Tips to help parents teach kids good money management skills

By The Associated Press

Tools

By Beth Boehne

Story Created: Jun 2, 2008 at 5:16 PM EST

Story Updated: Nov 24, 2008 at 5:44 PM EST

A new report from the Indiana Youth Institute found that many high school students struggle with money management skills. Here are some tips for parents to help their children acquire good financial habits.

CHILDREN AGES 4-7

— Assign real or play money values to tasks or extra chores. Children can later use the real money or redeem play money for rewards like staying up 10 minutes later or a movie night with popcorn.

— Set aside a decorated container to save money for a certain purchase, and talk to kids about putting aside a certain percentage of earned money to save up for a larger purchase.

CHILDREN AGES 8-12

— Talk about different saving options and accounts that pay interest.

— While grocery shopping, compare prices among brands and have children practice estimating what the total bill will be.

— Help children create an imaginary bank account where they can receive income and pay costs while recording the money going in and out of the account. At the end of every month, children can look at their balance.

— Play games involving financial skills, including Monopoly, The Game of Life and Presto Change-O.

CHILDREN AGES 13 AND UP

— Create a budget as if teens were living on their own and talk about summer job options.

— Once teens begin working, help them open a checking and savings account to get real-life practice using the accounts while at home.

— Discuss the importance of having good credit and how to get it.

— Visit car dealership Web sites to show teens how to estimate car payments, maintenance expenses and gas costs for various cars.

— Discuss wants versus needs.

— Visit financial Web sites to learn more about money management, take quizzes and play games.

Source: Indiana Youth Institute's issue alert titled "From Birth to Bankruptcy: Teaching dollars and sense to Hoosier kids."

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