shirts, pants, and the like.Underwear? Heck no! I wasn't going to spend my money on such afrivolous item as underwear.

As an adult now, I realize that not only did I not learn themoney management skills I needed, but also that I learned somethings I shouldn't have. Things like underwear aren't important.To this day I still have a hard time spending money on underwearand bras (although I recently bought three bras! Yea me!However, I have to admit that I still didn't like spending $40apiece on them).

My mother shouldn't have shared quite so much with me; I grew upafraid to ask for anything that might involve money. It affectedme in several ways, the most significant being that I onlyapplied to two colleges. Since I had to pay the application feesmyself (and working at a drugstore didn't give a teenager THATmuch disposable income), I had a limited budget. This articleisn't supposed to make you feel sorry for me (I'm very happywhere I am today - even with old, ratty bras), but to drive homehow important it is to teach our children good money managementskills.

Two years ago we implemented an allowance system for our girls.Once a week they get the dollar equivalent to 1/2 their age, andthat amount is divided as follows: - 20% to the of theirchoice - 40% to savings - 40% to disposable income.

Charity - Every six months, the girls pick a charity, and theydecorate a jar with a picture of the particular charity. Eachweek, the money goes Plop! into the jar. So far we'vedonated to the National Zoo

(pandas for six months and fishingcats for another six months), the National Disaster Search DogFoundation, and Red Cross (for Hurricane Katrina relief).Picking the allows them to really think about theparticular organization and their needs, and sometimes they'lldonate extra money to the charity. And we match the donations aswell.

Savings - We tell the girls that savings (essentially theirpiggy banks) are for long-term, big, important goals. I imaginethis to be used for things like a school trip to Europe, downpayment on a first car or house, or extra money for college.After six months, we count the money and then take it to thebank to deposit in their very own accounts. Disposable income -This is for the girls to spend as they will. The first time theygot allowance they spent it all on toy machines, and I had toalmost physically hold my husband back as he tried to stop them.I wanted them to see what happened when they spent all theirmoney, and feel what it was like when it was GONE! They've sincegraduated from that impulse to spend, spend, spend, and now theyvery consciously and determinedly save their disposable incomefor bigger things (like Barbie dolls or the current favorite,Sweet Streets. Yes, I have girls!).

We've found that the girls already have a strong understandingof money, from basic math (how many dimes are in a dollar) tothe more complicated concept of interest (we go over their bankstatements for their savings accounts together).

I'm happy to know that we're establishing a strong foundationfor their money intelligence, and that they'll never shy awayfrom buying underwear.

Copyright 2005 Dawn Goldberg. You are welcome to use thisarticle online in electronic newsletters and e-zines as long asit remains complete and unaltered (including the "about theauthor" information).

About the author:Dawn Goldberg is a Certified Virtual Assistant, COO of AssistUniversity, mother, community leader, and former teacher. Hervision is to create a resource that helps parents find ways toenjoy valuable, constructive time with their children every day.Contact her at info@afterschoolsnacks.com or visitwww.afterschoolsnacks.com.