Released September 25, 2009
AMES, Iowa -- In tough times and in good times, all family members should be involved in making decisions about money, say Iowa State University Extension experts.
Children grow in understanding and self-worth when they contribute to the resolution of financial problems. Studies by the Consumer Federation of America indicate that including children in decisions involving money both prepares them to become wise consumers and brings the family closer together.
"Including children in financial decisions can increase their appreciation for the financial challenges you face as their parent," according to Mary Beth Kaufman, ISU Extension family resource management program specialist based at the Shelby County Extension Office in Harlan.
Extension offers two games that families can use with children of all ages to help them make decisions about managing money and spending. The Allowance Game helps younger children make decisions about spending allowance money wisely, and The Spending Game assists older youth in making choices among spending categories. Both games would make good discussion starters for family talks on managing money and making financial decisions.
Each game is described in a four-page publication available from ISU Extension county offices or from Extension’s online store at http://www.extension.iastate.edu/store/. The cost of the publication is $1 or a .pdf version can be downloaded at no cost.
The Spending Game, PM 1103, was developed for older youth as they think about heading off to college or living on their own. Players are given 20 beans to spend in 13 categories including housing, communications, insurance, food, gifts and recreation. In round 2 of the game the budget is reduced to 13 beans. Follow-up discussion topics include talking about what to give up first and why, and how much money should be in an emergency fund.
The Allowance Game, PM 1776, targeted to younger youth, offers several choices at various cost levels. A 20-bean budget is spent in categories where children typically spend allowances, such as recreation, clothing, hobbies, music and movies, and savings. Players are asked to think about how spending changes when allowances are reduced, and what is easy or difficult about making choices on what to spend.
Lessons learned in using The Spending Game or The Allowance Game can be applied on the practical level as well. Extension experts suggest the following strategies, based on the ages of the children involved:
Preschool children. In the store, show the children two or three items, from which they are to choose one to buy. If after the purchase they are disappointed in their decision, do not give them more money—let them learn from their mistake. Help them understand the relationship between working to earn money and buying to satisfy their needs and wants.
Elementary and middle school children. Help them to understand about wise spending and savings. Let them help make some of the purchasing decisions when shopping for the family. Ask teens and older preteens to assist in bill payment by making out the checks, or by addressing the envelopes, or with your close supervision, by assisting you electronically.
High school youths. In nationwide financial literacy tests of high school seniors, teens received low scores in their understanding of financial management principles. Yet nationally, teens purchase billions of dollars of goods and services each year. They want and need opportunities for learning how to stretch and spend their money wisely. Give them experience in planning purchases, keeping records, and using credit sparingly. These experiences can go far to prepare them to be responsible consumers.
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http://www.extension.iastate.edu/news/2009/sep/062502.htm
Sources: Mary Beth Kaufman, (712) 755-3104, mbkaufma@iastate.edu
Cindy Needles Fletcher, (515) 294-1908, cynthia@iastate.edu
Editor: Del Marks, (515) 294-9807, delmarks@iastate.edu
