Reshell Smith is a Certified Financial Planner and author based in Orlando, FL. As the founder and CEO of AMES Financial Planning, LLC where she helps individuals transition from financial chaos and clutter to financial independence and freedom, she firmly believes that everyone should have the opportunity to live the life they desire, especially families of color. Here, Smith shares some valuable tips on how Black families can teach their kids about saving and spending.
Madame Noire (MN): How should parents decide on an allowance amount for their kids?
Reshell Smith (RS): I have found that the most successful strategy is to give children allowance based on their age. A seven-year-old would get $7 and a 9 year old would get $9. This is an easy, clear cut strategy for parents and for kids. There is no confusion about how much a child deserves or what a child thinks he should get.
MN: What are some creative ways to get a child to save?
RS: Save loose change! I love the idea of saving loose change because it gets the whole family involved. Find a jar, preferably a clear jar, that everyone can put their change in. Using a clear jar helps with the psychology of this strategy because the kids can see the change filling up the jar. Towards the end of the year, have the entire family take a trip to cash out and see how much was saved. Another strategy is to have your child set a goal at the beginning of the year. For example, have your child set a goal of saving $75 by the end of the year. Then add an incentive. If they reach their $75 goal, offer to add $25 to make it $100. Kids love to hear one hundred dollars!
MN: Should parents allow their kids to do what they want with their child support?
RS: No. Child support should be used to take care of the child’s needs and some of their wants. Responsible parents are in the best position to make the decisions on where that support money goes. Experts say it costs a middle class family over a quarter of a million dollars to raise a child to age 18. Child support will help cover those costs and children should not decide where that money is spent –or saved– unless the custodial parent gives them a portion to use as they desire.
MN: How did your son become interested in the stock market?
RS: I would love to say that he discovered the stock market on his own, but that’s not true. He has been hearing about the stock market since he was born. By the time he was born, I had already been in the financial industry for at least 10 years or so. His interest started to peak at about age 9 and that’s because he was looking for ways to make his own money. We started with saving “loose change” and we have worked our way into the stock market. Right now, I help him make a small deposit each month. It’s usually just enough to buy a few shares of whatever he wants. So, of course we started with a shoe company.
MN: Give us three tips to help moms empower their kids to be entrepreneurs.
RS: Encourage them to set goals and work hard to accomplish them, when it’s appropriate let them make their own decisions, and allow them to implement some of their ideas so they can get an understanding of what success or failure means to them.