"Money File"-Money Management Summer School
Wednesday, May 14, 2008SUSIE GHARIB: In the "money file" tonight, there's no time like the present to begin your child's financial education. Here's Terri Cullen, personal finance columnist at "the Wall Street Journal."
TERRI CULLEN, COLUMNIST, THE WALL STREET JOURNAL: With the school year starting to wind down, most kids are looking forward to summer recess. But just because school is out doesn't mean there aren't lessons to learn. The summer months can be an excellent time for parents to teach kids about managing money. If you don't already give your kids an allowance, consider starting now. The best way to introduce kids to the concept of receiving, saving, donating and spending money is by giving them a consistent income by way of an allowance.
The summer months bring lots of opportunities for parents to encourage children to use their allowances to save and spend wisely. Planning a summer vacation? Encourage your child to save their own vacation spending money by offering to match their savings dollar-for-dollar. Many parents will be surprised to find that when kids have to spend their savings, they often spend a lot less.
What about summer chores? Some parents balk at tying allowances to household chores, but I'm all for it. Being paid for chores by way of an allowance helps to make the concept of money tangible for kids in a world where money usually changes hands electronically. Summer is also a great time to encourage kids to be charitable. If your kids want to set up a lemonade stand, suggest they set aside a portion of the money to give away to a charity of their own choice. In addition to encouraging their inner entrepreneur, they'll discover the joy of helping others. That's just the kind of summer school lesson any kid can enjoy. I'm Terri Cullen.
