Ages 13 to 15
A child's early teen years are not too early to learn about the stock market. You can pretend to invest in companies your child is familiar with, like Disney or Mattel. Make it a family activity by having each member pick a stock, suggests Godfrey. Then read the paper or watch the financial news together, and discuss how the stock values of everyone's choices fluctuate.
Between lunch money, school supplies, and other small necessities, allowance can go very quickly for young teens. Help your child set a budget by first discussing wants vs. needs. "I call it the potatoes and gravy game," says Pearl. "Potatoes are food we need to survive. The gravy makes it taste better but isn't necessary." You can reinforce this idea by going over the family budget with your child and discussing your family's needs vs. wants.
Ages 16 and up
Stored-value cards, such as Visa Buxx or American Express Cobaltcard, are simple tools that parents can offer to teach lessons in financial responsibility, according to Pearl. Teenagers can use these buying cards to pay for things without using cash or credit cards. Parents load the cards, which look like credit cards, with a set amount of money and then let their teens budget their allowance. (Ask your lender about possible annual fees.)
"With a little encouragement," says Godfrey, "giving to charity can become part of your child's mentality." In fact, donating can be more than a financial lesson; it can teach social responsibility. Help your child pick five charitable organizations that interest him. To decide which is worthy of your hard-earned dollar, make it a family project to find out what they do, how well they do it, and what percentage of the donations goes to their cause.
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