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What kids should know about family financesSep 25, 2011 (Reading Eagle - McClatchy-Tribune Information Services via COMTEX) -- It's hard to explain family finances and net worth to kids, especially when they just want to buy the next new thing. But the monetary groundwork laid for children at a young age can mean the difference between a secure financial future or living paycheck to paycheck. To that end, local financial experts were asked: "How much should you tell your kids about the family finances, including day-to-day finances and net worth; at what age, and what should it be?" Here is what they had to say: "Conversations of family finances should be restricted to the child's age. For example, if receiving allowance, they should be taught to budget for big-ticket items they may want, versus the adult just paying for it. "In regards to net worth and day-to-day finances, these issues should be discussed at adulthood. This will make it easier to deal with parents as they age and their health diminishes. This will allow for hopefully better care and less potential neglect." Michael P. Butterworth M.P. Butterworth & Associates Kenhorst "Financial awareness by kids can help families during difficult times. If kids understand the budgeting/saving/spending process, they may become more realistic when determining wants versus needs. "Kids need to learn personal money management early on so the concept can be built upon as their maturity level increases." Dr. Scott Ballantyne Alvernia University "In older generations, it was all about keeping the family solvent so everyone in the household worked, including the children. "It is best to teach your children early in life there are no free rides in life, so learn early and fast." Ken Silagy Dollar Sense Reading "Young children need to understand the relationship between earning money, saving money and spending money. "Parents need to gear their language and explanations to kids so they can understand. "For example, taking everyone in our family of five out to the movies with popcorn, candy and drinks is equivalent to one month's TV cable bill. Try to keep the explanations simple." Beth Gallen Mastromarino Van Reed Wealth Management Spring Township "I think that as our kids are exposed to more and more financial information through cable TV and the Internet, the age at which parents need to have money talks with their kids is younger and younger. "A very foundational discussion that parents need to have with their kids, probably in grade school, is the importance of fiscal responsibility. For example, don't spend more than you have. "Specific family finances and net worth discussions probably should take place closer to the age when the children approach high school graduation. The cost of a college education is significant, and everyone needs to understand how it will be funded: by the parents, the kids, scholarships, grants, loans, etc. That could also be a good time to share some information about your family's net worth." J. Andrew Weidman Reinsel Kuntz Lesher Spring Township "For younger children, it is important they understand that everything has a cost. Sharing with children what groceries cost or what the utilities cost is important. "I have had success with rewarding my 4-year-old son with $1 for each week he gets all smiley faces at day care. "So if he wants a new toy, we set a goal and collect $1 each week toward that goal. "For adult children, it is vital to share with them your estate plan and what to do if anything were to happen to you unexpectedly, as well as introducing them to your financial adviser, accountant and attorney." Jeremiah M. Sensenig Edward Jones Wyomissing ___ (c)2011 the Reading Eagle (Reading, Pa.) Visit the Reading Eagle (Reading, Pa.) at readingeagle.com Distributed by MCT Information Services |