MARIE - The Marie Osmond Show on Hallmark
We had a wonderful time chatting with Marie before our segment. As the mother of eight children she totally understands the value of training children to work, earn and manage money. We shared some of the tools we've developed to teach our kids to learn to be financially independent.
MONEYSMART FAMILY FACT SHEET
The MoneySmart Family System on the Marie Osmond Show
The USDA estimates that it will cost parents almost $260,000 to raise child from birth to the age of 17
Steve & Annette Economides, known as The MoneySmart Family, saved more than 1 million dollars raising their 5 kids. And the money they did spend was invested in their kids to train them to become financially independent.
They developed a system over a period of several years called MoneySmart Kids and describe it in their book The MoneySmart Family System.
Most parents are unaware of the consequences of the 5/50/500 rule. Basically any time you pay for something for your child without allowing them to earn all or part of it you fall victim to the escalating rule.
The 5/50/500 Rule
$5 stage: Between the ages 0 to 5 it will cost you $5 every time you give in to your child
$50 stage: Between 6 and 11 it increases to $50
$500 stage: Between 12 and17 – the techno-stage (phones, iPads, computers) it increases to $500
$5,000 stage: Between 18 and 23 — the college years (tuition, cars, credit card bail-outs) it increases to $5000.
$50,000 stage: Ages 24 and beyond — the bail-out years (home foreclosure, car repossessions, divorces, custody battles, addiction rehab and weddings) it increases to $50,000
You can avoid the consequences of the 5/50/500 rule by training your children to earn, save, spend and give their money. It’s never to early or too late to start raising MoneySmart Kids.
Run your Family like a busines:
Families should be run like a caring business where everyone contributes to the success of the team. We do this through: Daily Chores / Everybody has a job; A Time Card; Accountability and Weekly Payday.
As a result of being trained in our MoneySmart Kids system, our kids have paid for their own Toys, Clothes (starting at age 11), Technology, Auto Insurance, College (without loans) and Cars (paid for with cash).
You can experience the same results if you consistently work to train your children to be financially independent.
10 Things Parents Should Never, Ever, Pay For!
Parents are going broke raising their kids. Sixty percent of today’s parents are assisting their financially dependent kids.
By Steve & Annette Economides—NY Times Best Selling Authors of The MoneySmart Family System, Cut Your Grocery Bill in Half and America’s Cheapest Family Gets You Right On The Money.
Adapted from The MoneySmart Family System
The “experts” at the USDA in their 2010 report “Expenditures on Children and Families” say that we should expect to spend about $261,000 to raise each child from birth through age seventeen ($14,500 per year). Do you think this is accurate? We don’t! In 2009, according to the U.S. Census Bureau, the median annual household income fell to $49,777. Meaning that it could take more than five years and three months of your entire gross household income to get Junior through the formative years and ready for college.
Just calculate with us for a minute. If you’re an average family with 1.8 children (according to USDA figures, this alone should cost you $26,100 per year), living in an average city, spending an average amount on food ($200 per month per person x 12 months = $9,120 per year) with an average yearly household income ($50,000 per year—about $40,000 after taxes), you’d be left with $4,700 a year ($392 per month) to spend on cars, clothes, housing, debt, recreation, gifts, utilities, health care, cell phones, cable TV, medical bills, dental bills, and chewing gum. Something simply doesn’t add up!
If you’re going to survive financially and have any money left to retire on, you’re going to have to draw a line in the sand with what you’re willing to spend on your kids.
Many parents think that they have to provide their kids with the best things in life. But we’ve discovered that giving our kids the best things, often means that they will expect us to continue to do that . . . indefinitely. But teaching them to pay their own way, starting with smaller expenses from the youngest ages, will produce an abundance of benefits as they exercise their own mental and financial assets to resolve their wants and desires.
At the very least, parents ought to allow their children the privilege of sharing some of the cost of the things they want. But the truth is, the more our kids invest in their own financial decisions, the more they’ll value and care for what they buy. When parents pay for their kids wants and desires, they’re actually stealing valuable financial growth opportunities from them.
While parents may bristle at some of our suggestions, here are 10 things they should never pay for!
Video gaming systems
Mall spending money
Car of their own
Cell phones and cell service
Cosmetic surgery (with rare exceptions)
Oh, and a couple more things parents simply should never pay for . . .
You’ll never regret allowing your kids to stand on their own two feet financially—it pays great dividends to them and . . . protects your dividends for retirement.
We love giving families hope and practical tools for surviving and thriving in this economy. Remember, it’s never too early, too late, or too hard to start teaching and learning financial responsibility.
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