• Give your kids an allowance and encourage them to use it as they see fit. It’s one thing for your daughter to ask you to buy her designer jeans, but it’s quite another for her to pay for them with her own money. Letting your kids choose how to use their allowance helps them place value on money. As your children get older, their allowance presents a great opportunity to learn about budgeting and making choices.
• Talk with your kids about financial trade-offs. Explain that you’re forgoing an expensive vacation in order to put some money away for the future, for example.
• Give them an incentive to save. An effective way to do this is to match your kids’ savings. For example, you could contribute 25 or 50 cents for every dollar they put in their savings account. You can also teach them that once they’re grown and out on their own, it’s likely their employer will make matching contributions like this to their savings in a company-sponsored retirement plan.
• Involve your kids in household financial management. At the grocery store, for example, ask your kids to comparison-shop for cereal. Older kids can help you with administrative tasks like bill paying, so they can get an idea of how much money it takes to run a household.

 

 

Helpful Links

Read what Carrie Schwab Pomerantz has to say about:

• One mom’s dilemma over giving her college-age daughter an allowance
• Encouraging kids to save early

 

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and are not intended to represent results you should expect in the future. Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.