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Old 07-29-2010, 04:59 AM
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Default Kids Leaving Home? Give Them A Crash Course in Money Management

Kids Leaving Home? Give Them A Crash Course in Money Management

07-29-2010 03:16 AM

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Thu, 2010-07-29 11:12


Kids Leaving Home? Give Them A Crash Course in Money Management


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Kids Leaving Home? Give Them A Crash Course in Money Management

Provided by Lori Ann G. Kane and Dan Mahoney, CFP®
01638 717700, www.firstcommand.com


Seeing your child finish high school and prepare for the next big step can be rewarding for them and for you. But you may have concerns about how your son or daughter will fare financially in the real world. Before he or she leaves home for college or a full-time job, you may want to provide a few money-managing tips. Here are six to consider.
1. Track spending by keeping receipts. The reality is that most kids don’t know how much things cost. Whether they’re working for their own money or are being helped out by mom, keeping tabs on what goes out can help set the course for life-long financial habits. A plain envelope for receipts is an easy way to start.
2. Set a budget. This simple practice is key to keeping spending in line. Once your son or daughter knows where money is going, he or she can set a realistic budget based on weekly or monthly obligations.
3. Set a weekly limit and use cash. It’s easier to overdraw an account when using a debit card, so carrying cash may help. By getting enough cash to cover expenses for the week, kids can literally see where their money is going.
4. Plan ahead for large expenses. If the auto insurance premium is due twice per year, saving small amounts each month is much easier than trying to wrangle a large sum at once. A road trip with friends can be much more rewarding if your child has saved up and can travel without going into debt.
5. Distinguish between wants and needs. This is something children learn very early, but once on their own, they may be overwhelmed with decisions. Your child may think the occasional “gift” isn’t bad, but buying with abandon can create serious problems.
6. Avoid debt. This sounds simple, but young adults can be the most susceptible to credit card marketers. Let your child know that items purchased with credit cards can end up costing much more than the ticket price if interest charges are allowed to accrue.
While it’s impossible to impart every bit of financial wisdom on your children, offering helpful advice when you can and letting your child know that financial responsibility begins now can help them prepare for a more promising financial future.

Lori Ann G. Kane and Dan Mahoney are Financial Advisors at First Command Financial Services in Mildenhall, Suffolk. This article was written by First Command, and is provided by First Command Europe Limited, a wholly owned subsidiary of First Command Financial Services, Inc. that is authorised and regulated by the Financial Services Authority. In Europe, investment and insurance products and services are offered through First Command Europe Limited. Certain products and services offered in the United States may not be available through First Command Europe Limited.Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP (with flame logo) ® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.




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