Short stuff: Education
The dismal news is hard to miss, even for little ears. We’re in a recession and it’s time to face the facts of how we arrived at this point. Our children will likely be affected: through the job loss of a parent or relative, cutbacks on school field trips, Grandma or Grandpa going back to work part-time. As the holidays approach, families will also likely be cutting back on gift spending. There are lessons to be learned from this financial mess and we should all take a moment to talk money with our kids.
More importantly, let’s talk about budgeting. If your child has an attack of the "Mom, can I pleeeaase have______" (insert a candy bar, a pack of Pokemon cards, a tube of High School Musical lip balm or whatever overpriced, unnecessary item your child is whining about), now is the time to sit down and talk about where the money goes in a household. Explain that a budget is a plan on how to spend your money wisely.
Without getting into specifics, give your child a monthly "paycheck" and ask them to come up with a household budget. On index cards, list the bills that need to be paid (i.e. $50 electric bill, $1,000 mortgage). Give them just enough money to force them to decide between cable television and lunch money. PBSKids.org has a great guided lesson plan on budgeting as part of its Democracy Project. Visit www.pbskids.org/democracy/educators/budget.html to download the lesson plan and related worksheets.
Sit down as a family and come up with a list of Wants vs. Needs. What can your family live with? What can’t you live without? After you come up with a general list, try to cut your list of needs in half. Do you really need brand-name clothes? Cable TV? See what happens when you spend a week without one of your needs: give up the television, dinner out or school lunches (and have your kids pack their own). Take time to reflect as a family on the experience.
Let the Federal Reserve answer the hard questions by taking part in a free guided tour of the Chicago Federal Reserve’s Money Museum, 230 S. LaSalle St., where kids can find out firsthand how the Federal Reserve affects their lives. They’ll also learn how to detect counterfeits and will have the chance to share a room with millions and millions of dollars. Guided tours lasting roughly 45 minutes are available at 1 p.m. Monday through Friday. Contact the Federal Reserve Bank of Chicago at (312) 322-5322 for more information.
A small allowance can teach kids money management. Daily chores should go unpaid—as everyone in the family needs to work together and do their fair share to keep the home tidy. Special chores, however, such as mowing the lawn or cleaning out the cupboards, should be rewarded. Like a good employer, be consistent, fair and on time with your payments. Check out the book Raising Money Smart Kids: What They Need to Know about Money and How to Tell Them by Janet Bodnar ($12, available at www.amazon.com).
Ask your children to prepare a home-cooked family meal for under $15. Set up your parameters, such as no frozen pizzas, no Ramen noodles and two servings of vegetables per person. Give them a selection of cookbooks to search for recipes, let them draw up a menu and shopping list and enjoy a coffee at the grocery store café while your little cooks spend their $15. Kids love a challenge—and this is the perfect way to get them thinking about meal planning (on a budget), another necessary life skill.
Savings accounts are the perfect way to let children see for themselves how saving a little bit here and there can add up in the long run, and many banks offer special incentives for children opening up their first savings account. North Community Banks offer a Junior Savings Club, a passbook savings account to teach kids the value of saving money—and not only are all accounts free of the usual fees, but they also earn higher interest than adult accounts. American Chartered Banks will match the first $5 deposited in a free children’s savings account—and kids will receive a bright blue piggy bank to keep their allowance safe at home. Ask your bank what programs they offer young savers.
Consider the less fortunate. Volunteering in a soup kitchen or food pantry will give your children better insight into the struggles that many Americans families face in this dismal economy. Search for volunteer opportunities as www.chicago