Ecount News

Money management goes back to school

MarketWatch

NEW YORK (MarketWatch) - For most parents, late summer is the time to relax a bit as the kids make their way back to school. However, more than $3,000 a person is spent by teens and parents during this big shopping period - triple the per capita spend of Christmas shopping.

Because few schools have lessons in personal finance, the back-to-school shopping season is a Grade A time for you to teach your kids about money, and-one hopes--to save some in the process.

It's important to teach them the difference between wants and needs. For your "tweens" and teens, this can be difficult, given the increased peer pressure for them to have the most trendy clothes and technology, such as designer jeans or iPods.

So, create a budget. Determine what your child needs, and what you can afford to spend. If the school sends home a list of required supplies, incorporate those before budgeting in "extras" like a cell phone, an electronic organizer, or costly new clothes. This is also a good time to have a heart-to-heart with your child about comparison shopping.

If your child has a part-time job, you should require that he or she pay certain expenses. Most kids would prefer spending their money on food, clothes and entertainment, but putting them in charge of their own school necessities will quickly teach them to stretch their dollars.

What could lead to a step forward in your child's financial maturity is to get him, or her, a FIRM (Financial Independence Responsibility and Management) Card. Co-sponsored by Visa USA, the card is not a credit card but a prepaid debit card, so there is no line of credit and no finance charges.

"Back to school is a sensible time to set one up," says Matt Gillin, CEO of Ecount, the Philadelphia-based electronic payment company that created the FIRM Program. "The parents can load money on the card and let their kids learn the process of budgeting."

The FIRM Program also focuses on teaching teens money management. In collaboration with teenagers and school teachers, it has created a curriculum that includes 10 interactive chapters covering financial literacy. Says Gillin: "We want to build smart spending habits and financial independence through educational tools, lessons and quizzes that are easily accessible by teens."

Visit FIRMprogram.com.

- By Marshall Loeb