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Money: What parents wish kids knew

Marketplace Staff Oct 23, 2009

Every family’s got different rules, but when it comes to money, there are a few guidelines that all grown-ups agree are important. Here are 10 things we wish kids knew about money (so we don’t have to keep repeating ourselves!).

1. You’re at the perfect age to learn about money. What’s the perfect age? Whatever age you’re at right now. Getting good with money is like brushing your teeth-little habits today can make your life a lot easier later. Every thing you do today to learn about money will make you much savvier when you’re an adult.

2. Money doesn’t grow on trees, or in the ATM machines or in Mom’s purse. Money comes from hard work. Your parents work for hours every day to earn their money and someday you will, too. Respect how hard it is to get and keep money.

3. What you need is not the same as what you want. You need shoes. You don’t need Kobe Bryant’s Nikes. You need food. You don’t need a $5 frozen yogurt. You want a leather jacket for a hundred bucks. The pleather one for $35 will do just fine.

4. Do your homework before you buy. Just like you study for school, do your real-world homework before you purchase anything. Where can you get it for the best price? Is it the one you really want? Or do you just want it because someone else has it?

5. Frugal is in style. Even if you’re not an economics whiz, you know our country has struggled with severe money problems in the last couple of years. This can happen again if we’re not careful. Live large when it comes to passion and participation; scale-down when it comes to spending and shopping.

6. Protect your money reputation. Guess what? You have a money reputation. It’s called a credit report. Once you get any kind of loan or credit card, know that you’re being judged on whether or not you pay your bills on time, and how much money you borrow. One late payment could result in future loans costing you literally thousands of dollars more. It could even make it harder to get a job or to rent an apartment one day.

7. Always read the fine print. You wouldn’t get behind the wheel of a car without learning how to drive, right? It’s the same thing when you get a credit card: You have to learn how it works. What seems like free money is really a loan that you have to pay back-plus a lot extra if you’re not careful.

8. You’re never too young to save. A bank savings account is a good place to save for short-term goals. It’s even better than stashing it in a Spiderman jar or a Hello Kitty tin since it pays interest, which is a small sum a bank pays you for the privilege of keeping your money.

Think of this: If you’re 10 years old and saved $1 a day in a kind of account called an IRA, you could have $362,000 by the time you’re 65! OK, so maybe this sounds unrealistic or maybe it doesn’t. But you get the point: saving when you’re young really adds up.

9. Money isn’t everything. Now that you know the basics, remember that the best things in life really are free: time with your friends and family, a walk in the park with your dog, laughing, dreaming, reading, playing.

10. Oh, and one more thing. Someday you’ll be the one paying the bills. Trust me, it will be here faster than you think.

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