Lesson 5: Setting Goals
Creating A Family Plan
Children between the ages of 9 and 12 can be part of the family's financial plan. Not only does this foster an awareness of how things are planned and paid for, it also increases sensitivity about discretionary income.
Talk about how bills are paid while you're making them out. Explain that a salary has to pay for certain things, and you have to live on what's left over. This discretionary income is what you use for food, clothing and extra treats.
It's important to include income you need to set aside for a planned outing or other event. You might say “let’s see, Uncle Mike’s wedding is next month. We need to set aside this amount to go towards a gift and new outfits.” And subtract that from this payday’s discretionary amount. Your child will begin to understand how planning for future events can impact today’s money. You don’t have to go into exact detail about what you actually make. What counts is what’s left over after paying bills.
If you find yourself short on money, enlist your child’s cooperation. Instead of getting angry when he asks for some new item, tell him why you can’t get it. Ask him to be patient. When energy costs for heating or transportation climb, ask your family to help start a conservation plan. Explain to them what is happening, and offer concrete ways they can help. By making them feel like an active and valued part of your family, you often get much more cooperation than you ever believed possible. It also effectively diminishes the hidden tensions and angry outbursts that come from financial stress.
In what ways would you be comfortable including your child in your family’s finances?
