With the presidential election right around the corner, parents no doubt are concerned about their childrens' futures. But just as important as the economic climate — or even more so — is teaching your kids the value of a buck and the importance of saving.
Westbury native, Neil Cavuto, senior vice president, anchor, managing editor of business news for both Fox Business Network (FBN) and Fox News Channel (FNC) and father to three knows a thing or two about how to help your kids save money. Here, he shares his tips:
1. Consider a point system that rewards your kids for being responsible or behaving well. "I think all human beings are drawn to 'things' and early on, we even have a pretty good idea about the price of things," said Cavuto. "I try to teach my kids it's fine to covet, but you better first plan. Pricey gifts aren't dropped in their lap." Cavuto's wife developed an interesting system that rewards points that can be translated into dollars so their kids can buy those gifts for themselves. "Very often they get frustrated and demand we just give them a set allowance," he said. "But, it’s a pay-as-you-go, points-for-performance system that teaches them, early on, the value of saving up. We are very fortunate to be able to give to them, but I’ll be damned if I’m going to give them a free ride." This also teaches them to sleep on it before they spend it, said Cavuto. "Teach children early that just like it's bad to wolf down your breakfast, it's worse to wolf down your bucks."
2. Explain what a dollar actually means. "For every item/amount your kids want to spend, have them then explain to you what that actually means and why it is worth the cost," he said. For example, to get that iPad, it will cost the equivalent of 500 of those $1 chocolate bars, but it is worth it because of x, y, and z. "I’m a believer that once you explain it to people, they will pick up on it and the lesson will stay with them," said Cavuto. "And once they get in the habit of pausing to think about what that money spent means and then finding the words to explain to you, they will make wiser decisions."
3. Make it as easy to understand as it is relevant if you want them to listen. Believe it or not, the conversations swirling around the upcoming election and how to alleviate the country’s economic problems actually contain a simple lesson for children about spending: Money in, money out, said Cavuto. "Make your child aware he or she can only spend what he or she actually has and that they should only spend half of whatever that is. The other half, save, Junior." It's an early lesson in living below your means and a quick introduction to saving for a rainy day. "If you point out how our own country is in debt and that something as significant as the presidential election is focused around this very issue, it’s easy to then show your child how a single person can wind up overspending and why it’s key to be mindful of spending and saving on a daily basis. If Washington doesn't get it, maybe our kids still can," he said.
Catch Cavuto live tonight from Long Island to host debate coverage from 8 p.m.-12 a.m. on the FOX Business Network.