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Raising Fiscally Fit Kids

By Michelle Singletary
Sunday, June 4, 2006

Summertime often means summer jobs for teens.

But is that always a good thing for young people?

Not necessarily, says Janet Bodnar, who has spent many years fielding questions from parents on how to teach their children -- grown and underage -- to handle money.

"The trouble is, even though a paying job can help teenagers sharpen their skills in the workplace, it can also be a two-edged sword," writes Bodnar in "Raising Money Smart Kids."

Bodnar goes on to say: "By encouraging kids to work, it's easy to create a generation of teenage werewolves, obsessed with feeding their ravenous spending appetites for even more clothes, cosmetics, and concert tickets."

I've always liked the way Bodnar approaches the topic of kids and money. Of course, that could be because I agree with a lot of what she advises, such as banning credit cards for teens.

I like Bodnar's advice so much that for this month's Color of Money Book Club, I'm recommending "Raising Money Smart Kids: What They Need to Know About Money and How to Tell Them" (Kaplan Publishing, $17.95). Bodnar is a columnist and deputy editor at Kiplinger's Personal Finance magazine.

Whether you have a toddler or a teen, Bodnar, who is a mother of three, dispenses good personal-finance advice on battling advertising aimed at your children, dealing with allowance issues and how to handle a boomerang adult child.

I like Bodnar's balance, such as on the issue of whether teens should get jobs. As she reports in her book, nearly half of all teenagers go to work once they reach 16.

"I remember with gratitude that my own mother let me keep my summers free when I was in high school," Bodnar writes. "One of my aunts frowned on such 'coddling,' and was always bugging Mom to make me get a job. But she held her ground."

What was her mother's rationale?

Bodnar's mother knew that soon enough her daughter would have to start work -- and once she did, she would be working all her life.

I'm increasingly frustrated by this notion that children must be introduced to adult things so soon in life, such as credit cards and working for pay.

And for many teens, working doesn't mean helping with the household bills or a college fund. It means they have more money to dispose of when their parents drop them off at the mall to buy stuff they don't need.

"It would seem, ironically, that they've learned the lesson: A buck will buy stuff, and lots of bucks will buy more," Bodnar writes.

If you're intent on teaching your children certain job-related skills, encourage them to volunteer, she says.

"Kids are often given more responsibility in these positions than in paying jobs, and they get exposure to a variety of careers and to slices of life that they might not normally come in contact with."

Bodnar isn't against teens working, particularly during the summer. But she says parents should control how many hours they work, especially during the school year, and what they do with the money they earn.

In fact, she says that as long as you are supporting your children, you are entitled to at least a portion of their income unless you give them, either by formal agreement or practice, the right to spend and manage their own earnings.

"I certainly don't advise confiscating your kids' paychecks," she says. "But it's appropriate for you to sit down with them before they start working to hash out an agreement on how much you'd like them to save, and for what."

Because Bodnar's book is peppered with questions from parents and children, it's an easy read. I suggest you take the quiz at the front of the book. It's a good test of how money smart -- or challenged -- you are. For example, how would you answer this question?

Your son is heading to college in the fall and will need spending money. You:

a) Tell him that if he stays in his room and studies, he won't need spending money.

b) Agree to send a weekly allowance.

c) Tell him to get a summer job.

d) Discuss his needs, see what he has available from jobs and savings, and agree to supplement that with an appropriate allowance.

Personally, I like the first answer. Practically, Bodnar says, you would be better off going with d.

If you are interested in discussing this month's book selection, join me online at http://www.washingtonpost.com/ at noon July 6. Bodnar will be my guest and will take your questions.

To become a member of the Color of Money Book Club, all you have to do is read the recommended book. Then we chat online with the author. In addition, every month I randomly select readers to receive a copy of the book donated by the publisher. For a chance to win a copy of "Raising Money Smart Kids," send an e-mail to colorofmoney@washpost.com . Please include your name and address so we can send you a book if you win.

Penny Pincher of the Year

It's time again for my Penny Pincher of the Year contest. All you have to do is nominate someone with an original penny-pinching strategy -- a friend, a relative, even yourself. Edited versions of entries may be published. Send your entries by June 16 to colorofmoney@washpost.com . Please put "2006 Penny Pincher of the Year Contest" in the subject line. Please include your address and daytime and evening phone numbers. You can also mail entries to Michelle Singletary, Color of Money, 1150 15th St. NW, Washington, D.C. 20071. Please put on the front of the envelope "Penny Pincher of the Year Contest."

· On the air: Join Michelle Singletary at 7:10 p.m. tomorrow on "Insight" with Herman Washington on WHUR (96.3 FM). She also discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail:singletarym@washpost.com.

Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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