Share - Charitable Giving For Kids

The least utilized used bank in my daughter's Share / Save / Spend Smart bank set is that pesky Share (charitable giving) one.  I say pesky because we need to provide here more guidance.  We require that she put $1 of her $4 allowance dollars (she's 6) in Share and she did give to a Leukemia society last year, but I think it's time to bring the goal-setting ideas we use for the Save bank (which have worked) to the Share bank as well.  I thought this article on eHow was very helpful in giving us a framework to create a better Share program.

-John

Twitter Updates

Don't forget to check out the interesting information and articles I'm tweeting about on the sidebar to the right.  

My Twitter Account

Financial Distress? Focus on Family

"I don't want my kids to be stressed about our financial situation.  They're too young."  One mom said this to me at a recent event and because it has become such a common refrain, I felt that I needed to highlight a post I made about Sue Schellenbarger's WSJ article last September.  It's even more relevant today.  Many families are in serious financial distress and a common reaction to this is to shield the kids.  This is virtually impossible to do.  Your kids are going to feel your stress and if you don't explain to them what's going on, they'll make their own leaps.  

Talk to your kids about difficulties you might be having and assure them that you are working to make things alright.  Enlist them to help - they typically want to be involved.  Give them simple things to do (e.g. don't run the water while brushing teeth, turn lights off when you leave a room).  Use Ms. Schellenbarger's article as a guide for your conversations and, if you still don't believe that involving your kids is important, look at they study she cites about the importance of focusing on the family in times of distress.  Your problems are your family's problems.  Face them together as a family.

Allowance for Obama Kids

Janet Bodnar of Kiplinger is right on the money when it comes to the Obama kids, Sasha and Malia, and how their parents handle their allowance.  Janet points out that the paltry $1 allowance they each get is likely counterproductive.  There is virtually no way that 10-year-old Sasha is going to learn about money management by receiving $1/week.  Think about it.  If she saved for one year - an eternity for someone that age - she'd have $52.  What could she buy for $52?  A pair of sneakers?  Maybe.  A videogame?  Again, maybe.  Very little that would likely convince her that the time was worthwhile.  

I hope that Janet's article makes its way to the president's desk.  I won't hold my breath waiting for that to happen, but I will suggest that it's very important for us as parents to have an allowance system that is not tied to chores and allows kids to save an amount of money that would have a stronger psychological impact on them.  

For example, imagine if Sasha were to receive $10/week and her parents incentivized or required her to give some portion to charity (say $1 or 10% per week), save some portion (minimum 10%) and then allocate the rest as she saw fit (with guidance and requirements that she would have to pay for some amount of her own clothes and/or friends' gifts).  Then, at the end of the year, she could give $50 or more to her chosen charity (think of the potential impact on other kids) and save $200 or more for a goal she set with the assistance of her mom & dad.   How about a custom bed for the new dog?  What an opportunity for the Obamas.  I know they're busy, but I hope they listen to Janet.

-John

Money Mammals in Wall Street Journal!

My DVD, "The Money Mammals: Saving Money Is Fun," appeared in the Personal Journal section of The Wall Street Journal on Thursday.  Click here to check out the piece on "Toys to Teach Saving Savvy."  

Willa Plank writes about the DVD, "Teaching simple concepts such as money transactions, saving allowance money, and sharing in the form of gifts through catchy songs and funny dialogue, it isn't hard to see why our 5-year-old tester enjoyed it."  The article reviews other financial literacy products for kids, including The Money Savvy Pig, The Millionaire Kid$ Club books and Big Pay Day.  

It's great news for all of us involved in getting the word out that it's imperative to teach kids about money as early as possible.  

-John

The Thrift Shift?

I heard a very interesting story this Thursday on NPR's Morning Edition.  Linda Wertheimer chatted with the Wall Street Journal's David Wessell about the recent rebound in the savings rate from near zero to 5%.  

Click here for a link to audio and print

Click here for NPR's Savings Rate Tracker

I'm hopeful but skeptical that America's relatively sudden interest in saving will keep but I'm mostly curious to know what you think.  Once conditions improve economically, do you think Americans will go back to their spendthrift ways or do you think that the current crisis has or will radically alter American consumption and that we're entering an "Age of Frugality"?  In short, are we seeing a "Thrift Shift?"  Please comment.

-John

President's Council Report

"While there are many causes to the economic problems facing this country, it is undeniable that lack of financial literacy is a contributing factor."

-Charles Schwab, Chairman of the President's Advisory Council on Financial Literacy

You can click here to read the 2008 report.  

Keep in mind that although I have highlighted this very important government foray into improving financial literacy in America, I still firmly believe that parents are at the heart of the solution.  Although we should all appreciate the effort being put forth to improve youth financial literacy on the national and state levels in our schools, children will ultimately learn their most important lessons from parents who model behaviors, good and bad, for their children.

-John