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Top 10 Money Tips for Parents

By Jeff Eusebio

“But why do I have to wait two weeks?” said my 12 year old son. “O, come on, please! I really want it and I won’t want anything else for a long time!” This was almost a weekly ritual in my house as my son would look through the Sunday ads for good “deals.” We had tried many things, including a mandatory two week waiting period, but nothing seemed to really help.

This is why we created FamilyMint, and within it we built a system of goals and delayed gratification that changed my kids’ habits once and for all. In the process, through our own families and users of FamilyMint, we have learned what works. Here are my top 10 tips:

“What we need to learn we learn by doing.” – Aristotle. Experts say there are three learning styles—listening, seeing, and experiencing—but all of them are reinforced by doing what we learned over time. Children learn by doing, so don’t do for your kids what they can do for themselves.
Personal responsibility is key. Give kids responsibility to manage a particular expense category with their allowance (such as entertainment). Through this they will experience what it means to have a budget, plan ahead, and take ownership for decisions.
Start early. Most financial literacy education is provided in high school, if provided at all. This is too late. A 5 or 6 year old can pick up the basics of money and we’ve seen them thrive first hand when given the opportunity to manage their own money.
Set goals. This is fundamental to getting a child comfortable with delayed gratification. Whining for things is replaced by a new conversation: “You want that iPod? Sure… just create a goal for it and you can buy it once that goal is reached.”
Don’t spend it until you have it. This was the societal norm prior to the advent of easy credit and ties in well with tip #4. Money gets more people into trouble because it’s not looked at as a limited resource. “If I have credit, I can get it.” Waiting until you can pay for a purchase outright is a good habit to start forming early, because the credit habit can be very hard to break.
Pay yourself first. This popular saying is easy to remember but can be hard to put into practice. Make it a natural instinct for kids by having them save a portion of every dollar they receive for long term goals. Elizabeth Warren, selected by President Obama for the new Consumer Financial Protection Bureau, wrote a book called All Your Worth in which she suggested a 50/30/20 distribution. 50% of your money should go to needs, 30% to wants, and 20% to long term savings. This can be done manually by kids using envelopes or 3-walled piggybanks, or automatically with the FamilyMint Savings Plan.
Motivate to save. Incentives are a great means of motivation and driving behavior. Interest rates, although not very motivating today at < 1%, provide incentive to keep your money in an account. Companies match their employees 401K contributions to encourage saving for their retirement. Parents can do both of these with their own children by providing motivating interest payments so kids can learn about the time value of money and by matching their kids deposits towards long term savings goals like college. FamilyMint is designed to allow parents do both of these easily and conveniently.
Create teachable moments. Kids learn many of their money habits from their parents. Parents just need to know the basics to set the right foundation for their kids, including the importance of savings and setting goals. Parents can help create teachable moments by pulling their kids into their own money-related conversations or perhaps letting them help pay the bills. Even if it’s just opening the envelopes at first, kids can actually enjoy this! The key is letting kids know there are obligations that must be met on a monthly basis as well as unplanned events that need to be budgeted for. Open a youth savings account and walk through the statements together when they arrive. A few weeks after your kids make a purchase, ask them how they feel about the purchase now. This will help them reflect on their own behaviors and alter course down the road.
Let mistakes happen. Mistakes are teaching and learning opportunities. Let them happen. Your child may learn a much better lesson from spending their own money on something unnecessary than you telling them it would be a waste of money. It’s also much better to let mistakes happen when they are young and the impact is smaller.
Don’t be a money tree. End the Age of Entitlement at your house. Find ways for kids to work for money. It’s good for them! I’ve told my kids to find something around the house that needs to be done and then make me an offer. When they have worked for their own money they will think much longer before handing over their cash for a purchase.

Motivate and encourage kids to build financial skills and habits. These skills and habits will serve kids the rest of their lives. Soon you’ll have confident, money-smart kids!

A Scary Thought – And How I Fixed It

By Jeff Eusebio

The biggest money lesson I am passing along to my kids is how I act on a daily basis.

This thought used to strike a bit of terror in me, especially when I saw how some of my kids’ money habits were turning out. They were watching and listening and forming their own habits unconsciously by what they were seeing me do every day. If I would impulsively purchase something because a deal was “too amazing to pass up” (and I love a good deal!), I would start to see that infectious and impulsive behavior come out in some of them. They look where I look, they act how I act, they save how I save, and they buy how I buy.

Some recent reader comments we’ve received have been along the lines of “my kids are too young to learn about money management… they really don’t have an interest yet… maybe when they are older”. The reality is it’s hardest to start when they are older. Wait until they are teens and most of their money habits will already be formed. It’s possible to change these habits of course, but it requires an even higher level of discipline, consistency, and planning on behalf of the parent or teacher. If they are old enough to count, they are old enough to start learning the basics.

FamilyMint helped me as a parent to be that good example for my kids. The FamilyMint app became a third party resource that helped me teach my kids the basics by forming new daily habits. With goal setting being front and center, my kids were quickly creating new goals and saving for them rather than asking me if they could have it “now”. It was instantly able to help them save along the way using the Matching feature to match deposits “dollar for dollar”, $.50 on the dollar, or any variation I’d like. The whining about “I want this, and I need that” also stopped right away once I redirected them to start setting and working toward their own goals.

Setting and working to achieve financial goals also inherently teaches the concepts of delayed gratification, prioritization, and self-confidence once the goals are reached. Make this the natural way that your kids manage their money and goals on a daily basis and so much will take care of itself.

Another amazing thing happened; the more I focused on forming these good behaviors and habits in my kids, the more I started to take them on as my own habits and behaviors. There are so many easy lessons that can be taught when kids are just old enough to count — and both kids and parents will benefit.

The good news is those scary habits that I mentioned earlier are almost gone now from my kids. Part of it is changing how they think about their own money by the habitual processes built into FamilyMint, but a good dose of it was me picking up these habits myself and making them my own.

Self Control is the Real Lesson of Budgeting

By Jayne Berkaw

“Right now I have enough money to last me the rest of my life – unless I buy something”

- Humorist Jackie Mason

Anyone who can relate seriously to Jackie Mason’s quip has never been taught how to budget. As parents, we have a responsibility to build our children into adults who don’t just cope, but thrive. A lot of it boils down to teaching them self control in making good daily decisions, including how they manage themselves – and how they manage money.

Everyone has their own approach to parenthood, but there is no replacement for teaching your kids how to thrive by showing them how you yourselves thrive. Talk to them about the expenses you manage, like mortgage/rent payments, utility costs, phone bills, food and other regular expenses you must plan for each month. Then talk to them about the “things” you want to have and how you plan to save and pay for those variable expenses. If you’re saving for a 60” plasma TV, talk it over with your kids. Explain how much the TV costs, how much you are saving for it weekly and, at that rate, when you will have enough money to make the purchase.

Take the mystery out of the family finances by sharing the basics of the family budget with your kids. Talk to them when you’re in the store, at the dinner table, whenever a “teaching moment” presents itself. Then get them started on their own budget through an allowance.

With an allowance, you and your kids can set up fixed “costs” like savings and charitable giving, and variable costs like treats and snacks, toys and movies, etc. You can allot a percentage of their allowance to each budget item, and you can review progress regularly. With FamilyMint, you can break savings down into goals like college expenses, computer/technology wants and needs, or even savings for a new bike, video game or snow board. You can show them how saving a bit more each week will help them reach their goals earlier. They can move their funds around to make that happen in a colorful, fun virtual environment that will keep them coming back!

You want your children to have enough money to last the rest of their lives, so keep them grounded in the reality of financial limitations and responsibility.

A View from the Other Side

By Jayne Berkaw

When I first told my husband about FamilyMint, he couldn’t believe what a great idea it was. “I wish we had had something like that when our kids were young,” he lamented. We have four, and they are adults now; two with kids of their own, one in law school (on his own dime, but that’s another blog) and one in undergrad (another blog).

Today’s kids glob on to computer-based programs like it is genetically engineered into their DNA, so dated “tools” like the envelope system we used, piggy banks, etc. don’t capture their attention. And what’s worse, they focus only on the money, and not on what the money can do. Even our envelopes marked “charity” (for what cause, when/how to donate?) and “savings” (to what end??) missed the mark by a mile, even though we were at least trying.

I’ve asked a few people with younger kids why they aren’t on FamilyMint and a typical response is that they have bank accounts. Yes, we had those too, but unless you handle that really well, your kids learn nothing about planning, budgeting and goal setting and even less about the mechanics of making it all work. They do get pleasure seeing the number rise in their little passbooks when they make a deposit (the itty bitty interest they receive isn’t worth talking about). But that’s a fleeting moment compared to the “I’m in charge of my own destiny” sense they get from a program like this that draws them in with its intuitive design, engaging graphics and smart features.

Obviously, I’m a fan of this concept, and if you’re on this site, you feel the responsibility for putting your kids on the right path in life and have an understanding of how many issues and problems can be avoided later in life with an early understanding of how to manage money. As grandparents, we will be gifting FM to our grandchildren as soon as they are age appropriate, but how we would have loved to have it sooner!

When It Comes To Money…Why Aren’t We Doing Better For Ourselves?

Statistically, we as adults don’t do very well when it comes to managing our own money, so are we laying the right kind of foundation the generations to come?

Watch this video a find out for yourself. Real statistics. Real solutions.

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“What we have to learn, we learn by doing” -Aristotle

Teaching Kids to be Money Smart

By Bob Masterson

Creating money-smart kids doesn’t happen overnight. It’s a skill and a behavior that has to be nurtured over time. The skill lies in learning the value of saving, giving, and spending conscientiously and understanding the difference between wants and needs. The behavior comes from the habits formed in doing these things over time and learning from mistakes.

The earlier you start your child on this journey, the better. Children quickly grasp the concept behind spending money and soon their appetite for things can be insatiable. How can we best instill in our children the value of money and living within one’s means?

This is just an excerpt from an article FamilyMint recently had published in The Old Schoolhouse Magazine entitled “Teaching Kids to be Money Smart”. Click here to read the rest of the article.

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