Time for real-life money lessons

Time for real-life money lessons

Nothing like a $65 fill-up to get the attention of a teenage driver.

"There goes my baby-sitting money for the day," said my frustrated 19-year-old daughter in the early days of summer.

Ah, summertime, and the money lessons are easy when there's a houseful of kids.

For youngsters on tight budgets, high prices can mean high anxiety. That's why this can be the perfect time for some mini-lessons to help your children become more fiscally responsible -- to spend more wisely, develop a better sense of household expenses and perhaps sock away more of their summer-job money.

What do I mean? Consider these everyday experiences, including a few examples from my own household.

Price appreciation

A sure way to help children better manage their money is to make them kick in for things like car insurance and repair bills, cell phones and even the occasional burger and shake for lunch. When their own skin is in the game, they tend to be more responsible with their spending and more aware of the "costs" of living.

Would the teen who breaks or loses his cell phone seemingly every other month be more responsible if he had to spend his money on the replacement rather than his parents'? Probably.

Likewise, requiring a new high school driver to pay at least part of her car insurance might prompt a heightened sense of safety behind the wheel.

Finally, trips to the grocery store, for example, are a great way for younger children to learn comparison-shopping skills and develop a healthy dose of skepticism about what is a "good buy" and what isn't.

Douse the lights

It's a major pet peeve -- no, not dirty dishes that fail to make it to the dishwasher, but kids who leave the house with lights on, ceiling fans running and televisions blaring. I don't know how many times I've gone around flipping switches off and giving short speeches about the need to conserve energy and keep our electric bills down.

My broken record of a message seems to be sinking in on the home front -- each of us can make a difference in preserving our environment, even if it's one light switch at a time.

The 'red ring of death'

Part of being a savvy young consumer is learning how to tackle problems. In our house recently, that meant an encounter with the red ring of death, otherwise known as the red light of death.

Need translating? It's basically a "general hardware failure" that renders an X-Box 360 useless. Rather than converting the game machine into a doorstop, Mom, Dad and 15-year-old fished out the extended warranty on the system and followed the instructions for returning the defective product.

The lesson? Understanding that when things break down, all is not lost, especially if you hang onto receipts on big-ticket items and follow up with customer service to make sure you understand the return policies. While I'm usually not interested in extended warranties on electronics, it certainly worked out in this case.

Are you rich?

How much money do you make? Are we rich, or conversely, are we poor? Do you like your job? Even the most awkward questions from children deserve answers.

The worst thing you can do is duck the issue. However, especially with younger children, there's no need to tell them the intimate details of your pay stub, since it won't mean much and might wind up innocently being spread all over the neighborhood. Better to come up with another way to answer those sensitive questions.

When a friend entertained her grandchild visiting for the summer, for example, the car-savvy grade-schooler couldn't help but comment on the luxury vehicle his grandfather was driving.

"How much money do you make?" the boy asked his grandmother. "Are you rich?"

No, my friend replied. "Our money goes toward paying for a house, cars and all the groceries that little ones like you like to eat."

As I've said many times, take advantage of opportunities that present themselves practically every day to teach your children (or grandchildren) about your values toward money. From these types of experiences, children will learn some of their most lasting lessons.

Questions, comments, column ideas? Send an e-mail to srosen(AT)kcstar.com or write to him at The Kansas City Star, 1729 Grand Blvd., Kansas City, MO 64108.