Br: Pat Grenier, Contributing Writer
As parents we have a responsibility to protect our children and provide for them. That means we make sure they have secure shelter, food, clothing and education. We are not required to provide many luxuries and perks. We should, though, teach them financial responsibility from an age where they can reason. This will be a life lesson that will save them many headaches, provide financial security and independence.
I believe an allowance is extremely beneficial as it teaches them how to decide between what they want, what they need, how to save and prioritize and most importantly how to live within their means. Call me old fashion, but, I believe they need to work for an allowance.
MSN Money Talk News recently had an article entitled “19 things you should make your kids pay for”. Here is a synopsis of some of it:
1. Designer clothing and accessories. We all want to be “in style” that is a given. Kids, as they get older certainly want to fit in and follow the trend with the latest, fads, name brands. Allowing your child to pay for these expensive items is a lesson they will remember for always. They soon will realize how expensive it is and decide for themselves if they really need it.
2. College. This is a controversial topic. Granted, college is extremely expensive and, if possible, we do not want them burdened with tens of thousands of dollars in debt. On the other hand, saving for our retirement is just as important if not more. MSN in their article says it better than I can. They say “college is key to unlocking future earning potential, and kids should contribute to this investment in their future success. More importantly, they’ll be more likely to make the most of their college years when they’re paying for it themselves.”
3. Toys and Games. There are times that we absolutely want to purchase these items that bring so much joy. Letting your child decide what to buy with his/her own money does not seem like much but it is such a valuable lesson in so many ways. The pride that they have with what they purchased, how they care for it and the process of prioritizing their spending is invaluable.
4. Gifts for friends and family. It is not about the gift but the thought that counts. Allowing your child to save for that special gift, make that special gift is a far greater lesson then the money they spend on the gift.
5. Replacement for Items they broke. Accidents can happen to anyone. Letting them pay to replace the item, even if it is just the deductible, teaches them responsibility to be careful and to take good care of their possessions. A life lesson.
6. Donations to charity. Teaching your kids to be kind, considerate for the less fortunate and teaching them to donate to causes that they believe in and are worthy teaches them to become good global citizens. We all need to do our part, starting at an early age becomes second nature.
7. Late fees and surcharges. I don’t think this category needs explaining.
If you implement these strategies you are well on your way to raising a financially responsible adult.
Pat Grenier is a General Partner with BRP/Grenier Financial Services in Springfield, MA. Securities offered through Cadaret, Grant and Co., Inc., Member FINRA/SIPC. BRP/Grenier and Cadaret, Grant and Co., Inc. are separate entities.
Pat can be contacted by phone at (413) 736-6712, or email her at firstname.lastname@example.org