Wednesday, December 31, 2008

President’s Advisory Council on Financial Literacy

I am following up my post of December 11th to let you know that the President’s Advisory Council on Financial Literacy will present its annual report on January 6th. The meeting is open to the public. To find out more, click here.


Thursday, December 11, 2008

President's Advisory Council on Financial Literacy

Just in case you weren't convinced of the importance of youth financial literacy...The President's Advisory Council on Financial Literacy (yes, there is one) is releasing a draft recommendation on how to advance advance financial literacy in the US (check out the top link).

-to expand and improve financial education for students from kindergarten through post-secondary education;

-to support the increasingly important role of employers as providers and conduits of financial education for their employees;

-to increase access to financial services for the millions of unbanked and underserved Americans;

-to identify and promote a standardized set of skills and behaviors that a financial education program should teach an individual; and

-to promote more awareness among Americans of the state of financial literacy and dedicate more resources toward educating Americans on how to improve that.

Granted, these are only recommendations, but it shines a bright light on the importance of teaching young kids (not to mention teens and adults) to share and save and spend smart. Lack of financial literacy in the US is like a disease that has infected our economy badly. It's so important that we marshall as many resources as possible to cure this disease.

You can find out more about the council by clicking here.

Wednesday, November 26, 2008

Mistakes Is Good

There may be no better teacher than a good, old-fashioned mistake.  For a time, my five-year-old daughter had been sinking all of her money into her Save jar after success with goal setting and managing her allowance effectively enough to buy a scooter, shoes and mini pottery wheel (long-term saving for a youngin').  Daddy was happy.  The lessons were working and it made good blog fodder.  But then, suddenly, she started plunking her allowance dollars into her Spend Smart jar.  What was this?!  Regression?  A big mistake?

Whatever it was, it was her choice and it remains to be seen whether she is making mistakes by shifting her focus from saving to spending.  What it certainly means is that Daddy has to heed his own advice to her - allow her to control her own money.  The purpose of the allowance is to teach her about money and making mistakes is part of that process.  We'll see what she does.  And after all, if she does slip up it's ok because, you know, mistakes is good.


Tuesday, November 11, 2008

Graddad's Wisdom - Waiting Compounds the Problem

My grandfather, who grow up in the depression, tells me he doesn't recall a time when he wasn't saving money.  His advice when I headed into the adult world was "live below your means and understand the power of compound interest."   I wish I hadn't waited so long to heed his advice. 

Jason Alderman of Visa posted a very simple explanation of compound interest on the Practical Money Skills for Life site this week.  Here's an excerpt:

"What is compounding? Basically, it's where you put aside money – whether in savings, a retirement account or the stock market – and then essentially leave it alone. As your account earns interest or dividends, you continually reinvest those profits, generating (compounding) additional earnings at an accelerated rate."    

Although compound interest is not an easy concept to grasp, it's not a bad idea to get the concept into your child's head early.  The earlier they get it, the better off they'll be.

Click on the title link to read the entire article.


Thursday, November 06, 2008

Parental Reality - It's Up To Us


To put it simply, financial literacy is up to us.  Don't believe me?  Take a look:

-80% of us think that schools provide classes on money management and budgeting to 

-In reality, only 12% of Americans graduate from high school having learned anything about money at all.

And consider...

-71% of teens say they learn money management from us.

-And only 26% of us with children 5 or under feel prepared to teach their kid about basic personal finance.

Award-winning college professor and Jump$tart Coalition Board of Directors member, John Clow, says it best, "A financial literacy 'buck' is being passed from parents to teachers and back to parents again.  Parents assume that schools are teaching financial literacy, but schools, by and large, are not teaching it.  Teachers, like parents, don't feel comfortable." (The last point was a fact confirmed by Suze Orman on a recent Oprah episode.)

It's numbers like these that led us to create "The Money Mammals" to help not only engage, entertain and enrich kids' lives.  We've discovered, though, that by distilling the message down to its roots (needs vs. wants, making choices, spending smart and other basics) it really helps parents increase their own comfort level and carry forward the lessons from the show into their kids' lives.

We have a duty to teach our kids about the value of money.  Start today.  There really has never been a better time.


Sources:  McCormick and Godstead, Learning Your Monetary ABC's (2006); (2006); Fleet Boston Survey (2003)

Tuesday, October 21, 2008

Stop Reading to Your Kids!

I kid!  I kid!  You certainly wouldn't stop reading to your 2-, 3- or 4-year-olds because you know they can't read themselves.  Exposure to reading is a very important part of emergent literacy and will help them learn to read.  So why don't parents introduce simple money concepts like saving money to their kids at this age?  Ok, some do.  But most don't.  Why isn't "emergent financial literacy" considered just as important?  Just because your little one won't be able to tell you what a credit default swap is (if they can, please tell me) doesn't mean that they should be deprived of the essential building blocks to building good financial literacy habits down the road.  

Don't believe me?  Read the study, "Learning Your ABCs:  The Link Between Emergent Literacy and Early Childhood Financial Literacy" by Martha H. McCormick and David Godstead.

Please pass this message on to at least one person today.  You wouldn't dream of not exposing your kids to reading simply because they can't read.  Exposing them to "value of money" concepts (sharing, saving, spending smart) early is just as important because financial literacy is essential their future well-being.  Give preschoolers the tools to start building good financial habits.  Keep the message simple.  Start with saving.  Continue with sharing and then spending smart.  Want some help?  Try the "Thrive By Five" resource to the right.  Want to make it fun for kids?  Take a look at our Money Mammals program at  

Oh...and don't stop reading to your kids.


Friday, October 10, 2008

Turning the Corner

I see one huge silver lining in the current economic crisis our world is facing - financial literacy is already becoming a huge, hot topic.  I've seen a marked increase in articles promoting frugality and even teaching kids about money.  Not surprisingly, it takes a massive calamity to open people's eyes up to the importance of something.  Let's hope that the sudden new emphasis on frugality can lead us to the promised land - a nation of people who save at least 10% of our disposable income.  There's never been a better time for all of us to become money mammals.


Friday, October 03, 2008

Needs and Wants Redux

Needs and wants. It's incredibly important to distinguish between the two. I've talked about this before, but it bears repeating. Why? I heard a report on NPR this week about an Audi dealership owner saying that the current economic crisis was keeping people from their transportation "needs." Hmmm. An Audi is a beautiful car, but it could hardly be considered a need. Even in car-centric Los Angeles, there are a number of options that would fulfill a car need at a much lower price. All of us with kids should think about this lesson - pay particular attention to your use of the words "wants" and "needs," especially when they are within earshot. We all know that kids ape our behaviors, and using the words needs and wants appropriately might help them better understand the difference.


Thursday, September 25, 2008

When Tough Times Affect the Kids

Read Sue Schellenbarger's article in the Wall Street Journal today. She has some terrific points about how we can talk to our kids about how the current financial crisis is affecting our families.

Here's a snippet:

"A 20-year study of 450 families with school-age children who were hit by a deep Farm Belt recession in the 1980s shows the psychological impact on kids can be signifcant and enduring. Rand the University of California, Davis, and others, found financial woes often fueled anxiety, depression, behavior problems and poorer peer relationships in kids...The most successful families in Dr. Conger's study were those who 'managed to keep their priorities on the family itself,' remaining close and working together to solve problems, he says. To his surprise, kids didn't seem to mind that they lacked spending money."


Monday, September 22, 2008

Rethink It

Do you and your family feel pressured to get gifts for relatives or friends? A sagging economy gives you an opportunity to address this pressure head on - people are more likely to be foregiving when you replace your $50 gift card presents with a $20 donation in their name to charity. It seems that many of us spend a lot of time and stress trying to figure out what presents to get for our adult friends. This is fine if you truly want to get presents for particular friends and relatives, but what if you're only buying presents because you feel like it's the socially acceptable thing to do? And what if you're buying long distance presents based on a list that's been delivered to you?

Rehink it. For your close friends, shouldn't just grabbing a drink or dinner together (and it can be cheap!) suffice? For long distance friends and relatives, what's the point of buying something for them, particularly if you've asked the person what he/she wants. And a long-distance gift card? I used to think this was a good idea (I love gift cards as much as the next guy), but, seriously, what's the point. Birthday recognition, right? Why does spending money have to go hand-in-hand with this? Why do you think? Because we've been conditioned to do so. I think big advertising might have a little to do with this.

Rethink it. If you happen to run across something perfect for a friend and it fits in your budget, by all means get it. But what's the point of sending your dad a $20 Amazon gift certificate when can't necessarily figure out how to use it. Rethink it. If it's about birthday recognition, block out more time to talk than you normally do. Make a small donation in someone's name to a charity that is meaningful to them (perhaps in search of a cure for a disease that affected their parents). Write a long email. Sing them a song. Just don't buy something if YOU think there's a better way. Rethink it.


Thursday, August 28, 2008

Stand Strong

On the path we are traveling to teach our children (this generation) to be smart with money, we must be relentless. When your friend tells you to "lighten up" and "just let them be kids," stand strong and tell them that amassing an army of toys is not being a kid. Turning a discarded box into a home for your dolls - that's being a kid.

When you feel guilty that you gauged the success of your birthday or the holidays by the volume of the haul (yep, that would be me too), stand stand strong and realize that you were enlightened by going down that path. You know that going down that road is like playing an unwinnable game. If you don't want to shower your child with gifts (from you or anyone else), don't let it happen. I know it's not easy, but it's your choice. Stand strong.

And when you see a behavior that you don't like, help them to change it. If you think YOU might be the cause of the behavior, stand strong and work it out together. I remember when my daughter first used an unacceptable word (I'll admit that I felt a pang of pride that she used it in context...but that's not the point). It was obvious to my wife and I that she had learned it, surprise, from us. So, in order to avoid looking like hypocrites, we decided that anyone (mom, dad, her) who used that word would be sent to time out. Our method worked (it's nice when ONE of your method's works). If you think your behaviors might be negatively influencing your kids, change them.

A root cause of this country's current financial crisis is lack of education. It's time to teach our kids to be money smart. The premise is simple - save, share and spend SMART. Because the pressure to simply spend is so great, though, the execution is difficult. We're in this together. Stand strong and believe that we can help our kids.

Tuesday, July 22, 2008


Today's New York Times article, "Given a Shovel, Americans Dig Deeper Into Debt," inspired this post. Click the title above to read the article. Or you can start with these lines from the article as food for thought:

"For decades, America’s shift from thrift could be summed up in this familiar phrase: When the going gets tough, the tough go shopping. Whether for a car, home, vacation or college degree, the nation’s lenders stood ready to assist."

"As the profits in this indebtedness grew, financial companies [credit card companies, mortgage lenders] moved aggressively to protect them, spending millions of dollars to lobby against any moves lawmakers might take to rein in questionable lending."

"Eliminating negative feelings about indebtedness was the idea behind Mastercard's “Priceless” campaign, the work of McCann-Erickson Worldwide Advertising, which came out in 1997."

All these excerpts made me think, but the last quote truly gave me pause. The "Priceless" campaign has been an incredibly successful campaign (who hasn't made up their own version of the commercials), but it's underlying message is certainly damaging - that we should feel good about indebtedness. Debt is good!? We need to educate ourselves and our kids so that we (and most importantly, them) are not slaves to credit. See my previous post about "The Money Mammals Challenge" or "Goals" and start teaching your kids (and maybe even yourselves) today. Financial literacy education and being debt-free is priceless.

Friday, July 11, 2008

"Cluttering Down"

Kids like things. That seems to be a fact of life. Heck, we all seem to like things...probably much more than we should. In my ongoing effort to reduce clutter, I have tried a solution with my five-year-old that seems to be working. In addition to giving away something each time she receives a gift (let's call it "gift neutral"), I've implemented an even more novel system that I call "Cluttering Down." My daughter loves bags and purses and containers in general and I receive lots (read "too many") promotional bags and containers from various vendors. I initially resisted giving her these items as they just added to our clutter pile - until I saw an opportunity. If there is a bag/container that she wants (and I don't need it and think she might actually use it), I tell her that she can put 3-5 old toys or things in a bag for Goodwill. She does this willingly (with minimal whining) and she typically accompanies me on the trips to Goodwill to drop off the old things. This works well for a number of reasons:
  1. Some other kid will get to play with toys that she's not using.
  2. It reinforces the important concept of "Sharing" with others.
  3. It reduces the amount of nagging I have to endure at home.
It's arguable that number three is the most important because without it, this blog probably wouldn't exist. I might be locked up somewhere, muttering to myself about being overrun by an army of dolls, trucks and beads.

Let me know if you have any success "cluttering down," and remember that the ultimate goal of all of this is to reduce the amount of things our family accumulates and values.

Good luck.


Thursday, May 29, 2008

Age Old Goals

I've advocated the idea that saving for a short-term goal is a good way to teach young kids about the value of money. So, for example, during the Money Mammals Challenge, my daughter saved her weekly allowance over a month to buy a new shirt (she's now five and needs some new clothes). My wife and I both saved for tangible things as well so that she could see that we were engaged in the Challenge as a family. As I've noted in this blog, I've used this approach of short-term savings goals numerous times in order to teach the concept of saving. My wife - who is much more financially savvy than me - asked me if it's such a good idea to associate saving so directly with spending, albeit delayed gratification spending. I told her that I thought it was, but I figured another source could more effectively make my case. So I turned to a classic. I read a nice piece in a terrific book I picked up from Amazon from 1969, The Time-Life Book of Family Finance. This 40-year-old tome makes a terrific case for the need to be practical in our approach to teaching kids to save:

"One idea about money that nearly all parent try to inculcate in very young children is the importance of saving. The effort is frequently wasted, perhaps because so many people go about it in the wrong way. Too often saving is not presented in its true light, as a practical method of satisfying needs and desires, but as a vague ideal, a Good Thing symbolized by the ubiquitous piggy bank...Saving can be either a negative action - a self-denial - or a positive action leading to some desired goal. For most of us, saving must be positive: The desire for some future good has to be stronger than that for an immediate satisfaction...the reward must always be attainable and attractive. If it is not, we will not save, and neither will Junior.
Against this backdrop, let's try to imagine what goes in Junior's mind vis-a-vis his piggy bank. [When he receives pennies] he is instructed to "put them in Piggy." This is accompanied by smiles and a general air of "we're doing a good thing." It seems to be a game that adults enjoy playing, possibly because of the interesting noise the pennies make when Piggy is shaken. It is also an interesting kind of magic, because the pennies do a disappearing act. You never see them again. In fact, Junior is admonished that you never take money out of Piggy. That money is being saved.
It is not clear what Junior is learning from all this, unless what the parents have in mind is training him to be a miser. It certainly is not teaching him that a deferred use of money can be more satisfying than a present one..."

The article also makes a great case for using clear or translucent savings jars or banks.

Tuesday, May 13, 2008

Books That Help Teach Kids About Money

I stumbled across Susan Beacham's blog and found this terrific post about children's books that can help teach kids about the value of money, addressing topics like setting goals and making money choices. Moreover, she's separated her selections by age level, making the list that much more parent-friendly. For those who may not know it, Susan is the creator of the Money Savvy Pig, a terrific all-in-one bank that is available at


Saturday, April 26, 2008

Frugal is Cool!

An article in today's NY Times noted that the recession has brought frugality into vogue. Let's hope that this is more than temporary. Click here to read the article.


Tuesday, April 15, 2008

Coloring Is Cool - Going Green Saves Green

With both Earth Day and Credit Union youth week coming up next week, I just had to post this really cool coloring page we created with our friends at for our Money Mammals "Saving Money Is Fun Kids Club." One of the panels is specific to the club, but the overall message that Going Green saves Green is universal. We hope you download it here and print it out and use it with your kids, class or whomever else might enjoy it.


Saturday, April 12, 2008

Interesting - Compounding for Kids?

I came across an interesting post on - he taught the concept of compounding to his eight-year-old. Good stuff.


Wednesday, April 09, 2008

Financial Literacy's time is NOW!

A terrific recent article in The Economist (click the link above) highlights the global push towards improved financial literacy. It shines a bright light on the desperate need for financial literacy worldwide and it underscores two of my core beliefs and what drives The Money Mammals project:

1. TEACH KIDS YOUNG - Jeroo Billimoria, a social entrepreneur who founded Child Savings International, teaches kids 6-14 in 35 developing countries about money through a course called Alfatoun ("Explorer"). She notes that it's imperative to start young because "by 14 most of their habits are formed." Not surprisingly, she encountered skepticism but has fought past that to create a successful worldwide financial literacy program for youth.

2. USE NOVEL METHODS - Lewis Mandell, winner of the William E. Odem Visionary Leadership Award in financial literacy, says, "clearly the way we are going about teaching personal finance needs to be improved" The article notes, "the only classroom method that seems consistently to raise financial literacy among high-school pupils is playing a stockmarket-investing game - which rewards taking high-risk bets."

Kids need to be engaged to be educated. Bland presentations or classes don't cut it. Saving Money Is Fun?! It can be.

It is clearly important to do something and to do something for our children NOW. We cannot wait. We all must work together to improve financial literacy education in this country. But we also can't wait for education system to handle this. Take advantage of the numerous services offered by many of your local credit unions to help teach you and your children about financial literacy. But more than anything else, start educating your kids yourselves. If your discomfort with the subject is holding you back, keep it simple. Teach them to share, save and spend smart, understand the difference between needs and wants and to make smart money choices. Want to get started? Take The Money Mammals Challenge (see previous post this month).

Monday, April 07, 2008

The Challenge Continues

How is your Money Mammals Challenge going? I thought it might be helpful if I posted a completed challenge sheet right here. Take a look and you'll see that our daughter is saving for a new pair of shoes. She's turning five and tells us (oh, about every five minutes) that she's getting bigger and will need some new clothes and shoes that fit her better. This is a bit of an exaggerating (she's doing just fine with most of her clothes), but her choice was pretty practical and she could use some shoes. $3/week (her allowance) will net her $12 by the end of the month. Enough for the pair she'd like.

We used to have a beautiful hibiscus plant that recently died so my wife is saving for a replacement plant - a new palm tree. We're lucky enough to live in Southern California and she's always wanted one of these iconic trees.

I have a good friend who has multiple sclerosis and I missed the MS Walk in which my wife and kids recently took part. So I'm saving to "Share" my money with MS. $80 is only a dent, but it will help.

For the month, my wife and I will be making a point to show our kids the money going into our clear "Save" and "Spend" jars for the month. I want them to physically see that the money is being saved and that's it's accumulating over time (albeit a short time).

Comment here to let me know how your challenge is going.

Sunday, March 30, 2008

The Money Mammals Challenge

Fellow Money Mammals,

April is now my favorite month. Why? Well, it's National Financial Literacy Month of course. It's a great opportunity to spread the word about youth financial literacy. I'll be doing a live Money Mammals event in Eureka, California, later this week sponsored by the Consumer Credit Counseling Services up there. Then I'll be heading to DC to for Financial Literacy Day on Capitol Hill with the Jump$tart Coalition for Personal Financial Literacy to help spread the good word.

But I wanted to do more. I thought long and hard about how to make this month more relevant to all of us and our kids and I think I may have come up with a compelling idea...

The Money Mammals Challenge. And we want you to take the challenge with us.

It's simple. You and your children each set financial goals to achieve this April 2008. Download this super-simple worksheet here and put pictures of you, your little savers and, most important, pictures of the goals you will be trying to achieve. They need to see the goals. Also, make sure you're saving money in a jar or something so that they can see your money being saved as well as theirs. As the sheet suggests, break the goal into four parts and enter those incremental amounts into the weekly rows. I've tried the goal-saving approach with some success (see my previous blog posts) and I think it can work for you.

Let us know how you're doing by adding comments to this post. The second step in the challenge will be to spread the word. More on that later.


Monday, March 17, 2008

Goal-Setting for Kids

So it wasn't a one-time occurrence.

Immediately after having success with pasting a goal on my daughter's bank to encourage savings (see 12/26 post), I decided to ask her if she'd like to try it again. She did, picked out a scooter that she wanted and, lo and behold, she successfully saved again. Most importantly, she allocated most of her allowance EVERY week to saving for this goal. Over the course of almost three months, and with a little help from her friends (read "grandmother"), she saved enough to purchase a scooter that she wanted.

To those who might downplay the importance of starting young, don't underestimate the importance of starting this process sooner than later. Learning to delay gratification is a very important trait that your kids can develop early. Columbia University Psychologist Walter Mischel found a link between preschoolers who displayed this trait and future success. He found in follow up studies that preschoolers who displayed this trait were better adjusted and achieved more academically. Want to know more? Click here.


Sunday, February 17, 2008

Susan Linn takes on McDonald's

Many of you may have heard about McDonald's rewarding children at Florida's Red Bug Elementary School in Seminole County with free Happy Meals for good grades. I was appalled by the idea (I don't think grades should be rewarded with money or prizes, period). Luckily for all of us against the concept of advertising on report cards, Susan Linn of the Campaign for a Commercial-Free Childhood led a campaign to halt the practice with the support of almost two-thousand parents. McDonald's has terminated the pratice as a result of this campaign. Click on the link above to read the press release about the campaign's success.

I also highly recommend watching Stephen Colbert's take on this topic at


Saturday, February 02, 2008

Start Money Lessons Early - Avoid UK Card Users Fate

I just read a post by Paul Michael on the terrific finance blog, Wisebread, that the UK banking giant, Egg, is now blocking over 160,000 credit cards - protecting the cards' owners from themselves.  Paul expresses surprise that this didn't happen in US - it's likely only a matter of time before this happens here.  I think it's sad that it's come to this for some and it only reinforces my belief that we must not wait to teach our children about money.  Let them make their mistakes NOW - before they face a situation as dire as those in the UK.  We truly can't afford to wait.