A few months ago I wrote about Doughmain.com, and how their online tool can help parents organize and track allowances and related chores for their children.
As a follow-up to yesterday's post about teaching financial lessons, here are a few tips for other summer activities by Ken Damato, the founder of that website:
1. Create a family match plan for savings — To encourage smart saving habits and help your child build savings, create a matched family savings plan, similar to a 401K you have at work. You, as parents, act as the company and match your kid’s savings contributions. Also discuss how the money they have saved throughout the summer will allow them to continue to do fun things throughout the year or prepare for their future.
2. Use allowance as a teaching tool — Allowance is a great way to prepare your kids for real work experience when utilized as a form of income. Allowance money can be given each week in small bills or coins that can be divided into three clearly marked envelopes or containers for saving, spending and giving. Decide in advance on a set amount for each category. Consider putting the largest amount into the savings envelope so kids can see how their money adds up over time.
3. Encourage odd jobs — Have your kids take on “odd jobs” to earn spending money. Help them seek opportunities with neighbors or family friends to babysit, cut grass, wash cars, or help out in other ways. This is a great way to start earning money for kids that are not yet of working-age.
4. Build smart spending habits — It is a great idea for your kids to establish savings goals this summer. Encourage your kids to save up for one purchase at the end of the summer instead of making small, impulse purchases throughout the summer, whether it is a trip to an amusement park or a souvenir on vacation. Whatever it is, it will be a rewarding and educational experience for your kids.
5. Create budgets — Help your kids learn the importance of budgeting and the costs behind their favorite things by allowing them to take part in creating your family budgets. For example, as a group, create a budget for a trip to the local fair, including admission fees, travel expenses, food, souvenirs, and other costs. While you are at the fair, have your children track your purchases. After the day is over, help compare their list of expenses with their budget to see if they stayed within their means.
6. Play games — Yes, that is right — play games! There are many great financial literacy games out there that teach basic money skills your children will need to succeed in the “real world.” While your kids have free time this summer, have them try playing some of the online games that are available to them for free, like TheMint.org, TheFunVault.com or SandDollarCity.com.
7. Promote financial responsibility — The summer is a great opportunity for your teens to take on a few financial responsibilities. Maybe have them assume responsibility for their cell phone bill or gasoline expense for the summer. Perhaps you provide the money, but your teen is responsible for paying the bill on time. Pick what works best for your family, and try to stick to it.
8. Assist in the summer job search — Finding a summer job is a daunting task for your teen, especially if it is their first job. Help your teen by assisting them in their job hunt. Start by looking in your local paper’s job listings or ask around to see where others in your area got their first job. Use their first pay stub to explain deductions like taxes and social security.
9. Give your teens a prepaid card — Instead of emptying your pockets each time your teen needs money, put a lump sum on a prepaid card for the summer. This will help your teen learn how to budget and manage their money in a safe and controlled environment. Use this opportunity to teach your teen the difference between credit cards and debit cards.
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