Having money is crucial to obtaining the things we need in life, and having extra for the wants is nice, too. However, money problems can occur when parents don’t teach money management skills to kids at a young age, usually when the child starts getting an allowance or has a job, such as babysitting or mowing lawns.
When credit card offers start arriving in the mail, they are an easy fix when there’s no more money left. Teaching your children about money, as well as credit cards, can be easy and even a fun experience, but most importantly, a very valuable lesson.
Neena Viamis, president/co-owner of A and N Mortgage Services, Inc., says that her father instilled the importance of financial health as she was growing up and has met with a financial planner every six months since she was 24 years old. Now that she has children of her own she is teaching them. I caught up with Viamis to find out her money savvy secrets and tips for teaching kids about money now, so they don’t end up having problems in the future.
How young do you start to talk to your children about money? I started showing my oldest when he was 6, although he didn’t grasp the concept until he was 7, and then it really kicked in at 8. My kids have now grasped that what they are doing in the house costs the household more money.
How did you know when it really sunk in? My son started turning off the lights when he’d leave the room – he didn’t want to be wasteful. He also couldn’t believe that we pay for water out of the faucet. Kids become more responsible when they see how much things cost.
You have three children ages 8, 6 and 2. Are they all learning about money? Yes. They have two piggy banks each, one for saving and one for spending. They use their own money to buy what they want and they know how much it takes to contribute to their college savings.
How do you handle allowance? I give them an allowance based on the items in the household, taking out the trash will earn them .50, washing floor .75 based on time it takes to earn the money. They also receive the money right after doing the chore for instant gratification. We have a chore chart in our house. All the chores need to get done in a week. They pick which item they want to do based on what they want to do, thinking of the deadline. If garbage isn’t taken out by Monday, they’re seeing short-term. To teach college and future, you want to plan it out and give them an amount and a deadline.
How much time do you spend with your children going over your expenses and household finances? We have a weekly scheduled meeting. I’ve learned that if you don’t stick with your routine, even for just five minutes, the kids won’t understand the importance of finance. If you don’t stick with your plan, your kids won’t plan for the future. My kids know the difference between rich and wealthy…enough so you aren’t paycheck-to-paycheck; wealthy generates own income. You want to educate them now, how to save for the future.
We also have a rewards box. When they finish homework and chores, at the end of the day they get a prize out of the box. Because of that, im not putting the kids in time out, but rather rewarding them for doing a better job, it’s positive, positive reinforcement works.
What are you doing to help other kids learn about finances? At my company, with A and N Kids Club, we have different parities and events at Halloween and give each child a backpack so they get promotional items and information on saving money.