Michael on January 17th, 2008
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My little girl–now four days old–still weighs less than the big bag of potatoes at the supermarket, but is much cuter. But in keeping with my “I just had a child, look at me!” theme, today’s post contains some useful suggestions from Pay Jr. on the topic of teaching children about money.

The best time to teach children about money is when they are children. Further, there’s never a better way to teach kids how to live Beyond Paycheck to Paycheck than by showing them; in other words modeling appropriate financial behavior yourself. That’s why, like Pay Jr., I am working with Jump$tart. If you live in New Hampshire, you (and your family), could see me this Saturday at Jump$tart’s Financial Fitness Fair. Regardless, check out these wonderful tips from Pay Jr:

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Start kids off with a good sense of earning, saving and spending money so they know how to use money down the road. Start with chores and allowances.

PAYjr’s Allowance Do’s and Don’ts

  • DO start an allowance early. The best time to start giving an allowance is when a child learns how to count money. A good rule of thumb is to give $1 for per week per age (e.g., $7 for a seven-year-old) on a regular basis, such as once a week.
  • DO write it down. Whether in crayon or on the computer, help set expectations by writing out how the allowance will be earned, and how much and when it will be given.
  • DO encourage an entrepreneurial spirit. If children need money beyond their allowance, encourage them to find and suggest ways to earn the funds, instead of creating unnecessary jobs so they can meet their goal.
  • DO allow kids to make choices. Let children decide what items are important to them and how they want to spend their money.
  • DO let kids make mistakes. Children will learn the value of a dollar if they are allowed to make mistakes with their allowance, such as spending all of their money too quickly or on a toy that doesn’t stand up to its advertising.

Now for the Don’ts

  • DON’T ignore savings. Use an allowance as a tool to teach both good spending and good saving habits. Encourage kids to save a portion of each allowance payment, ideally in a kid-friendly, interest-bearing savings account, working their way up to saving at least 10 percent.
  • DON’T forget to pay allowance. Make paying an allowance on time a priority, so children can learn budgeting skills. Using online reminders or setting up automatic allowance payments at payjr.com can help.
  • DON’T always bail them out. Resist the urge to lend children extra money when they want to purchase an item beyond their allowance range. The concept of sacrifice and reward sinks in when children have to choose what to do with their hard-earned money.
  • DON’T avoid tying chores to allowance. Some parents may not want to pay money for every chore, but paying for some household tasks can help teach the lesson that money is earned through hard work.
  • DON’T practice “Do as I say, not as I do.” The best way for a child to learn how to manage money is to watch how their parents spend and save.

Get more tips about allowances, chores and how to pay your teen the safe and easy way visit www.PAYjr.com.

Here’s some additional information about Pay Jr. and a special deal for Total Candor folks:

Save $2 on a teen prepaid card when you design your own card. Enter Promo Code: TotalCandor

Need a safe and convenient way to give your teen money? Try the prepaid route
Try the PAYjr Visa Buxx Card

  • Save money with the lowest priced teen prepaid card available
  • Parents can easily load the card from their checking account & track all their teens’ transactions
  • Fraud protected, safer than carrying cash
  • Teens can shop online or anywhere Visa is accepted
  • Safely allows teens to learn about budgeting money without the risk of overspending

Checking accounts or credit cards often can lead to debt for young adults or unnecessary expense for parents. PAYjr Visa Buxx is an alternative to hidden and excessive bank fees, lost cash and overspending. Parents can now be in the know and in control and teens can have a flexible, secure way to make purchases: PAYjr Visa Buxx.

Check it out at www.PAYjrVisaBuxx.com

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