MAGAZINE - USAA

TEACH YOUR
CHILDREN
WELL
MAKING
ALLOWANCES
For ideas on the best way
to dole out allowance,
log on to USAA.COM/
USAAMag and click
“Making Allowances.”
BY TERI CETTINA
Your kids learn their
money habits from
you. Make sure
they’re good ones
24
EVERYChristmas, USAA
member Susan Beacham gives her
teenagers coupons for family outings.
A Milwaukee Brewers game. A purse
with an invitation to meet the refugee
women-turned-entrepreneurs who made
it at a local nonprofit. “It’s important that
my daughters — and all kids, really —
see that charity isn’t just writing a check.
It’s about helping real people,” says
Beacham, a former banker who founded
Money Savvy Generation for kids.
Read on for more tips.
TEACH THE VALUE OF SAVING
USAA member and veteran teacher
Karyn Hodgens and her husband created
a spreadsheet to explain the concept
of compound interest to their freespending
son. “Something clicked. He
said, ‘You mean I’ll earn more money
just by letting it sit there?’ He was an
instant convert,” Hodgens says. Soon,
she and husband John, a software engineer,
developed KidsSave, a software
program that creates virtual accounts
to track the real money in piggy banks.
USE TECHNOLOGY
Tech-savvy kids have plenty of options
for online money-education sites, such
as kids.gov. But before they play with
virtual money, they must be comfortable
with the real thing. “They need to touch
dollars and coins, count them, stack
them and learn that they’re concrete
things,” says Neale Godfrey, author of
Money Doesn’t Grow on Trees.
WALK THE WALK
Kids watch, more than they listen to
lectures, Godfrey says. Agrees Beacham:
“You may be the greatest money manager
in the world, but if you don’t show
and tell your children what you’re doing,
they can’t learn from you.”
MAKE ALLOWANCES COUNT
Beacham suggests kids pay for actual
expenses with part of their allowances —
such as schoolbook orders. “[It] teaches
kids how to make hard choices,” she says.
GO BEYOND SPENDING LESSONS
Require kids to save, invest and donate.
“They need to learn that money isn’t just
for spending,” says Godfrey.
CREATE MONEY-MATCHING
PROGRAMS
Matching your kids’ savings — the
way employers match money in a
401(k) plan — can be a powerful motivator.
Grandparents might also offer
matching funds.
DON’T BE TOO GENEROUS
Even if you can afford to give your teens
a comfortable allowance — don’t, suggests
Godfrey. “By about age 12, kids
should do small, paying jobs for friends
and family members,” she says. “By 16,
they’re capable of getting summer jobs
and saving for year-round expenses.” ■
Bank products provided by USAA Federal
Savings Bank, Member FDIC.
YOU, USAA AND YOUR KIDS
To add your children to your USAA profile, log on to USAA.COM
and use keyword “Preferences.” Click My Profile and Preferences
> Personal Information.
Help your teens open a USAA Teen Checking or Savings
account online. Go with them to a Web site created just
for them: MYUSAA.COM. There, they can log on to make
transactions or subscribe to USAA youth magazines.
USAA MAGAZINE WINTER 2008 USAA.COM
PHOTOGRAPHY BY JEFF NEWTON • ILLUSTRATIONS BY ZELA LOBB