By Jessica Greenberg Special to WTOP
WASHINGTON — If your kid has a summer job, how can you, as a parent, give them the tools to save some of what they make?
Pamela Yellen, the New York Times bestselling author of “The Bank on Yourself Revolution” says, her bestselling book teaches parents how to educate their kids in money management and savings skills.
It’s never too early to start teaching your kids about money. She claims that “Between the ages of four and seven years old, typically children will understand that money is exchange.”
How can you reinforce the idea of money as an item of exchange? One idea — start giving your kids an allowance. Yellen thinks that allowances are great, but she says, “it’s very important that they do be tied into specific tasks that the child is expected to do.”
If your kid isn’t a four-year-old and has a summer job of his or her own, how can this idea of exchange translate? The answer: have your kid set boundaries. Yellen says, that “it’s a really good habit to get into, to not end up spending more than 50 percent of what they take in.”
This habit, as she calls it, will combat a major problem Yellen sees in society today. “We spend everything that we make.”
To avoid ending up in the hole this summer, Yellen ultimately suggests the following:
- Start teaching your kids about money early and
- Have your child settheir own boundaries as they get older.
Aside from these two helpful pointers, Yellen also emphasizes the importance of setting an example for your children. If you “walk the walk,” than so will they.