Test Your Money Smarts
Warm up your parental reflexes with these 20 kids-and-money situations' common experiences, at least in principle, for most parents. Once you've identified your level of parental agility and authority, read Kiplinger's Money-Smart Kids (And Parents, Too!), where you'll find plenty of Dr. Tightwad's strategies and ideas for teaching your kids the value of a dollar. Remember, raising money-smart kids starts with you.
1. Your 7-year-old daughter loses the $5 she got for her birthday from her Aunt Mary. You:
a. Ask Aunt Mary to send another $5
b. Tell your child she should have put the money in the bank
c. Let her do chores to make up the $5
d. Tell your child she should have been more careful
2. Your 14-year-old son has been saving half of his allowance and money earned from neighborhood jobs. Now he wants to use the money to buy a $200 compact-disc player. You:
a. Allow him to buy it
b. Offer him your old turntable instead
c. Tell him there's no way he can touch his savings
d. Buy it for him
3. Your daughter has mowed your lawn since she was 12. Now 14, she wants to make money by mowing neighbors' lawns. She also wants to be paid to do your lawn. You:
a. Say "Okay, and go ahead and use our mower and gas"
b. Hire a neighbor's kid to do your lawn
c. Tell her to forget it because mowing your lawn is her job
d. Say "Use our mower and pay for the gas you use. We'll pay you half of what you charge neighbors'
4. You usually pay $40 for your son's sneakers. Now he wants a pair of $200 inflatable high-tops. You:
a. Chip in the $40, and let your child come up with the balance
b. Say "I'll buy a $40 pair, or you can still wear your old ones"
c. Buy them, because "everyone else has them"
d. Buy yourself a pair, too (everyone else has them!)
5. Your 15-year-old daughter gets an allowance for which she is expected to help out around the house. She has ceased to help. You:
a. Hire a neighbor's kid to help clean the house
b. Stop the allowance altogether
c. Continue to pay until the child turns 18
d. Tie the amount and payment of the allowance more closely to chores accomplished
6. You're trying to teach your 16-year-old about the stock market. She invests her own money in a stock you selected. It loses money. You:
a. Make up the loss
b. Hire a neighbor's kid to make future stock picks
c. Say "That's how the market works. Too bad"
d. Share the loss with her, and help her figure out what to do with the remaining stock
7. Your son is getting his driver's license, which means that your insurance will go up. You:
a. Sell your car and buy bicycles for the entire family
b. Pay the increased premium -- he is part of the family, after all
c. Make him pay the increase
d. Split the increase and make him pay for his own gas
8. You finally allow your daughter to shop for her own school clothes. She comes home with the ugliest clothes you ever saw. You:
a. Let her keep the clothes, but have a discussion about buying clothes that suit her and will last
b. Grin and bear it, because at least she likes the clothes -- and bought them on sale!
c. Say "I knew I couldn't trust you with that much money"
d. Make her return the clothes—with you in tow
9. Your 10-year-old took on a paper route to earn money but is getting lazy. He's in danger of getting fired. You:
a. Hire the neighbor's kid to help him out
b. Tell him to do the job right or not at all
c. Pick up the slack by getting up early to help him deliver papers and collect fees
d. Warn him that he's likely to lose his job and income, and then allow him to do so
10. You're standing in a toy store and your son is insisting that he needs a $60 video game. You:
a. Fork over the cash to avoid a scene
b. Fork over the cash but tell him next time he'll have to pay part of the bill
c. Don't fork over the cash, and otherwise proceed as in step b
d. Proceed as in c, and suggest that he try the game over at the neighbor's to see if he really likes it before he buys it
11. After telling your children that they absolutely, positively cannot have Super Nintendo, their doting Auntie Mame arrives and presents them with one. You:
a. Tell Auntie Mame that the kids can't accept the gift
b. Grit your teeth and accept the gift
c. Sit down and start playing
d. Thank Auntie Mame for the gift, and at a later date, ask her to consult with you before purchasing expensive gifts for the kids
12. Your daughter receives a $20 birthday check in the mail from her grandparents. You:
a. Let her spend it as she wants -- it's a gift
b. Deposit the check in the bank for your daughter
c. Tell your daughter to save $5 and let her spend the rest
d. Call Grandma and tell her $20 doesn’t buy much nowadays
13. You bought your 16-year-old a car on the condition that he not leave the school grounds during lunch hour. He does, and totals the car. You:
a. Tell him to get his bicycle tuned up
b. Ground him for a month and limit him to using the family car at your discretion, provided he pays for his gas and part of the insurance bill
c. Buy him another car
d. You'd never be in this predicament, because you'd never buy a 16-year-old a car in the first place
14. Your son is on his way out the door for a date when he casually asks for $20. You:
a. Tell him you didn't know he had a date, and ask him where he thinks he's going anyway
b. Give it to him, plus an extra $10 for gas
c. Tell him that date and gas money come out of his allowance, as previously agreed
d. Give him $10 for gas
15. It's your preschooler's birthday, and he gets so many presents from family members that he quickly gets bored and toddles off to play. You:
a. Give the remaining gifts to the neighbor's kid
b. Put the gifts away to open another time
c. Proceed as in b, and determine that you will set up a college fund for your child and ask relatives for contributions in lieu of gifts
d. Open the rest of the presents yourself
16. Your 17-year-old works three nights a week and weekends, and his grades have dropped significantly. You:
a. Hire the neighbor's kid to do the homework
b. Make him quit the job
c. Don't do anything; he's almost an adult, and his grades are his
responsibility
d. Tell him to pull up the grades and consider cutting back on hours, or face quitting altogether
17. Your 5-year-old wants everything in sight when you go to the supermarket. He begins to make a scene when you say no. You:
a. Wear ear plugs and let him scream his little lungs out
b. Leave him home from now on
c. Buy him what he wants
d. Let him choose one item
18. Your son is heading for 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
19. Your 22-year-old son quit his first post-college job and has moved home "temporarily." You:
a. Agree on a combination of chores and a contribution to household expenses, and mutually set the date by which he will move out on his own
b. Tell him that he's an adult now and he has one week to get his act together and leave
c. Give up your home office so he can have his old bedroom back
d. Ask him to do some chores around the house
20. Your kids, 6 and 8 years old, ask you what would happen if you died: where would they live, who would take care of them? You:
a. Tell them you aren't going to die and there's no need to discuss it
b. Ask them if they would like to live with Uncle Eddie (as your will currently specifies)
c. Tell them that they would probably go to live with Uncle Eddie and his family (but you don't have a will and haven't discussed it with Uncle Eddie)
d. Proceed as in b, and take the opportunity to write a letter to Uncle Eddie outlining how you would like the kids raised in your absence
Answer Key
Add up the point values of your answers to get a sense of where you stand.
1. a. 0, b. 1, c. 2, d. 3
2. a. 3, b. 0, c. 2, d. 1
3. a. 2, b. 0, c. 1, d. 3
4. a. 3, b. 2, c. 1, d. 0
5. a. 0, b. 2, c. 1, d. 3
6. a. 1, b. 0, c. 3, d. 2
7. a. 0, b. 1, c. 2, d. 3
8. a. 3, b. 2, c. 0, d. 1
9. a. 0, b. 2, c. 1, d. 3
10. a. 0, b. 1, c. 2, d. 3
11. a. 1, b. 2, c. 0, d. 3
12. a. 3, b. 1, c. 2, d. 0
13. a. 1, b. 2, c. 0, d. 3
14. a. 0, b. 1, c. 3, d. 2
15. a. 0, b. 2, c. 3, d. 1
16. a. 0, b. 2, c. 1, d. 3
17. a. 2, b. 1, c. 0, d. 3
18. a. 0, b. 1, c. 2, d. 3
19. a. 3, b. 0, c. 1, d. 2
20. a. 0, b. 2, c. 1, d. 3
Summary
0-10 Either you should adopt the neighbor's kid or you just like taking tests.
11-29 Keep this up and your kids will still be living at home when they're 30.
30-49 You're on the right track, but you could use a consultation with Dr. Tightwad.
50-60 You and your kids are well on the way to being money-smart. Compare notes with Dr. Tightwad to learn how you can fine-tune your approach.
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