Teach your children about good money management

(ARA) - Children learn the basics - math, English and science - at school. But when it comes to learning about saving and spending money wisely, the lessons begin at home.

"Helping children understand finances is very important, so that when they graduate and live on their own, they can fend for themselves and be financially secure both in their daily lives and their future," says Nick Fyntrilakis, assistant vice president of Community Responsibility for MassMutual, at Massachusetts Mutual Life Insurance Co., Springfield, Mass.

According to a National PTA article on FamilyEducation.com, "money gives people -- both young and old -- decision-making opportunities."

"Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend," the article says.

Here are some tips to help you educate your children about good money management:

* Help them establish a savings account.
Children accumulate money in many different ways - ranging from birthday presents to jobs they've organized like walking a neighbor's dog or mowing lawns. But putting that money into a piggy bank doesn't do anything. Explain about interest, and find a bank or credit union that offers accounts that don't charge monthly fees, don't require a minimum account balance, have good interest rates and are insured by the Federal Deposit Insurance Company (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF).

* Set a budget - both for yourself and your children.
Children follow by example, and you can make a good impression by showing them how you stay within a budget - whether it's for food, utility bills or fun activities. Help your kids establish a budget, and explain the differences between needs and wants.

* Make it fun with an app.
Check out Save! The Game, a free app parents can help their children download from iTunes for a fun "needs vs. wants" game. Also, consider speaking to children about establishing a savings plan, and how much of their income they should put away for the future. This is a good time for them to plan for larger upcoming expenses like owning a car, paying college tuition or renting an apartment.

* Discuss ways your children can add to their income.
Determine if you want to establish an allowance, or encourage them to be an entrepreneur and start their own business: set up a lemonade stand, wash cars, mow lawns and rake leaves, clean garages, babysit, etc. Helping them develop a good work ethic when they're young will also help them foster excellent employment skills when they join the real world as adults.

* Encourage them to contribute back to society.
Children may have an organization close to their heart or family they want to support. Visit MassMutual's Time for Kids website (www.TimeForKids.com/RightMoney) to see how they can narrow down the list of numerous non-profit organizations in the United States to just a couple they might have an interest in.

"Talking with your children at a young age about money matters will help them establish good financial skills before they're ready to enter the world as an adult," says Fyntrilakis.

Visit MassMutual's family finance website (www.MassMutual.com/FamilyFinances) for more education tips you can pass on to your children, and for up-to-date tips and calculators for adults as well.

Courtesy of ARAcontent

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How to Teach Your Kids Smart Holiday Shopping

(ARA) – Commercialism runs rampant during the holiday season. But all the hustle and bustle that goes along with gift giving is a great opportunity to teach children how to shop for gifts and manage their money.

“Children love giving and receiving gifts. By getting them involved in the gift buying process, you can make it a valuable learning experience, too,” says Scott Oberkrom, director of Community Investments at American Century Investments. “The best way to teach children about money is with real-life scenarios they can comprehend. Purchasing gifts for their friends is a great opportunity for them to learn.”

YesYouCanOnline.info, a Web site that helps parents teach their children good financial habits, offers the following ideas when preparing for this year’s gift giving:

The first step is to set aside money each week for a gift fund. This might be a good time for your child to set up a savings account. Depending on the balance, they might even earn a little interest. Help them learn to split their allowance or other income between fun money and savings.

If their normal allowance isn’t enough to buy gifts for everyone on their list, discuss ways they can earn extra money for their fund, such as raking leaves, babysitting or doing other neighborhood chores. You might also explain how to cut back, such as skipping weekly trips to the candy store so they can purchase a gift for their sibling instead.

As they save, sit down with your child and make a list of people with whom they would like to exchange gifts. Do they really need to give presents to their second cousins or their tent mate from summer camp? The more gifts they give the more money they need to spend. Instead of giving gifts to everyone, they can always make a homemade craft or send a holiday card.

After your child has some savings and determines who they want to give gifts to, it’s time to head to the store and do some shopping. This is a great learning moment for children to start comparison shopping. To help kids understand comparison shopping, ask these questions:

* Is this the lowest price for this item?
* Can it be negotiated?
* Are coupons or discounts available?
* Is it worth paying a little more for a gift that is environmentally friendly or supports a local merchant?
* Is the gift a worthless trinket that will break or high-quality with long term benefits?
* Does the store, in person or online, provide gift wrapping or free shipping?
* If your child’s friend doesn’t like the gift, can it be exchanged?

“By starting early and spending their own money on gifts they choose, kids really get involved in the gift giving process while learning valuable financial lessons along the way,” says Oberkrom.

Courtesy of ARAcontent

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