Kids become better spenders and savers when parents take the lead

By MEGHANN COTTER

Date published: 11/20/2004

IGHT-YEAR-OLD Eli Vaughan has his eye on a pricey Play Station 2, and is trying to figure out how long he'll have to save his weekly allowance to buy it.

His parents, who live in Spotsylvania County, make him buy many of the items he wants because they believe learning to save is part of raising their kids.

Their daughter, Hannah, 4, earns $2 a week and Eli earns $5.

But 10 percent of what they earn goes to the church, another 10 percent goes into savings, and they can do what they want with the 80 percent left over. That's been the rule since both children were 3.

Many people believe toddlers are not old enough to learn about saving. But Eli's mother, Mary Vaughan, says she knows her kids have been learning to spend since they were born.

Advertisers target children with spending messages from an early age. Children see ads on television or pretty pictures on boxes in the store, and they beg their parents to buy the things for them.

Vaughan prefers to offer her children an alternative to those messages. When she takes her children shopping she makes them spend money on the things they ask for.

"All I have to say is, 'Do you have the money?' and they stop [asking] real quick," she says.

Sometimes Eli will have the money for what he wants. But a lot of times he will carry it around the store until it's time to check out. Then he'll realize he doesn't really need the item enough to spend his own money on it, his mom said.

Sammy Renick, founder of The It's a Habit! Co. in California, says it's never too early to start teaching children about such spending habits.

"If you put a quarter and a dollar in front of a kid and they pick the dollar, they are ready," Renick said.

Through a fictional character, Sammy Rabbit, It's a Habit! provides parents and educators with books and music CDs that teach children good spending habits.

Many school systems, he said, are not teaching children about money management until late elementary school. By then, most habits are already ingrained, Renick said.

But if spending skills are taught at home, children can start learning before they even go to kindergarten.

Date published: 11/20/2004