Have you ever wondered why some people have great money sense while others spend all their money on unimportant items and have no savings to call their own? We believe that people with good money sense have developed this skill due to the parenting that they received as a child. If you have kids (or will have kids in the future), how will you teach them to be responsible with money? Below is a great article on some tips on how to create fiscally responsible children:

Grown-ups could learn a lot from Brianna Centanni. The 12-year-old Burnaby girl has developed a three-part system to manage money and it will likely keep her out of financial problems for life.

“I’ve been saving for quite a long time. I know how good it is to save,” said Brianna, a Grade 7 student and the current CEO of her elementary school’s youth credit union, sponsored by Vancity, an area credit union.

“If I had three $10 bills, I’d probably keep one and put the rest in my account.”

Brianna’s long-term savings, which she deposits in her credit-union account, are for future, unknown expenses. The short-term savings, kept in her piggy bank, are for things she thinks she’ll buy as soon as she has enough cash. The money in her purse is for day-to-day expenses, or maybe a trip to the mall.

At the moment, Brianna’s short-term savings are earmarked for an iPod, but she is hoping for a sale before buying one. The long-term savings may pay for a laptop computer or possibly a flat-screen TV, but she hasn’t done enough research yet.

Teaching kids about money and how to set financial goals will set them up for a lifetime of good habits and protect them from costly adult mistakes that lead to chronic consolidation loans and huge credit-card bills.

“Budgeting is an ugly word for adults, never mind kids,” said Simon Fulber, a field trainer for Vancity. “But goal setting is huge for kids. They want something, and they can see their savings build.

“It’s almost like a game — it’s not about sacrificing.”

Children learn a lot about money just from listening to adults talk, Fulber said. They hear about mortgage payments, bills, the price of groceries, but they don’t necessarily learn the mechanics of money.

“They may only hear negative things about money, that it means work and sacrifice,” he said. “Parents might not want to share their financial details with their kids, but they need to know about money. It will set them up for life.”

Even three-year-olds understand the world revolves around money, said Paul Lermitte, a registered financial planner with Integrated Planning Group in Vancouver and author of a book aimed at parents, “Allowances: Dollars and Sense” (www.makingallowances.com).

“Kids are always looking for treats and they are bombarded by marketing everywhere. Kids are becoming little consumers earlier than we ever were, so why not teach them the right things?”

An allowance helps children learn to make financial decisions. With direction from their parents, they can learn about spending, saving and giving to others.

“If you want your kids to be successful in the long term, teach them about money early. If you want them to do well at school, you teach them to read early — it’s the same concept.”

Lermitte suggests parents give an allowance of 50 cents for every year of age, so a six-year-old would receive $3 a week, and pay it on Sunday night rather than Friday to reduce weekend impulse spending.

He said children should save at least half of their allowance, and be encouraged to put aside a little money every week to give to charities, such as the SPCA or the local food bank.

After a few months, some of the savings should be deposited in the child’s own bank account for long-term accumulation and to get them used to dealing with a financial institution. The rest of the savings stays in the piggy bank for mid-range goals such as buying a toy or some special treat, as well as to purchase gifts for family or to spend during a family vacation. The week’s spending money goes into the wallet.

“Parents also have to learn to let them make decisions, and if the allowance doesn’t make it through the week, you can’t give them more. If they make a bad decision, it’s not a big deal right now.”

It’s far easier to learn to save a little cash so you can afford a movie with friends on a Friday night than to learn when the credit cards are out of control, he said.

“You’re trying to create the habit of saving. There is a lot of confidence built in people who have money sitting in the bank, even if it’s a piggy bank.”

In summary:

1. Give your children an allowance of $0.50 for every year of age/week. So a 10 year old would receive a $5/week allowance.
2. Give the allowance on a Sunday so that they don’t blow it on the weekend.
3. If they run out of money do not give them any more.
4. Teach them to save a portion for purchasing goals that they may have (like a new ipod). One portion should go to long term savings (bank account), another portion to midterm savings (piggy bank), a small portion to charity, and the rest is spending money.

That even sounds like a good plan for adults!

That’s all for now! In the mean time.. Stay Wise… and Stay Stingy…

Did you know that moving residences is among the most stressful events in life? Will you be moving in the near future? Never fret! Jill Cooper & Tawra Kellam have a great article that details the most efficient way to pack in terms of time AND money!

Order in which to start packing

Start with things you don’t use every day.

~Memories - Grandma’s dishes, quilts, old books, Bibles, childhood toys and photos

~Garage items - Christmas and Holiday decorations, camping equipment and things in storage

~Things stored in closets that aren’t used often and out of season clothes

~Knick-knacks, pictures, mirrors and wall hangings

~Seasonal dishes, canning equipment, roasting pans, good china, good silverware, large serving platters

~Unnecessary CD’s, DVD’s and video tapes.

~Sewing room and craft items.

~Home office - Pack as much as possible except bills that need to be paid. Leave office boxes open and tape them closed at the last minute before moving just in case you need something out of them.

~Children’s toys and games - Pack most of the toys they don’t play with regularly.

~One week before moving, pack all unnecessary kitchen items, clothes and linens (except what you need for one week).

Tips to pain free packing:

Don’t leave empty spaces. Here are some examples of how you might use all available space:

~I fill my china cabinet with light weight soft things like stuffed animals, balls of yarn, quilts, artificial flowers and greenery.

~If you will be moving your refrigerator or washer or dryer, fill it with pillows, wicker baskets or plastic items from the kitchen.

~Fill clothes hampers with bathroom items. If you have a lamp that needs special protection, wrap it carefully in towels and place it in a clothes hamper.

~Fill up even small items like plastic pitchers with kitchen utensils or kitchen knick-knacks.

~I clean out a large outside trash can and use it to pack my hoses, small pots and gardening tools. If I’m not sure if I should keep something, I allow myself to take it if I can fit it in that one trash can. My son-in-law says it is one step closer to the curb that way.

~Don’t pack glass, porcelain or ceramic containers with loose items in them that could break them. Canning jars filled with marbles or baby…

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Bad habits can also be very expensive habits! If the average smoker who pays $300/month in cigarettes were to quit smoking and take the money and invest it, the results are astonishing.

$300/month invested in a tax free retirement account growing at 8%/annum over 25 years would result in $274 452! What? You spend over $600/month on cigarettes? Over the same period and investment return, your account would grow to $545 395. Yes, over half a million dollars. Something to think about everytime you fork over your hard earned cash for a pack of smokes!