Thursday, November 18, 2010
I thought it prudent to share some of the ideas I've been sharing with my friends. Here are five really practical reasons for parents to start teaching kids about money that I've learned from personal experience as a parent:
1. A Strong Foundation - Building good habits early (which includes making some minor mistakes along the way) will help you avoid having to break bad habits later (or REALLY big mistakes).
2. Have Mall Fun - A good allowance program will make trips to the store or mall so much easier. When your kids ask you for something, you can tell them to save for it. You might get a few tantrums when you first start doing this, but if you stick to your guns your kids will get it.
3. Goals are Good - Setting goals is essential to teaching kids about money (that's how they deal with #2) and is an incredibly valuable life skill for them to learn. Set goals together. Note to self - follow your own advice more often on this one.
4. Confident Kids - Money is subject to so many taboos, not the least of which is discussing the stuff within the family. Set an allowance, give them cash to handle and discuss making choices, needs and wants and other essential money concepts. It will help make them more confident consumers when the subject is brought out into the open.
5. Visible Dough - So much of the transactions that kids witness involve invisible money. Make sure there is a physical component (cold, hard cash) to your allowance so that kids can count, transact and get confident with real money. Sure, money is already largely virtual and is only trending more in the total virtual direction, but young kids have tremendous difficulty with abstraction. Handling actual money is essential to early money learning.
I hope these tips help you. Let me know if they do or if you have anything else to add.
Tuesday, April 20, 2010
Wednesday, March 31, 2010
- "Why can't we go out to dinner again tonight?" (discuss the family budget or the cost of doing so)
- "I really want that American Girl doll. Can you buy it for me?" (talk setting goals and saving)
- "Why do I have to put money in my Share jar?" (it's time donate those dollars - make it tangible for them)
Friday, February 19, 2010
Many people don’t equate sharing as a money management concept. However, it is an essential part of money management. In order to share you need to save or give of your time. In light of today’s economic fallout, I can not agree more that we need to teach our youngest kids the concepts of money management. There is a direct connection between those that are financially savvy and their awareness of basic financial concepts. Granted, this economy has thrown many people off track and in many cases certain financial institutions added to the financial burden that they are experiencing. There are so many factors that have created the perfect storm for so many folks. Between the sub-prime loans, cheap and easy credit, the rise and subsequent fall of home values, the declining economy, increased unemployment and questionable lending practices affected many families who were not prepared for what lay ahead. However, I recently received an email from a young adult that has a college degree, his dream job and is trying to save his home in the foreclosure nightmare. He stated that “he did not know that an interest only loan was the worst method to pay his mortgage.” We have gaping holes in our financial knowledge that has had a direct affect on the financial success of individuals especially in this economy.
Kerrie presents @ Building Hope foreclosure seminar
For the past year, we have been helping our middle class and upper middle class families with their financial struggles. Lack of savings combined with the loss of jobs and industry declines have affected the majority of families living in the counties we serve. Many of them looked at their homes as a source of borrowing. I often ask myself if the majority of folks had been taught financial concepts from the time they were 2 or 3 years old would we have as many families in trouble as we do in our nation. Recently a father said to me that his 16 year old did have the competence to understand how to handle money! If we start at the high school level we are too late. They have already formed habits and they have been watching their parents and relatives struggle with their own money issues. How different would it be if everyone at age two were taught the very basic of sound money management concepts? They would grow up to understand needs vs. wants, how to set goals, saving, sharing with others and how to be a smart consumer. Kids need to learn about saving for goals, giving back to others and using common sense in their spending decisions. I think we would have fewer families losing their homes, using all of their savings and retirement money to “stay afloat” and more prepared for rough times that they are experiencing today. The affect on our families, our communities and our nation would be much brighter and we would have a more stable financial future. My question is how long is it going to take for us to understand that financial literacy is a life skill as important as looking both ways before we cross the street?