MAKE ¢ENTS
c a p i t a l b a n k • w i n t e r 2 0 1 4 • S A V IN G TIP S
seven ways kids can earn money
(from themint.org)
Sometimes, the things you want cost more
money than you have. What do you do? You
can either save up by not spending on other
items, or you can try to earn some extra money.
With a little work, creativity and an okay
from your parents, you can start adding to
your piggy bank. Here are a few ideas to get
you started:
1. Help out more at home. Ask your parents
if you can help with any big projects around
the house: cleaning or organizing the garage,
basement or attic. Or you can help tidy closets,
straighten up the laundry area ...
2. Help people take care of their yards. Tell
your neighbors that you would like to be their
helping hand. Offer to help with grass-cutting,
snow shoveling or leaf-raking. You can pull
weeds, water lawns, or pick up branches.
Make flyers and drop them off at houses in
your neighborhood.
3. Wash cars. Turn your driveway into a neighborhood car wash.
4. Babysit little kids. Once you’re legally old
enough, take a babysitting class. Local hospitals usually offer these classes. Parents are
always looking for a good sitter.
5. Start a dog-walking service. Feed, watch
or walk dogs. If you’re really responsible, you
might offer to care for other people’s pets
while they’re busy or away from home.
6. Sell unwanted items. Set up a “rummage
sale.” Some parks and schools hold big rummage sales. You could be a part of them.
Some stores sell “used” toys and clothes. Ask
your parents about this idea. They can help
you find a store in your neighborhood.
7. Sell candy or bakery. Bake some cookies
and brownies, and sell them at events.
top 5 money
concepts
(from life.familyeducation.com)
Save for a rainy day: From the
time your kids are old enough to
desire toys, books, and other entertainment items, you should teach
them how to save for the things they
want to buy. Your child may want a
video game that costs $50, but
their allowance is only $5 a week.
It’s their choice: candy or comic
books today, or the more expensive
item a couple months from now.
You can help another way, by offering to pay interest if your child saves
part of their allowance with you, or
by matching part of their savings
if they start a bank account—say,
you’ll contribute $1 for every $5
they put in the bank.
Work hard for your money: Help
your child make the connection early in life that money isn’t something
freely given, but is earned through
work. If you choose to give your
kids an allowance, tie it to the successful completion of certain jobs
throughout the week. Age-appropriate chores and rewards are the key.
Understand a budget: Learning what a budget is, and why it’s
a good idea, is one of the central
pillars of financial literacy. The
best way to teach kids how a budget works is simply to show them.
One easy way to demonstrate this
concept is to take a stack of Monopoly money, and tell your child
(continued on reverse)
Member FDIC
scary financial habits
(from themint.org)
Findings from Northwestern’s recent Planning
& Progress Study underscored that talking about
money is a fear factor for
many Americans—shockingly. However, not having
conversations about good
money habits have even
scarier consequences in
the long term. Below are
a number of key principles that are the building
blocks of financial security
and should be reinforced early and often:
Lead by example: It is hard to convince kids
to delay gratification in favor of saving if they
see their parents regularly making impulse
purchases at the checkout or saying things like
“we don’t really need this but ... ” before buying
something. Motivate and celebrate restraint by
making a board on the fridge or elsewhere with
a barometer to track unnecessary items everyone in the family passed up and allocate the
money saved toward something significant for
the child or family—like vacation or technology.
This will help your child learn the value of strategic spending on items that may take longer
to acquire but will have much bigger and better
benefits than the whim of the moment.
Never too early to budget: A recent stat
shows only 18% of parents direct an allowance
specifically to be deposited into a saving account.
An allowance is the first
opportunity to introduce
kids to the all-important
concept of budgeting, the
cornerstone of a healthy
financial foundation. Sit
down with your kids and
explain to how you budget
for all the family expenses
and priorities. Create a
mini version of your budget experience by taking
out a small bit of their allowance for their contribution to food and rent/mortgage, as well as
for savings that will go into their piggy bank.
Whatever, they have left will be their “discretionary income.”
Having the savings talk: There seems to
be a financial disconnect between parent and
children. 54% of parents rated their teenager’s
knowledge of money management as either
“good” or “excellent,” but 78% of the children of
those respondents rated their own knowledge
of money management as merely average or
even poor. That disconnect might be the reason
why so many teens would rather eat out multiple times a week and leave little to no money in
their savings account. Encouraging a long conversation with your child or teen can be rewarding when they reach college or adulthood.
make your own weekly budget
(from moneyandstuff.info)
Money
How Much $ Do I Have?
Allowance
$
Birthday Money
$
Other Money
$
All of my Money Together
$
Things I Want to Buy
How Much Does It Cost?
1.
$
2.
$
3.
$
What It All Costs
$
Do I have enough Money?
$
How I Got the Money
Why I Want to Buy It
top 5 money
concepts, cont’d
(from life.familyeducation.com)
that the stack represents how much
money you make every month from
work. Then, divide up the bills one at
a time to show how much you spend
on the house, on food, how much you
save, or give to charities and so forth.
The denominations aren’t important.
What’s important is showing your children that you have a conscious plan
for your money, and that you’re on top
of the family finances. Encourage your
child to start a budget of their own.
Embrace the power of compound
interest: Compound interest simply
means that the rate at which your money
earns interest increases over time. Put a
penny on one side of a table, to represent an account bearing compound interest, and a dime on the other side of
the table, to represent an account bearing simple interest. Ask your child which
will grow to a dollar in fewer steps: the
penny, if you double it at each step, or
the dime, if you add an additional ten
cents at each step. The penny, representing compound interest, has grown
to $1.28 by the eighth step. The dime
has become only $0.80. The difference
will only continue to widen. This will help
your child to learn the importance of giving their money the time to grow in an
interest-bearing account. The earlier you
start saving, the better.
Beware of credit: Kids need to be
taught from an early age that credit
cards are not free money. Here, again,
you can give age-appropriate lessons in
how credit works by simplifying the concepts and acting as your child’s bank. If
your child wants an item that costs $20,
you’ll agree to extend credit, under the
following terms. There is a grace period
of one week, after which the interest will
start to accrue. The interest rate is 20%
per week. The minimum payment is $5
(or whatever their allowance may be). If
your child pays only the minimum, they
will end up paying $10.13 more for the
$20 item over a seven-week timeframe—
and sap their allowance every week. The
sad part is, these terms aren’t that different from the ones offered by the credit card companies!