Just like adults, children need guidance to learn how to spend and save money wisely. Neale S. Godfrey, a former bank president and author of a book on raising financially responsible...

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Just like adults, children need guidance to learn how to spend and save money wisely. Neale S. Godfrey, a former bank president and author of a book on raising financially responsible teens, answers questions about teaching children to manage money.

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Dear Neale:

Every time I take my kids into the grocery store, they nag me and fill my cart with every item imaginable. I get so crazy, I forget why I came into the store in the first place.


— “Help!” St. Paul, Minn.


Dear “Help!”

Before you go into the store, write out your list and show it to your kids. While you’re in the store, ask them to help find the items. That will keep them occupied and teach them how to become smart shoppers.


Dear Neale:

My child is saving for a $100 bicycle. He is working very hard doing chores and saving his money. It will take him seven months more to earn all the money, and I don’t want him to get discouraged. What should I do?


— “Mom of Discouraged Child,” Boston


Dear “Mom of Discouraged Child:”

You could encourage him by matching every dollar he earns. I call this the “401(k) Matching Program” for children.


Dear Neale:

My teen knows how to spend but doesn’t understand that I have to pay the bills for that spending.


— “Frustrated Mom,”

Suffern, New York


Dear “Frustrated Mom:”

Kids only see us spend, they don’t see us pay bills or save money. Sit down with your teenagers and show them your paycheck and bills. Make sure to show how much you are saving for college and retirement.


Dear Neale:

I want to save money for my child in an education IRA, and I was told they don’t exist anymore. Is that true?


— “Confused”


Dear “Confused:”

The education IRAs are now called Coverdell Education Savings Accounts (ESAs). They are a great way to save for your child’s education, allowing you to save up to $2,000 per year until your child is 18 years old. The contribution is after tax; however, the earnings are tax-free if your child uses the money for education.

Send questions to “Ask Neale,” www.childrensfinancialnetwork.com or neale@childrensfinancialnetwork.com