Money Management ABCs (continued)

Beacham developed the Money Savvy Pig (Ages 3 & Up, $14.95) to teach and illustrate the impact of four choices. A “piggy bank” with four see-through compartments: SAVE, SPEND, DONATE and INVEST, allow youngsters and parents to watch what happens as choices are made to spend or allocate money. The Money Savvy Pig includes explanations of these four choices, as well as suggestions for learning more.

Discuss with your kids how to set goals for their money. Ask them what they would like to save for in the short-term (a bike), spend money on right away (the movies), to which cause or program they’d like donate (ASPCA), and for what they’d like to save [invest] for the long-term (college). Keep in mind that the goals be age appropriate. A five or six year old may not be ready to take on the concept of long term investing, or that donating means parting with the money in their control. Try suggesting that she/he donate some no longer favorite toys to a local hospital or outgrown clothing to a shelter.

Beacham insists that parents be sure to keep money promises. If your family uses allowances, pay what is promised, and pay on time. If extra money is to be earned from shoveling snow, pay what is promised, and pay on time. Setting good examples, establishing trust and good communication are all good investments.

Give kids the opportunity to manage a little bit of their own money, and they’ll figure it out. Make kids responsible for some of their spending choices -- and make them use their own money. If you don’t, they will never learn the concept of value. Give your kids ever-increasing responsibility for making the decisions about how the limited supply of money gets spent. Remind them: It’s your money, make your choices.

If your ‘tweens and teens think you don’t know a thing, and they trust and believe only in a computer, these software programs offer a slightly different perspective about budgeting and managing money. Both Sim City 4 (Ages 12 & Up, Maxis/EA , $49.95) and Zoo Tycoon: Complete Collection (Ages 10 & Up, Microsoft Corporation, $29.95) put the kids in the management seat. Build a safe and attractive zoo and you’ll attract customers who spend money. Don’t spend your money wisely and you lose customers and animals. SimCity 4 gives kids the additional experiences of what it’s like to have the responsibility of spending taxpayers’ dollars to build schools and hospitals.

Tweens can also try opening their own pet spa, skateboard factory, or comic shop in Hot Shot Business (Ages 9 - 12 yrs., Disney Online/The Ewing Marion Kauffman Foundation), a free, online business simulation game from Disney. The hosts, Jack and Kate, provide informal financial advice on setting up the business, making marketing decisions, and building sales. Once customers start arriving, players learn to make adjustments in their plan based on real world scenarios that cause their sales and inventory to fluctuate.

Talking about money doesn’t have to be difficult or taboo. Check with the banks in your area about no-fee kids accounts. Take the kids with you each time you make a deposit.

Show them, tell them, and show them again: Save, Spend, Donate, Invest. A number of years ago, I saw a t-shirt proclaiming: “I can’t be overdrawn, I still have checks left.” Don’t let that be your family motto.