Find ways to beat the ho-ho-woes

HEALTHY finances

January quickly follows on the heels of the holiday season. It’s the month you dread because of the retail therapy you practiced during the holiday season. This year, make January the month you and your family jumpstart your new economy approach to spending.

Here are some money savvy tips that will save more than a few pennies:

Shop with a list. Whether you are going to the mall or to the grocery store, it’s time to go back to shopping with a list. Buy only what is on the list. Have your kids make a list of what they want and what they need."Needs” are always at the top of the list and"wants” don’t get purchased until"needs” are met.

Carry only cash. The best way to avoid spending more than you have is to use cash. Kids don’t understand credit until they learn that when money is gone, it is gone. So only allow your kids to use cash. Set an example by using cash yourself. It is impossible to spend more than you have when you use cash, provided that the cash didn’t come from a cash advance against your credit card.

Clean your closet. Kids need to be reminded of what they already have. They forget. Cleaning a closet reveals long ago treasures that can be used again rather than buying new.

Trade. Encourage kids to"trade” jeans and gently used clothing, sports and hobby equipment and other accessories with friends. Rather than a trip to the mall, host a"trading” party at your house. As the saying goes, your trash is my treasure.

Use the library. Remember that place—the one with all the books, videos and magazines for free? Have the kids peddle their bikes or take public transportation to the local library once a week to get all the entertainment they need for free.

Don’t eat out. Cook as a family. It’s fun and much cheaper than eating out. Kids learn how to make a meal and families have time together that won’t cost more than the time it takes to prepare and consume.

Turn off the lights. Even the youngest family member can get in the act with this tip. Assign younger children the job of making sure all lights are out in rooms when they are empty.

Start an allowance. The best way to control your spending and your child’s spending is to start an allowance. Sit down and talk about what expenses your child wants to manage and set an allowance for that amount. An allowance teaches your child to budget and allows you as a parent to discover what is really important to your child. Children will spend our money all day long, but theirs will be spent only on what they truly want and need.

Get a job. When kids earn their own money, they look at that cash through new eyes. You and your kids will discover that it’s much harder for them to spend their own earned money than it is for them to spend money that you simply give them. Earned income is a powerful motivator to help them take personal responsibility for their own spending.

Keep track of savings. It’s important to show kids what the money savvy tips do for the family’s bottom line. Estimate the savings and put a portion of the savings against family debt and another portion into a family account that can be used for treats, like an occasional meal out or trip to the movies.

Susan Beacham is the founder and CEO of Money Savvy Generation, a financial education company that provides innovative products and services to help parents and educators teach children the basic skills of personal finance, www.MoneySavvy Generation.com. E-mail her at susan@MSGEN.com.

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