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ADVICE ON TEACHING YOUR CHILDREN TO MANAGE MONEY FROM AMERICAN FINANCIAL SERVICES ASSOCIATION

 ADVICE ON TEACHING YOUR CHILDREN TO MANAGE MONEY
 FROM AMERICAN FINANCIAL SERVICES ASSOCIATION
 WASHINGTON, Sept. 22 /PRNewswire/ -- Teaching children at an early age the value of money can reap rewards for them ... and for you ... when they become young adults, according to Frances B. Smith, vice president of the American Financial Services Association (AFSA).
 Understanding how money is used to purchase things that are needed or wanted can form a part of a child's education from the time he or she enters grade school and through high school, Smith says. But different approaches work better at different ages. Also, your family's values -- how you view allowances and children earning money -- determine your basic approach.
 Here are some suggestions from the AFSA Consumer Credit Education Foundation for helping your children understand the relationship between money that comes in and money that goes out:
 Grade School
 -- Provide a weekly allowance for each child, even if you can only afford a modest amount, and give it to children at a set time each week. Discuss the kinds of purchases that should be covered by the allowance and help the child understand that the allowance can buy things he or she needs, for example, one week's allowance may buy batteries for a toy. Also, help your child realize how many weeks' allowance would be needed to purchase something more expensive.
 -- Encourage younger children to save "extra" money in a piggy bank at home so that they know the value of "saving for a rainy day."
 -- If relatives or friends give them more sizable amounts, go to the bank with them to open savings accounts in their names. With their own savings accounts, children feel more independent and develop a sense of accomplishment every time they make a deposit.
 -- If you think your children are getting too many toys or expensive items as Christmas or birthday gifts, suggest to close relatives that they might instead consider savings bonds. Then, if a savings bond is given, explain to the child how much the savings bond is worth now and what it will be worth in the future. Keep the bonds in a safe place and provide your child with a record of the amounts.
 -- When you take your children grocery shopping, get them to help you comparison shop for a few items. For example, read the shelf labels on, say, several brands of canned tomatoes, and ask them which is the least expensive for the same size.
 -- Encourage your child to earn extra money at home by doing simple chores, such as helping to set the table for a week. Explain beforehand that this is an agreement between you; if the task isn't done one day, that day's "wages" would be subtracted.
 Junior High
 -- Continue allowances, but adjust them upward; if you have not done it already, tie allowances to performing certain household chores. For big household tasks -- for example, cleaning the basement -- consider paying "wages" to your child.
 -- Encourage continued and regular savings account deposits -- from allowances and from "extra" money.
 -- Have your child accompany you when you shop for his or her clothing and personal items. Look for bargains and comparison shop with your child.
 High School
 Peer pressure exerts more influence at this stage and could lead to family conflicts about money for clothes, entertainment, dating, a car. Reinforcing values linking money to work -- either at home or outside -- can be particularly important for teen-agers.
 -- Before the school year begins, talk with your teenager about expected needs during the year. If you are going to provide an allowance, discuss the amount, what it is expected to cover and whether any regular household tasks will be done in exchange.
 -- If the teenager has an outside part-time job, it's important to discuss with him or her how much time is realistic for a full-time student. Clarify what the teenager's outside job earnings are expected to cover and what purchases the parents will continue to pay for, for example, clothing, extracurricular activities, etc.
 -- Continue to encourage regular deposits for savings.
 -- If your teen asks for a loan for a major purchase, and you're willing and able to provide it, consider setting up a "loan agreement," with payments and due dates specified. Some parents, to help prepare their teens for the real world, charge interest on the loan.
 Usually children learn how to handle money from examples set by the parents. You can give your child a boost toward becoming a good money manager if you manage money well yourself. Involve your children in the family's financial decisions, such as planning a vacation within a certain budget. Also, if the family is having financial problems and needs to cut back on expenditures, bring your children into a discussion of the options.
 The American Financial Services Association (AFSA) is the trade association for firms that provide financial services to consumers and small businesses.
 For more information on consumer credit issues, contact Terry Cummings at the American Financial Services Association, 919 18th St. N.W., Washington, D.C., 20006.
 -0- 9/22/92
 /CONTACT: Terry Cummings of American Financial Services Association, 202-296-5544/ CO: American Financial Services Association ST: District of Columbia IN: FIN SU:


SM -- NYPFNS11 -- 1959 09/22/92 06:56 EDT
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Date:Sep 22, 1992
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