Tips To Make You Kids Money Smart

Parenting Expert Dr. Michele Borba teamed up with Upromise® World MasterCard® credit card from Bank of America to talk about raising money-smart kids.

Today at 1pm on facebook.com/upromise Dr. Borba will be answering parenting questions.

When to Start Talking About Finances with Your Kids:
If your child can count to ten, he/she is ready to learn about money. Introduce coin recognition, counting coins, saving in a piggy bank, exchanging goods and services for money and the idea that money is the reward for working. By five year’s of age, most kids’ beliefs, values, and expectations regarding money are already well established, so start early. The piggy bank is the simplest way to begin because the child can see the money going into the piggy bank and will have to make the choice to save the money or spend it on items they want – they can only buy what they want if they save enough money first.

Teach Kids Budgeting while Back-to-School Shopping:
1 - Have your child make a list of needs and wants
2 – Set the budget for back-to-school shopping
3 – Take your child to the store with you and have them put the items in the cart or basket
4 – Have them go to the register with you and if the items are over budget, have them choose which items need to be put back on the shelf
5 – Have them double check the receipt
It’s the everyday moments that help us teach our children

Allowance:
One of the best ways for kids to learn to manage money and keep a budget is by giving allowances and this can start when a child is old enough to count, and can listen to talks about money. How much to give depends on your child’s spending habits and maturity, and your comfort level. But the keys to allowance success are these: Set a certain amount. Explain to your child what the allowance will cover (such as school lunches, movie tickets, makeup, and birthday gifts for friends or just nonessentials). Pay regularly at the same time and amount each week. And don’t bail them out! One rule of thumb on the amount is to give one dollar for every year of the child’s age. Another option: start with a certain amount and increase it by one dollar each year. But the #1 deciding factor should be what is affordable for your family. If money is tight, then have no reservations or guilt about announcing that an allowance is not feasible at present.

Prepare for Your Child's College Education:
The time to start saving for your child’s college education is now. While it may seem overwhelming, with programs like Upromise and the Upromise World MasterCard from Bank of America, which gives you 1% back in savings on all purchases that are directly deposited to your child’s college fund, you will be able to accumulate college savings over time without even thinking about it. By planning ahead you reduce stress for you and your child because when college comes and you need the money, it’s there. You are showing by example that their future is important and by sharing this information with your child at an early age you plant the seed for them to think about when they go to college and not if they go to college. The sooner you plant the seed for your child’s future the better the outcome.