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Echo Press Editorial: Teach children how to save during holidays

Opening presents at Christmastime is one of the magical moments of the holidays. But it doesn't last long. The wrapping paper is thrown away. The newness of the present wears off. Gift-giving doesn't have to be so fleeting. Parents can give their...

Opening presents at Christmastime is one of the magical moments of the holidays.
But it doesn’t last long. The wrapping paper is thrown away. The newness of the present wears off.
Gift-giving doesn’t have to be so fleeting. Parents can give their children another gift by teaching them the value of saving money and planning for the future.
C. Ernie Nivens, who was designated as the 2005 Father of the Year for Charlotte, N.C. by the American Diabetes Association, said that during the holiday season, parents can teach their children lessons about budgeting and prioritizing resources.
Nivens, author of Baker’s Dozen: 13 Insights from Highly Successful Financial Advisors, says that a percentage of money children earn or receive as gifts this holiday season should be put aside for at least one of four pockets:
Pocket 1: College savings. College graduates in the Class of 2014 share a sad historical fact – they’re the most indebted class ever. The average graduate with student-loan debt has to pay back some $33,000, according to an analysis of government data published in Edvisors, a group of websites about planning and paying for college.
“Hopefully, we’ll have a better handle as a country on student debt in the future,” Nivens said. “Teaching children the importance of this pocket from a young age is important. They’ll understand the concept and need for establishing a budget for their future betterment.”
Pocket 2: Fun and games. Nivens calls this the “Dream Pocket.” Children need to know that the entertainment they consume on a regular basis – including TV, movies, Internet and video games – isn’t free. Having them help pay for a video game or a summer trip is a direct and concrete way for a child to experience the necessity of giving up something in order to gain something they’d like to have. It also helps them become more discerning about requests for toys, games and outings.
Pocket 3: God pocket. While the ability to save money is a virtue to a child’s future well-being, giving part of one’s savings to a higher purpose is a way of acting on their values. Giving donations to a church, charity or to buy a friend a treat teaches children that money isn’t the ultimate goal in life.
Pocket 4: Saving for the future. Can a child always predict his or her money needs to the last dollar? Can adults? Of course not, and that’s why a pocket for general expenses is useful. It could be that a charitable effort takes off within the community, which could require travel. Or, a child may accidentally break a window while playing catch with a friend. However the money may be needed for future use, it’s great to be able to supplement the other pockets with savings.

 

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The following is an opinion column written by an Echo Press editorial staff member. It does not necessarily reflect the views of the Echo Press.
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