European Stars and Stripes (Newspaper) - March 7, 1992, Darmstadt, Hesse                                Financial responsibility Home by Charles a. Jaffe the Allentown morning Call Money talks. Not everyone listens. Most people Are never taught How. In a world where smart Money management is Paramount to personal financial Success financial illiteracy is increasingly common. In a recent Survey of adults conducted by the Gallup organization nearly half of the respondents said they done to usually set a monthly budget. Forty five percent of the respondents said they have never set financial goals. In that same Survey respondents most frequently cited family members As their most significant source of information on How to handle finances. Only 4 percent of respondents said that schools were the Best source of information. The first Steps toward being financially stable a or toward being overspent overdrawn and having nothing to fall Back on begin at Home. Most methods for teaching children to handle spend and save Money Are simple but experts say that teaching Basic Money management skills is generally overlooked both at Home and in school. Teaching Money management a which includes not Only handling Money but also the development of Good buying habits a is not difficult and does not require extensive financial knowledge most techniques Are a combination of common sense and straight talk. Here Are methods a suggested by a Range of financial experts a for teaching Basic Money management skills to youngsters. Start Early. By age 3 children Are ready to learn about the different denominations of Money and How items Are bought and sold. Setting up Coin Banks helps children identify and count coins while learning Good savings habits savings habits a especially for children under 5 years of age Are Best reinforced with rewards so make sure that savings and spending lessons Are tied together. Let children save for something they really want. Begin giving a weekly allowance around age 5, after discussing both the child a interests and expenses. Experts disagree on whether allowances should be tied to household chores but agree that parents should provide opportunities for the child to earn extra Money by performing Odd jobs above and beyond their regular household work routine. If parents Haven t started a savings account before providing an allowance most experts encourage them to open one with their child upon starting a weekly stipend. Many financial institutions offer special no or Low Cost savings programs for Young people. Create opportunities to earn Money outside of a child s allowance whether by paying for the child to do extra chores or encouraging Odd jobs and providing the equipment a such As a Lawn Mower Snow shovels or lemonade for a Roadside stand a to generate income. Going to the grocery store is often a child s first memorable spending experience. As such it is one of the Best places to teach smart buying. Adults spend on average about one third of their take Home  on grocery and household items so experts suggest teaching children smart grocery buying habits very Early. For example Many parents allow lots to add one or two food items to the grocery cart a usually treats instead of just allowing children to pick an item Lina Ciai experts suggest giving the child a Dollar or two before entering the store a and then encouraging the child to buy his own goodies any leftover change should go into the child s Piggy Bank. But smart grocery shopping goes far beyond that Type of Money handling experts suggest that by age 11, most children can be included in meal planning. Demonstrate How to plan a meal and make a grocery list preferably allowing for the use of coupons As teens get their Drivers License encouraging them to do grocery shopping a from a prepared list a will make them More comfortable with making Good decisions in the store the child will also be forced to make decisions about issues such As buying Brand name or generic goods one method to encourage smart shopping excursions is to give the child just enough Money to cover the listed groceries. Whatever Money the child can save a through co poning or Brand pricing a is the child a to use the extra Money a which can either be spent or saved a is a tangible reminder of the rewards of smart shopping. Siml Larty children must learn to shop for More than just groceries experts suggest giving a set amount of Money to teens for items like Basic school clothes. Set guidelines but let the children make their own buying decisions. Let children use their own Money sense a Good or bad a before intervening making Small Money mistakes As a teen May be just enough to convince a child to change habits. Encourage discussion of spending decisions and Point out the need to think twice before buying a. By the time a child reaches teen age experts recommend discussing Long term savings goals a Lor College or cars for example a and ways to meet them. This May include part time jobs if they done to interfere with work. This is generally a Good time to open a checking account a and for parents to teach How to write checks and balance a Check Book a or to get Low limit credit cards teaching responsible use of credit has become an essential skill starting Early while the child is still under some parental supervision is a Good Way to Foster careful credit habits. Even before children Are ready for credit cards they should learn the dangers of "renting11 Money. Parents who either give advances on allowances a a technique Many experts discourage a or who make Small Loans to children should charge interest so that children will recognize the costs involved in paying interest charges on borrowed funds. Done to expect children to learn simply by watching an Active dialogue on spending savings and Money handling decision s is the Best Way to prepare a child for the financial Rigours of the real world. Family finances should not be a taboo. This does not mean revealing every detail but discussions can include inviting the children to help when the monthly Bills Are being paid children who have been learning about Money Are Able to grasp the High costs involved in running a family. Similarly allow teens to be involved in Money and credit handling basics such As calculating tips on meals verifying the charges on a restaurant Bill and guarding against credit card fraud by removing Carbon slips. Take older children to the brokers office or let them see you making your own savings and investing decisions. If there is a Money question you did not know enough to ask while growing up experts say be sure to teach the answer to your children having Learned it the hard Way. Your answers will help the child realize Why its important to be prepared for real world Money situations. Don t worry about what you Don t know. Like today s children most adults were never provided a Well rounded Money management education. That s no reason not to get an education while teaching children. It s never too late a or too Early a to Start learning what it is exactly that Money is saying. Lawi _ lessons for kids and Young adults 10 most common Money mistakes by Charles a. Jaffe the Allentown morning Call poor financial decision making can be an inherited trait. Parents who suffered through a less than adequate financial education often doom their children to a similar Fate by not advising children to avoid the same mistakes they have made. Stephan r. Leimberg professor of taxation and estate planning at american College in Bryn mawr pa., said the spending habits Learned a or not Learned a during childhood become the basis for planning mistakes made As an adult Leimberg noted that Quot you can see children a especially some teen agers a making adult mistakes and if they done to change them  be making those same mistakes for a Long  Leimberg recently published an article on what he considers the 10 most common financial planning mistakes though his article was aimed at adults Quot these same things apply to  the 10 most common mistakes Are 1. Not knowing where to Start financial planning so you done to. This is an area where parents have a major affect on their children. If they Don t know where to Start on their own finances a or on developing smart spending habits in a child a the youngster will grow up without proper supervision and is liable to wind up in the same boat.2, having dreams rather than goals. Having Quot a lot of Money to buy things Quot is a dream earning $2,000 to buy a used car is a goal. 3. Fear of taking risks a so you risk everything. No risk Means no Reward. Leimberg preaches learning about risk and establishing a Comfort level. Quot doing nothing is the greatest risk of All a he wrote. A before you can avoid risk you have to know what it is that threatens your  4, wanting it Al a at no Cost a in 10 minutes. Instead of looking for the Quick score a which can result in big losses a do what s Best for the Long haul. The Short term mentality is particularly prevalent in children whose Short attention spans often make for an i want it now mentality. 5. Not protecting your assets. I 1 a once you have made Gams prefect them so that you can keep the fruits of your efforts. It s called risk management 6. Not being willing to stay on a financial diet. Steady investment into savings plans is essential for capital accumulation for both adults and children. Leimberg suggests increasing the amount you invest each week month or year until you reach your Quot ouch  Quot that s where the level of your savings begins to have an Adverse Impact on your Standard of living Quot Leimberg. Said in his article. Quot by constantly raising your ouch Point you la invest More on a regular basis and put less pressure on the assets you be already saved to meet your  7. Losing sight of the Bottom line. Done to forget to Check the Cost of making an investment As Well As any tax and estate planning ramifications. For children costs on certain investments a such As Flat fee commissions on Small la Fri a notebook denomination securities a May wipe out the benefits to the investment. Getting the most for your Money is always the most important Issue. 8. Repeating the mistakes of the past. Quot resist the temptation to do dumb things,�?T1 Leimberg said in his article. Quot Only a fool learns from his own mistakes a but someone who repeats his own Folly is 1 worse than a  9. Throwing up your hands when you see what it takes. Saving investing and developing smart Money handling skills is work it requires Quot patience conviction and courage Quot in today a Economy Young and old must overcome the daunting task of carving out financial Security giving up is certainly not the Way to go. 10. Wanting someone else to make you Rich. Quot mental laziness a Leimberg said in his Story Quot is a major reason most people Don t become wealthy. Quot the Best investment bar none is sell education. Educate yourself a and your  a if i have checks i can to be broken by Constance Walker the Allentown morning Call the american Economy generates an estimated 50 billion checks annually and the number continues to grow a a far cry from the Check less society that was predicted More than two decades ago. Yet As much As checks Are a part of daily life financial experts say an embarrassing number of checking account holders have no idea How to manage their Check books. According to the Federal Reserve Bank of Philadelphia about 1 percent of All checks written Quot Bounce Quot a meaning they hit an account with insufficient funds like a Ball hits the Wall on a racquetball court. The worthless checks Are returned to the Payee and the depositor who submitted the Check goes unpaid. A it is not uncommon for people to walk into the Bank and ask How they can be overdrawn when they still have checks Quot said Kevin w. Davis regional vice president of mid state Bank at state College a. Altoona  mid state Bank holds a number of training sessions during orientation at Penn state to teach College students Quot the very basics of banking a what a Check is How to write one when to endorse one How to use the automated Teller machine and How to use the  he said. Don Mealing founder and owner of american corrective counselling services in Santa Anna calif., agreed. Through the company s District attorney bad Check restitution program Mealing said he has found that Quot a tremendous number of people out there do not know the Basic mechanics of a checking  the program is used in conjunction with some District attorneys offices in California and Nevada and is aimed at Small time offenders not professional swindlers. The premise is to use education and counselling to change the Check writing behaviour of people who repeatedly write rubber checks Quot the program grew out of necessity Quot Mealing said. Quot merchants Are being besieged with a High volume of bad checks especially in an economic downturn. But because the problem is so common and because the police and the District attorneys have More serious crimes to investigate merchants get Little help until the offence is  one problem is that the majority of checking account depositors do not balance their Check Book regularly 14 percent never balance them according to a recent National Survey. Mealing said Many people say they balance their Check Book but in reality All they Are doing is calling the Bank and finding out what is in their account at the time. The problem is that certain checks May not have cleared or fees May not have been deducted yet but they Are in the pipeline. Because these people do not understand what is going awry they become frustrated and Are too embarrassed to ask for help. Instead they just decide not to Quot balance Quot their Check Book and Stop calling the Bank Mealing said. In some cases people use the checking system to extend themselves a Short term loan and Hope the Check does not get to the Bank before the next Deposit does. Quot but that becomes a Way of life and continually overspending a Mealing said. Quot people Start managing their finances out of a shoe Box. The interesting thing is they spend their Cash and credit on luxury items and then Don t have enough Money to buy the necessities. Many times bounced checks Are on Basic items. Num Cirn 13% Natl 132. V33 x record All charges or credits 11 lat affect your account tic scrub lion of 1hansac1ion ski club. Posl pc bit Cash Choo atm ,. Cha Sig Mil a a it Thyri St ski set it to seance com it managing and balancing a Check Book a a record All transactions As they occur and immediately calculate the new balance. A a Don t forget to record transactions made at automated Teller machines. Although automated tellers can provide an account balance the number May not be accurate because it will not reflect any outstanding checks. By keeping an up to Date Register you Wilt avoid Over drawing your account. A a every month you la receive an account statement that will show your account balance at the beginning and end of the month any deposits or interest payments transfers or withdrawals checks that have been cashed and any assessed fees or penalties. Property balancing your Check Book requires Good record keeping so you can compare your Register with the monthly Bank statement. In the example above your monthly statement not shown says the account has a balance of $195.99. Your Check Book Register shown Hare shows a balance of $156.87. 1. When you get your statement Check off in the Register All items that have cleared All checks but #132 have cleared. 2. Enter All tees penalties or interest payments to your Register add or subtract them from the balance accordingly. The fee for the automated taller withdrawal is included in the fee column on the Day it was made the monthly service charge a which Koukl be shown on the Bank statement a was entered into this Ledger the Day the statement arrived. 3. Subtract from your statement balance any checks that have not cleared. The $39.12 of Check hi32 should be subtracted from the monthly statement. 4. Add deposits that Haven to cleared to your statement balance. There Ere no outstanding deposits. 5. The result should be that your statement and Register balances match statement balance $195.99 minus outstanding Check $39.12 equals $156.87. The amount shown in the Check Register. The account is balanced. 6. If the numbers differ you probably made a mistake you can go through every entry Inyo or Register to find the error or if its Smalt you can assume the Bank a right and make a correction entry. 7. If there is a Bank error notify the institution immediately most institutions give customers 60 to 90 Days to protest their statement before they assume it is accepted after that time it May be More difficult to get an error corrected Stop forged checks or have the Bank assume responsibility for stolen funds. Page 14 the stars and stripes saturday March 7, 1992 the stars Ano stripes Page 15