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Ulrich: Best way to teach a child the value of a dollar?

Carmen Wong Ulrich is a personal finance expert and author of "The Real Cost of Living" and "Generation Debt." She joined us for a live Web chat Wednesday morning after the show's Money 911 segment.Here are two of her answers and a complete archive.Question from Kendall:What is the best way to explain the value of a dollar to a 9-year-old child? I am desperately trying to explain how things cost m

Carmen Wong Ulrich is a personal finance expert and author of "The Real Cost of Living" and "Generation Debt." She joined us for a live Web chat Wednesday morning after the show's Money 911 segment.

Here are two of her answers and a complete archive.

Question from Kendall:

What is the best way to explain the value of a dollar to a 9-year-old child? I am desperately trying to explain how things cost money to my 9-year-old that we recently adopted. I give her an allowance for helping me out, but she always wants to spend it in one shopping trip! PLEASE HELP!

Answer from Carmen:

The best way has two parts. First, use cash. Second, set limits. For example, if you give her $10 for one week and she wants to spend it all at one time, let her. Then, the next day when she wants something, tell her she'll have to wait until the next 'pay' day. Don't give in! (I know it's hard, I've got a girl too!) She's old enough to do math and she's also old enough to feel the 'pain' of having to wait and realizing that she doesn't have to if she budgets herself. Stay strong!

Question from Herb:

I have a high interest credit card. Will it hurt my credit score if I cancel it?

Answer from Carmen:

Herb - It may ding your credit a bit, but that might not be a bad thing if you do not need your score (applying for a loan/mortgage, etc.) and you have a great score in the first place. Over a short period of time, the few points you lose will return.

Complete archive:

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