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We all want our kids to grow up happy and optimistic. We want them to experience the world as a safe place where anything is possible and all their dreams come true.
Screeeeccch—that’s where your daydream collides with reality. The truth (and your wallet can attest to this) is that the world doesn’t seem very optimistic right now. The economy is sick and the unemployment rate is over nine percent. But, with a little preparation, you can accomplish anything. Keep reading for tips on how to prep your kids for reality without making them want to hide from it.
The ABCs of saving
Teaching kids how to save will pave the way for a lifetime of good money management. Depending on the age of your child, you can help them set up a bank account of their own. Explain the principles of interest and how depositing a little every month will quickly add up. A good way to raise the stakes is to encourage them to save for something specific (a new toy, a pair of designer jeans, a video game, etc.).
Leading by example is also powerful. Make finances a family affair by asking your kids to help you find coupons, showing them how you pay the bills, or having a contest to see who can find the cheapest peanut butter.
It’s also a good idea to give your children some ownership in the family finances. Instead of making decisions on behalf of your kids—such as where to spend a family vacation—get them involved. Ask where they’d like to go (within reason of course—you might want to offer several choices that fit your budget and let them make the final call). Explain how much money you have for the trip and how much more you need. Brainstorm ways the whole family can save money to achieve your goal.
Hard work pays off
Another way to get your kid ready for the real world is to get their work ethic into shape. If they want a cat, have them work at an animal shelter for a certain number of hours to “earn” it. If they want a new bike, have them contribute to the cost by saving up their allowance. We’re not talking child labor here, but saving an allowance or starting a lemonade stand teaches kids about cost and profit, customer service and entrepreneurship. Most importantly, it will teach them that hard work is worth it.
In the real world you need to fight for what you want and have a thick skin if you don’t get it. To teach your kids how to play hard while playing fair, get them involved in a local sports team or club. Help them understand the value of competition along with being a gracious winner and a good loser.
The value of higher education
Once upon a time, a college education gave kids an edge in the job market. These days, a college education is the minimum. According to the United States Department of Labor, someone with a professional degree will earn an average of $1,610 a week. Someone with a bachelor’s degree will make $1,038. A high school diploma, meanwhile, earns only $626 a week.
Have a plan B
No one wants their kids to settle for less than their dream job, but again, this is the real world we’re prepping for. So a back-up plan is a good idea. If your kid wants to be a Broadway star, great. But make sure he’s qualified to teach while he’s waiting for his big break. If your kid wants to be an inventor, don’t talk her out of it, but encourage her to train as an engineer until that patent makes her a billionaire. The job market is unpredictable and it may not be possible for your child to make a living at his or her first choice of professions. So help your kid learn multiple skills to appeal to a variety of employers and markets. Those skills will come in handy if your child doesn’t make it as a professional ice skater.
Communication is key
In a world of tweeting, Facebooking, texting, and IM’ing, face-to-face conversation is rare. But that dying skill is exactly what your kid needs to land his dream job. (Imagine an interview where your child is shuffling her feet, mumbling, and refusing to meet the employer’s eye. Not good.)
Media consumption among young people has reached epic proportions according to the Kaiser Family Foundation. Their study, quoted by CBS, followed 2,000 kids between eight and 18 to find out what they’re really doing with their free time. The results aren’t pretty: seven-and-a-half hours a day, seven days a week are spent in front of some form of media (and that figure jumps to almost 11 hours when you account for media multi tasking). The only thing kids devote more time to is sleeping!
Fight back. Insist on sit-down dinners with the family where each member discusses their day. Have adult friends over and encourage your kid to engage in polite conversation. Make sure summer jobs and volunteer opportunities include some kind of customer service. Do whatever you can to make face-to-face interaction second-nature—not some “old school” skill that only adults use!
How honest should you be?
When discussing the economy with your kids, how much should you tell them? Janet Bodnar, author of Raising Money Smart Kids, was recently interviewed on NPR about how to explain the economy to kids. According to Bodnar, although it depends on the age of the child, in general you should be honest without overburdening them with scary information they don’t need. If there’s a lay off in your future, explain the situation truthfully while offering solutions (unemployment benefits, for example, or how you’re going to search for another job). As painful as it is to explain, consider it an opportunity to give your kids a real-life lesson about the real world.
Remember, the economy may tank but it will pick up again. Your child may lose a job but they’ll get hired somewhere else. Disappointment happens but so does success. Reacting to the pits and peaks of finances is a lifelong process—as you know yourself! Making sure your kids have the personal and professional tools to handle it is the very best thing you can do.
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