Jeanette A. Tucker | 4/19/2005 10:28:32 PM
Summer breaks from school often expose children to more television and advertising, to more siblings and friends and to more temptations to spend money. Parents may be at their wit’s end, says LSU AgCenter family economics professor Dr. Jeanette Tucker.
Parents ask, "Should we give our children an allowance?" "Should our youngsters have to work for the money they have?" "How can we help our children learn about managing money?"
Tucker says children learn about money from those around them. They watch their parents spend money and learn from them. They watch their siblings and friends and are influenced by them. They watch television advertising and are encouraged to buy the latest toys and gadgets. Yet, research indicates that parents are generally a child’s greatest financial influence.
Although it takes years for children to develop a sound sense of money and how to use it, summer provides a perfect time for parents to lay a foundation for children to form positive money management skills, according to Tucker.
"Parents can help their children understand and learn money management skills by including them in appropriate discussions about money matters, such as the cost of summer swim club membership or a new television," the family economist says. She adds that parents can demonstrate good money management skills, such as wise use of credit and prompt repayment of bills.
"Children need to learn how to earn an income and evaluate the way they spend it," Tucker emphasizes.
Allowances and earnings can be very effective tools for helping children learn to live within their means. One of the best learning opportunities a child can have is to experience not having enough money to buy everything that he or she wants. This experience allows the youngster to learn the concept of scarcity and how to make spending choices and live with the consequences.
Children often purchase items that parents consider useless, irresponsible or of poor quality. When that happens, Tucker says, "Remember, it is important for children to learn from their own mistakes without your criticism. Experience, both positive and negative, is a great teacher."
Tucker recommends that allowances begin as soon as children are capable of counting money and understanding the principle of exchanging money to buy things. Coach your children and give them guidelines as they learn to manage their allowances. The allowances should be large enough to cover their needs, such as school lunches, plus some money for personal use, savings and sharing, such as charitable contributions. The amount should increase as children grow older and their needs change. To encourage savings, consider matching a child’s savings, like an employer matches a worker’s 401(k) deposits.
Parents face several alternatives if their children run out of money before the next allowance. One option is to let them learn from mistakes and do without. Another option is to lend the needed money with an agreement prior to the loan on a repayment schedule and, perhaps, interest.
Older children frequently want to earn their own money. They enjoy the independence of earning rather than asking for money. Employment can help your child develop a responsible and positive attitude toward work and provide an opportunity to understand money in terms of the time, effort and skill required to earn it.
"One caution about work, however, is that paid employment should not consume all of your child’s time," Tucker advises, explaining, "Kids also need time for school activities, studying, sleep, family responsibilities and fun."
Research suggests that 15 hours or less of paid employment per week is best for most high school students during the school year. Like everyone, children need a reasonable balance in their lives.
For information on related family and consumer topics in family, housing and nutrition, visit the FCS Web site at http://www.lsuagcenter.com/Inst
/Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.