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Show by Ellen Steinbaum ost parents have a hard time understanding the value of a dollar, so is it any wonder have trouble explaining it to their they children? In an era when the nickel candy bar has gone up to a quarter or more, financial experts have some suggestions on how to teach children about money, based on their own Block, tax experts. We were never very strict with our children about money and allowances and so on, and I think they've turned out rather well. They're not squanderers and they're not wasteful. I think they had to find out for themselves how to handle money And I think they learned from what they observed. When they needed money, we would give them money freely. We tried an allowance with the first one. He would forget, and we would forget. It was easier just to give him money when he needed it. He Whatt Money Experts Tell Their Children family experiences. An allowance, most feel, is basic. A child who is free to spend learns by ex- perience to use money responsibly. Experts also stress that a family's spending habits set an example A family concerned with saving is likely to have children who reflect that concern. Here are some ideas from authorities in the field: MILTON FRIEDMAN, economist could go to my wallet and help himself, but liked to have him tell me about it when he took money. It worked for us, but believe me, worried about it at the time. ALFRED KAHN, chairman. President's Council on Wage and Price Stability. I I and I senior research fellow at the Hoover Institution. Stanford University: winner of the 1976 Nobel Prize in Economics. I'm not an expert in managing children, but it seems to me that it is highly desirable for children to learn that if you work, you get paid for that work. We gave our children an allowance and we also paid them for tasks that were not the usual kinds of chores. It made them much more willing to help. They could spend their money on whatever they wanted, absolutely. think the great mistake people make is to underestimate a child's capacity for responsibility You can never make a mistake by giving a child responsibility. They should have more and more responsibility for the kind of things they can buy with their own money. For instance, as my .daughter got older, we gave her a I clothing allowance An allowance should have some purchasing power, so if the cost of living goes up 10 or 1 S percent in a year, the allowance should be increased 10 or 1 5 percent EVE GROVER, president and chief executive officer. First Womens Bank of Maryland. My sons were on a very, very strict allowance that began basically when they started school We never used it as a vehicle for punishment or as a prize They could use part of their money to buy candy or magazine's or whatever they wanted At the same time, we set up a small savings account for them and we told them that a certain percentage of their allow believe in giving a fixed allow- ance. The child must stay within the limits of that allowance. But feel that economizing is a family obligation remember as a child was taught never to leave a room with the light on, not to leave food on my plate these are things families can do to set an example of savings Even now prefer to use a bicycle or public transportation when can rather than a car The whole family has a responsibility to see that money is managed wisely. NANCY TEETERS, member. Board of Governors, Federal fleserve System. My children basically had allowances from the time they were in grade school in return for tasks they were expected to do around the house It worked out well because the chores needed doing and the children could get a monetary reward If they wanted extra money, there were always bigger chores they could do to earn more As they got into their teens, they had jobs that brought them more money. Our two boys delivered a biweekly newspaper in the neighborhood, and our daughter Ann did quite I I I "Im willing to lose some fringe benefits for a little more allowance." Delbert Polston I I ance would go automatically into the account as savings toward a goal which they could select. Every parent hears, "Johnny is getting $10 a week allowance Why am I getting only $7.50?" Boy. did get that! But every family has to have its own standards. Our family is a firm believer in discussions, family in finances. When especially my husband and I sat down for our yearly projection, which we do, the children were part of it Instead of sending a child shopping and saying, "Here is my charge card." or "Here is some money," they should have their own checking account at about age 16 PAUL McCRACKEN, professor of business administration, University of Michigan Graduate School of I Business Administration; former chairman of the President's Council of Economic Advisers. very definitely believed in giving my children an allowance You see, early in the game, people need to learn the discipline of economics that is. if you spend your money one way, you won t have it to spend on something else We did not pay them to do chores in the house We felt that family members ought to feel the I obligation and responsibility of helping out simply because they are part of the family. ROBERTA KARMEL, partner, flogers & Wells law office; former member. Securities and Exchange Commission. Children are human beings like everyone else. It may be that because of the type of household they are growing up in, my children are more aware of financial and business matters, but that does not mean they necessarily have a better understanding They get allowances, and my oldest son has babysitting jobs. I think that is the best way for children to learn about money make them work and earn it J. fRA HARRIS, general partner and member of the executive committee, Salomon Brothers, brokers. always give stock to kids. Whenever have a gift to give, I I I always give stock. I think it's great for a kid to be able to follow his stock in the newspaper and to get that quarterly dividend think it's a great way to teach a kid what America is, what capitalism is It's a good idea, too, if they can save up money to buy themI selves a share of stock HENRY BLOCK, president, H&fl a bit of babysitting Basically they were able to decide how they spent their money They were able to spend on things they wanted, like records Of course, there were times when we had to step in One child has a very strong sweet tooth, and he had to be discouraged from buying reams of candy What thought they should learn was that if they ran out of money, they were out of money If they spent it all the day they got it, there wouldn't be any more until the next allowance. I P 6 PARADE JUNE 29. 1980 |
