How To Teach Your Child Good Spending Habits

How to Teach Your Child Good Spending Habits eloan PRESENTED BY 30% OF ADULTS HAVE HIDDEN CASH, A PURCHASE, A BANK ACCOUNT, A BILL, OR SÓME OTHER STATEMENT FROM A PARTNER ESTABLISH A HEALTHY FINANCIAL RELATIONSHIP WITH YOUR PARTNER 10.5% SAID THEY LIED TO A PARTNER ABOUT DEBT, MONEY EARNED, OR OTHER FINANCES It's easier for couples with a positive financial dynamic to create a platform for family discussion. Get on the same page as a first step in teaching your children. LET YOUR KIDS MAKE A M.E.S.S. Lay a strong foundation of basic financial concepts: Money, Earning, Saving, and Selective Spending. Begin with basic coin differentiation, and move on to teaching them to save with a simple piggy bank. Follow through by guiding early spending decisions. THE AVERAGE CONSUMER SPENDS O 12%-18% MORE WHEN USING CREDIT CARDS THAN WHEN USING CASH USE COLD, HARD CASH Handing cashiers credit cards and buying things online makes the concept of value unhelpfully abstract. Cash is a tangible $4 reminder of what costs a little vs. a lot. Use it whenever you can. MAKE THEM EARN THEIR ALLOWANCE Treat allowance as payment for regular chores or other help around the house- not a gift requiring no contribution. Giving kids money for nothing distorts the reality OF ALL PARENTS REPORT GIVING 55% ALLOWANCE TO THEIR CHILDREN 85% 66% 63% of what most adults will have to do: work SAID CHORES WERE A PREREQUISITE SAID MAINTAINING GOOD GRADES SAID MAINTAINING GOOD BEHAVIOR to earn a living. RESEARCH HAS PROVEN THAT COLLEGE DON'T AVOID TALKING ABOUT MONEY STUDENTS WHO RECEIVED STRUCTURED FINANCIAL EDUCATION AS CHILDREN PERFORM BETTER ACROSS THE FOLLOWING FIVE DIMENSIONS: Even if you are a disciplined saver and spender, your child needs active guidance in order to learn your good behavior. Give them a seat at the table when it's time to talk budgets, pay bills, and discuss big purchases. v Low materialism v Low compulsive buying v High self-efficacy v High future orientation v Financial risk tolerance eloan eloan.com Source: http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/ConsumerPolls/PDF/FinancialDeception+ExecSumm.pdf Source: Dun & Bradstreet Study with multiple references, including http://voices.yahoo.com/do-we-really-spend-more-credit-cards-195486.html?cat=3 and http://www.investopedia.com/articles/pf/08/pay-in-cash.asp#axzz28ZqElnhl; OR - The U.S. Census Bureau estimated that 191 million debit card holders would use 530 million debit cards in 2012. Source - http://www.census.gov/compendia/statab/2012/tables/12s1188.pdf Copyright © 2012 E-LOAN, Inc. All rights reserved.