COLUMN: Summertime financial lessons for your child

Children on summer break have plenty of free time on their hands, which is usually spent playing outdoors, working on summer projects and participating in various sports and clubs. As parents, you can also weave in financial lessons to these summertime activities to reinforce great money habits. Here are some ideas:

• Earning money. Teach entrepreneurship with a lemonade stand. You can show how some of the money earned from selling lemonade needs to be reinvested to purchase lemonade mix and other supplies. Explain concepts such as breakeven and profit by walking your children through how to calculate how much money needs to be earned to cover expenses, and to track the money left over after expenses have been paid.

• Saving money. Many children have big plans for summer vacation. But these plans cost money! Explain what you as parents will pay and what your child will have to pay. Encourage them to set a specific goal for what they want to buy, along with how much money they need to save. Then create something visible to track their goal, such as a thermometer that gets colored in as the amount of money saved increases.

• Budgeting money. Involve your children with budgeting for various summer activities. If you’re going on vacation, tell them the overall budget for the trip and have them help you plan. When discussing lodging, for example, give them the choice of either staying at a fancy hotel, or downgrading the hotel and having money left over to go to an amusement park.

• Spending money. It’s amazing how quickly you go through snacks. Summer is a great time for your children to go along to the grocery store to see how much their favorite snacks actually cost. Consider giving a snack allowance for however often you go shopping, then explaining that they can buy whatever they want with that amount of money. The only catch is the snacks your child decides to buy must last until your next shopping trip.

• Borrowing money. Lend your child a reasonable amount of money at the beginning of the summer to spend on whatever they want, but explain it must be paid back with interest. You could even arrange the loan to be paid in two or three installments. You can show your child how loans work, and that they’re on the hook for making payments even if they don’t have the money.

• Investing money. Whether its chores around the house, a part-time job, or a kid-appropriate business, make an offer to match whatever your child earns up to a certain amount. This could be done weekly, monthly, or at other intervals. This is a great opportunity to teach the basics of investing and how to make your money grow.

One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice. For more information, visit www.fredtfoxiii.com.

Fred T. Fox III is a Lawton native who owns his own business.