Kelly Carr
The Arizona Republic
Jul. 10, 2005

Andrew and Alyssa Jorgensen know if they want something, they had better start saving.

It’s a financial lesson their parents are intent on conveying to the children. So with Star Wars memorabilia and journal supplies on the siblings’ minds, chores like washing dishes and taking care of the pets don’t seem all that bad.

Andrew, 11, and his sister Alyssa, 9, have both received an allowance for the past two years. Their mom, Kassy Jorgensen, helps the pair monitor their money with a chart and a savings plan.

"We take half and put it away, and then they get the other half," she said. "We monitor how they spend it. They have to ask before they use it. We try to get them to give back to church and also save up for things that they want."

Jorgensen said she’s working hard to raise kids who are financially savvy.

She wants the pair to carry over the concepts like budgeting and smart spending as they grow into young adults.

As more and more teenagers move toward financial independence, finance expert David Pheanis says people like Jorgensen have the right idea.

"Families should promote the concept that you don’t buy things if you don’t have money," said Pheanis, a professor at Arizona State University. "The younger you start, the better. If a child can count, they can understand money."

Pheanis said he used a variety of different methods to help his four kids understand the value of money.

To teach the benefits of saving, he would match every dollar that his children put into their bank account. He also would discuss purchases with his kids, even about items like school clothes and books, to decide how much of a contribution he would make.

"Whenever they want to buy something I would have them pay 10 percent," he said. "If it was something I thought was frivolous I would pay zero. Even the things they needed and used, I would give them some economic stake in it.

"They would have to decide if they wanted the designer jeans. It’s amazing the difference it makes in their ability to say what they really want."

While many smart spending practices begin at home, some schools have found it important enough to incorporate into their curriculum.

Xavier College Preparatory in Phoenix will offer a new class, Financial and Economic Literacy – A Call to Stewardship, to its students this fall.

The class will teach juniors and seniors about financial decision-making and the skills needed to generate personal wealth. Students also will learn about giving back to the community.

"Financial literacy is so important for the kids, with the accessibility of credit cards," said Sister Jones Fitzgerald, principal of Xavier College Preparatory. "We think it’s not only important that you learn about it, but that as you do earn, you use the money wisely."

Tips for setting allowance, money-management plans

A good way to calculate your child’s allowance (especially when you have more than one) is to take the child’s age and divide it in half. For example, if your child is 6 years old, half of that is three, so your child’s allowance is $3 per month or week.

Once the allowance is set, you can develop a money-management plan. Designate 35 percent of the allowance for free spending, and 55 percent must be saved. Children can use the remaining 10 percent to donate to a charity in their community. Encourage young children to start saving with a piggy bank.

Develop a financial journal that tracks your child’s money. Develop spend, save and share columns. The columns should have corresponding piggy banks.
Source: Suggestions from parents on

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