Kids & Money

Will It Motivate Them Or Corrupt Them?

Like it or not, we live in a capitalist society. (Most of us seem to like it just fine.) A lot of our values are reflected in the way we earn, save and spend money. So if you want to teach those values to your kids, you need to teach them about money how it motivates people, how it requires making choices, and how it can lead us astray.

We recommend focusing on the basics: live within your means, save part of what you earn, and consider sharing some of your money with others.

Like most of life's lessons, these are best taught through hands-on experience. Your kids can't just hear about making choices. They have to feel the frustration of wanting more things than they have the means to buy, and they have to go through the process of making those choices for themselves. That's why an allowance is an important instructional tool. (And you thought it was just a drain on your bank balance.) But it's not your only instructional tool. We'll cover a few more along the way.

It's not our intention to turn your kids into CPAs (although that's not necessarily a bad thing; of course, it's not a guaranteed good thing, either). We just want to point out how many ways money intersects with their lives. And when it does, we want to help you make sure it's not a serious collision.

Teens & Money - CAUTION: Contents Unsuitable for Parents

Read this introduction and then turn the mouse over to a teen you know. If you take these two clichés--money doesn't grow on trees, and the fruit doesn't fall far from the tree--and shake them up, you have the reason we've got a topic called "Teens and Money." Your teen is probably asking you for money even as you try to read this paragraph. Maybe you don't have your own kids, but you've been known to give money to a niece or a nephew, or a friend's kid. Raise your hand if you have never told a kid that money doesn't grow on trees. Because you hate financial planning and everything associated with it, chances are that kid you're thinking about right now doesn't care for it much either. Kids learn by example, after all.

Most high school students would flunk a test on money management. That‘s right! According to a 2002 JumpStart Coalition study of 4,024 seniors in 183 high schools across the country, only 4 percent of the students passed a test about basic money management. The average score on the test was 50.2 percent, down from 57.3 percent in 1997. Yet today‘s teenagers are part of the wealthiest generation ever.

"Teens & Money" is written from a teenager's point of view with lots of quick tips on how to take action in several areas, from budgeting and first jobs to saving for college, using a bank and the importance of saving. Show it to your kid (or other teens you think could benefit from some basic money talk) and they'll see that the information is friendly and makes sense. What's more, it doesn't sound like some 50-year-old accountant wrote it.

Growing Family - Just Had A Baby? (The Bills Will Be Coming Next Week)

Nothing will change your life quite like a baby. It will literally become the center of your world. You'll probably find yourself smiling a lot more and sleeping a whole lot less. All your priorities are about to change. And so will a lot of your expenses.

A big share of your resources will now be redirected to the newest member of your family. And we'd like to help you prepare. There are tax write-offs you can take advantage of that will give you some significant breaks. There's some work you should do too. You need a will, if you don't already have one, and a budget would be nice too.

You'll Be Needing An Extra $9,500 A YearAccording to a study by the U.S. Department of Agriculture in 2002, the cost of raising a typical kid is about $9,500 per year. That's $170,500 to age 18 (only if your kid is typical, and we know your kid is way above average). Shelter accounts for 33 percent of that total and food 15 percent. Those figures represent the projected cost for a two-parent, middle-income family with one child. As you might expect, it costs less per child as you add children to your family--about 23 percent per child, in fact. The good news for parents in the Midwest is that it will only cost $160,700 to bring up baby, whereas parents in the western United States will end up paying about $186,700.