Say Yes to No

Minnesota has launched a new campaign, "Say Yes To No," that encourages parents to be more active in setting limits on their children, particularly when it comes to consuming media - which are filled with "yes" messages. Why? The site link above notes that "The constant barrage of “yes” messages undermines crucial character traits for success, including self-reliance, respect, integrity and the ability to delay gratification." The campaign promotes Dr. David Walsh's new book, "No. Why Kids – of All Ages – Need to Hear it and Ways Parents Can Say It," as a way of addressing the "yes" syndrome in our culture.

I haven't yet read the book, but I love the concept. It immediately reminded me of a recent conversation. My friend - a company president and someone with tremendous means - told me that he was having diffculty getting across the concept of saving with his 5-year-old. I probed a bit and found that his real problem was that he was having a difficult time saying no to "small requests." These requests (toys, games, etc.) were adding up and he was feeling that his child was beginning to become one of those "entitled" types. The irony of this was staggering - the wealth he had amassed by embodying the traits above was enabling him to potentially deprive his son of those very important traits. I told him that he really needed to learn how to say "no." Sure, he can afford most anything his son would like, but perhaps it was time to use the phrase, "it's not in our budget." It's just one way to "say yes to no."

Road to 10%

How long will it take us to get from a sub zero savings rate to 10%. Likely a generation. But steps like the bill being considered in the California legislature can help. AB 150 is a "first step" bill that will establish the California Literacy Council and create a state clearinghouse of financial literacy information for California schools. As I've said before, understanding personal finance is as crucial to a kid's well being as learning multiplication tables and your ABC's. The California Jump$tart Coalition (of which Snigglezoo Entertainment, our company, is a member) is focused on bringing financial literacy education to every child in California. This bill is a good first step. Currently, only seven states require that high school students take a personal finance course to graduate. This number should be 50. In time it will be.

"The Fourth R" - The Real World

I recently took part in a conference call hosted by Robert Duvall and the National Council on Economic Education (NCEE) announcing their "Report Card – Survey of the States: Economic, Personal Finance, and Entrepreneurship Education in Our Nation's Schools in 2007." The upshot? Kids are not learning what Mr. Duvall referred to as the "The Fourth R - 'The Real World'" The report notes that "the majority of students aren't receiving the essential real-life economic skills they need to become knowledgeable consumers, prudent savers and investors, and productive members of the workforce." It's this fourth R that is arguably as important as the other three (you remember, Reading, 'Riting, and 'Rithmetic). It's so exciting to be a part of those on the vanguard of getting this most important message out - particularly to very young children - so that we can help cement behaviors that will serve them well throughout their lives.

Give Kids Credit (Not that kind of credit)

This morning, I was perusing an article about teaching kids about money and the author suggested that you should start giving an allowance when kids begin to understand the concepts of saving and spending. I agree. Then the author said this should happend around first grade. First grade? Hmmm...my kids certainly have learned about the concept of spending money much earlier than that and saving money is something they can understand by the time they reach kindergarten (if not before). We need to give kids more credit (not that kind of credit) for their ability to grasp concepts earlier and, therefore, I think you should start them on an allowance earlier than first grade. Earlier is better, because the forces teaching kids to be irreponsible with money are certainly not waiting and an allowance is one of the best tools to start teaching your kids about the value of money. Let them make mistakes with the money young, seek out the teachable moments when they make them, and hopefully they will learn and we can raise a generation of kids much smarter than us when it comes to money.

Young Kids and Money - Rich or Poor

My family is always sending me articles relevant to our business and today's mail proved to be no exception. My Dad, a retired banker, sent me a piece from the June 2007 issue of the Parsippany monthly. Though the article addresses four topics for "Teaching Children the Financial Facts of Life" (article by Steven Brisgel), two items resonate for me. At the beginning of the article, Steven mentions that many young people may receive "sizable inheritances." Kids of wealth have difficulty with "value of money" issues just as poor or middle-class children do. It likely stems from the same problem, though, and that is the emphasis society or parents put on material things. Which brings me to the Steven's first (and arguably most important) topic, "Be a Role Model." This is one of the most difficult areas for any of us to address, particularly if we have developed any bad habits (which would be about 100% of us) over our lifetimes. We all know that kids do what you do, not what you say, and it is IMPERATIVE that we are mindful of this axiom. One thing that we try to do in our household is be mindful of our use of the terms "need" and "want." Put your attention on this during the day and you'll see what I mean. Adjust what you say accordingly - making sure that you are using the terms properly. And gently correct your children when they identify a want as a need. Nobody really needs a nightgown emblazoned with their favorite character. Do they?

Lessons for Preschoolers

Numerous parents have asked me if there are any resources on the web to help them teach their preschool kids about money. One of the best set of resources I've come across is distributed free by the Credit Union National Association, Thrive by Five. The lessons are super simple (very important for this age group) and pretty fun. Try them out and let me know what works for you.

All the lessons are in both English and Spanish. Pretty cool.

-John

"This Doesn't Fit Into Our Budget"

My 3-year-old always asks to buy stuff when we go into a store. To anyone who has kids, this certainly isn't a shocker. So how do we deal with it? In her book, Money Still Doesn't Grow on Trees, Neale S. Godfrey says that if you should remember only one piece of information from her book, it's the phrase, "This doesn't fit into our budget." My wife and I use this line all the time. Our daughter is three so she keeps pushing, but I think she's starting to get the point. Why this line? Neale looks at the primary alternative line, "We can't afford it," and says "...that it doesn't mean anything. In fact, you probably can afford it." Saying that something doesn't fit into a budget will also help us segueway into a larger discussion about budgets when the time comes (of course, we think three is a little young). I have a friend who is also a financial representative and I was impressed by his dogged use of the "budget" line with his 4-year-old the last time we were out. It worked to quash the requests pretty effectively. I was also secretly giddy that his kid suffered from the same consumption issues as our daughter. Let me know what's working for you.

Neale's book is available at most major booksellers.

-John