Working Hard for the Money

Working Hard for the Money

Parents - Stay Strong at the Store (Allowance Tips)

I Discuss Youth Financial Literacy on "The Intentional Parent"

Share Jar - Your Kids Can Help Haiti

If you've been following this blog and my advice about having three jars for your kids - Share, Save and Spend Smart - you're likely to have a kid with a sizable amount in his or her Share jar. If your kids have some money saved up and you haven't done so already, the awful events and desperate need in Haiti present you with a teaching moment that will help them make a difference. Have your kids donate the money they've accumulated in those Share jars to Haiti relief. I read today that relief is starting to fade, so now is a great time to help.

The girls and their jars

Most schools are discussing what happened to the tiny island nation and have collection buckets so it's likely very simple for kids to just bring in their money to donate. We even told our girls that we'd match their donations (and include a little more) with our own donation to the Red Cross.

Helping Haiti

Relief dollars for Haiti from a 4-year-old

-John

PS My wife gets the credit not only for coming up with the idea, but also getting it done AND taking pictures.

Stunning Stats & the Solution!

Here are some stunning stats to think about regarding financial literacy:

-62% expect of college graduates will have a student loan debt averaging $27,236 (Student Monitor)

-Only 11% of workers under 35 years of age indicate they are participating in their company's 401(k). (American Institute of Certified Public Accountants)

-40% will never gain a net worth in excess of $10,000 (American Dream Education Campaign)

-In most cases, economics and personal financial literacy programs are elective classes so “only 12% of Americans graduate from high school having learned anything about money at all.” (FoxNews.com)

-Less than one-quarter of students and only 20% of parents say students are very well prepared to deal with the financial challenges that await them after graduation. (KeyBank)

We spend so much time trying to fix bad habits in teens, young adults and adults. It's not working! When are we going to realize that the lion's share of our focus must be on the children. We must be good habits in our young children.

Still don't believe me? Please read this.

-John

Parental Reality - It's Up To Us

Parents,

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 

students.

-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.

-John

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

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 www.themoneymammals.com.  

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

-John

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).