Making kids and young adults money savvy seems to be a major concern for readers, judging by the responses I received to my columns on Kids and Money (What Kids Need to Know About finance) and strengthening women’s financial confidence (Financial Planning and Investing: Women Closing the Confidence Gap).
For example, Ramin Hashemi writes that when his two daughters were young, “I made an agreement with them to double their money by babysitting and refereeing football games if they invested it. I would deposit the funds into a brokerage account and buy low risk stocks that they could relate to. Now in their late twenties, her daughters are both teachers who “are on top of their income, expenses, investments and retirement plans.”
Reader Jeff Prouty was recently asked for financial advice by a 22-year-old friend of his daughter. At the top of his list: “Living below your means. “
Steve Cline remembers that in the mid-1950s his father gave him a stipend of 35 cents a week and two tips: “Spend it, save it, and donate to church or charity.” , writes Cline. “Plus, a dollar saved is better than a dollar earned because you don’t have to pay taxes. By following this advice, says Cline, her parents “worked hard, raised five sons and lived comfortable lives.”
Credit card advice and more. A few readers questioned my advice on youth credit cards.
“You note that kids shouldn’t get credit cards. But there’s a good reason to let them start early: to build a credit history, ”writes Theodore Wagenaar. “I added my then 16-year-old daughter to one of my credit cards. By the time she then got her own card, she already had an exceptional credit history. “
Debbie and Jay Zimmer added their daughter to their credit card when she was in high school, with one condition: “She was required to pay us in full for whatever she wanted to charge on the card,” Jay writes.
I understand this point of view, but I still prefer that young people wait to get a credit card until they are old enough to have one in their name, usually 21, and pay the bills with their own money. . Your personal experiences with credit may vary, but the credit card companies were happy to issue cards for my three children when they were 21. in their spending when they get their own card.
If you really want to add a child to your account, at least follow Zimmers’ lead and have your child pay for their purchases.
A few readers, Jamal Kazmi and Henry Barclay, asked for book recommendations on money and investing that would be suitable for high school students. I would suggest How to turn $ 100 into $ 1,000,000, by James McKenna and Jeannine Glista, and The Motley Fool Investment Guide for Teens, by David and Tom Gardner.
Finally, Victoria L. calls for help. “I tried to instill money management in my 16-year-old granddaughter, but to no avail. Her mother, my daughter, gives her all the money she wants. I’m trying to find something that will pique her interest and make her understand that money is not a gift.
Victoria, I suggest you ask your daughter to read the tips in What Kids Need to Know About Finances. She’s not doing your granddaughter any favors, and it can help if she hears that from someone other than you.
You can also try some of the strategies suggested by readers. Like Ramin Hashemi, you might offer to double your granddaughter’s savings for something special that she wants. Or you can buy shares in a company that interests him. That’s what Henry Barclay plans to do for two granddaughters who will graduate from high school next year.