Tuesday, November 23, 2010

Kids and Finances

My parents taught me a lot growing up, but they neglected to teach  me the basics of financing my money.  Fortunately for me I was and have always been very conscious of how I spent or saved my money.  I made mistakes but I never repeated them. 

I had Jeff starting on chores as early as three years old.  Nothing major just what he could do like, make his bed, feed the dog and keep his room tidy.  He got two dollars a week for allowance. Being that he was only three years old he really didn't have any interest in money or what it was used for.  Not until he was around five did he understand the basis for money.  I taught him how to put money aside for a rainy day and to set goals for saving.  When he started working and wanted a cell phone we set a plan that he could afford and he knew how much from each paycheck to put aside to be able to pay his bill when it was due.  Just recently he was offered a credit card for a jewelery store at the mall.  He applied to help the kid make his quota and consequently was accepted and given the credit card.  I told him that credit cards can be a good way to build credit but they can also be a way of destroying credit. 

Jeff has a major credit card. He has never had any finance charges because he pays it in full every month.  His goal is to be able to buy a house a year after he gets his first job in his field. He is hoping to have purchased his first home by the time he is 24.  That is a big goal but I think that Jeff is ready for that kind of commitment.  He sure has money saved in the bank and he rarely splurges on himself.  He bought his scooter on his own and eventually he will look into buying his first car.

If I would have know that American Express Pass card for teens years ago I probably would have set Jeff up with one.  This is a good way for parents and teens to keep track of how the money is spent.
You can simply load their allowance onto the card and when it runs out that is it.  It is much like a debit card and parents can use the online tools to see how their kids spend the money. It is a prepaid reloadable card so you can set the limit of how much your child is allocated each month. For the time being there is no monthly fee until October of 2011. Then it is only $3.95 a month.  Not bad considering other cards charge more. It is safer for teens to carry than cash and let's face it. They will think they are cooler for carrying a "credit card." Although I am a big advocate of saving money and have taught that to my son, I do understand that teens will be teens and sometimes you just need to trust that your kids will make the right choices. 

I think maybe when Katie turns thirteen, that I will try this Pass card on her.  The American Express Pass card is only applicable for teens 13-18 so she is too young right now.  She already understands the idea around the debit/credit card scenario so I don't think it will be a hard lesson for her.  She is my saver.  She has been collecting pennies since she was four.  She has roughly collected about $400.00 worth. Half of which she has donated to the charity at her school.  Katie gets an allowance until she starts her first job.  But she has at least 4 more years to go before we worry about that.  Right now she is content on saving her pennies and for that I am grateful.

I wrote this review while participating in a blog tour campaign by Mom Central Consulting on behalf of American Express and received a gift code to thank me for taking the time to participate.


Kat said...

Thanks for the link to that site, I think it's a fantastic idea and I might set one up for Sebastian when gets his money from his broken arm next year.
He's really great about money, he never overspends, he knows how to save and budget, but he'll be getting A LOT of money and the "urge to splurge" is going to be there, I just know it!

Mindy said...

Kat: I think Sebastian would benefit greatly from the PASS Card. Another good idea also may be CD's. Every six months you can just take out the interest and keep rolling them over. Considering he would be getting a substantial amount.