Take Advantage of Opportunities to Teach Your Kids about Money

One of the biggest benefits of beginning money talk with your kids when they are young is that there seem to be endless teaching opportunities or "teaching moments" afforded to us by them. Kids love to ask questions and providing them answers to such things as...

• "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)

...will help them feel more comfortable with money and money choices. Money is a tool with which kids should be comfortable. Talking to them about it will keep it from becoming a "taboo topic."

By not talking to your kids about money, you'll miss the chance to engage with them in these ultra-important teaching moments. It will increase the chance that money will move into the realm of "taboo topic" and that can lead to misunderstandings and, worse, financial illiteracy when they get older. Talking to them about money doesn't guarantee money smarts, but not doing so carries tremendous risk.

Are you worried they might not understand? You'd be amazed what they can understand at a young age. Check this out:

Choose to Save

Thrive by Five

-John

6 Great Youth Financial Literacy Links

These are some of the top resources that I've found that can help you teach your kids about the value of money:

Allowance Magic - Short, simple authoritative allowance system. Full disclosure - We sell this book on our site, www.themoneymammals.com.

Thrive By Five - What can kids learn about money BEFORE they enter kindergarten? A lot!

Early Childhood Financial Literacy - Great study about the importance of teaching kids and building good money habits young.

Frugal Dad - This Dad is on a mission. Join him.

First National Bank of Dad - I LOVED David Owen's book. His wit and wisdom can help you teach your kids about money. Incredibly well written.

The Money Mammals (www.themoneymammals.com) - Full disclosure - I created this DVD. Like Frugal Dad, I'm on a mission to teach kids about the value of money and I believe it's important to make the process fun. Our DVD is a family affair - my wife and I came up with the concept to teach our kids about the value of money, I wrote the script and my brother wrote the songs. Your kids or grandkids will love the DVD and they'll learn something in the process. If they don't, holler at me (john@themoneymammals.com) and we'll give your money back.

Let me know what you think and post YOUR favorite resources.

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

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

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.

-John

Put It In Writing?

Memorialize your child's commitment to learn the value of money by putting it in writing - or at least make it visual in some way. Just as you should write your own goals down to "train" your brain to follow your direction, writing or memorializing your child's commitment is something to strongly consider if you want to begin their lifelong commitment to money smarts. If you want some help (and an easy way to start), you can print a free copy of a Money Mammals certificate for your kids to help them to commit to share, save and spend smart (Click Here to download certificate). Or have your child make his own certificate. Or simply write something on a piece of paper that you refer to on a continuous basis. I personally like the idea of a certificate because it carries more weight - and it goes on a wall for easy reference. Another idea (or a complimentary idea) might be a wristband so that you can refer to it when you are out the house and out of range of the certificate. As always, good luck and always remember to Share & Save & Spend Smart Too.

Starting Early Is Very Important

Good morning. In the first newsletter for my DVD, "The Money Mammals: Saving Money Is Fun," I included some valuable information from the National PTA that I thought bared repeating in my blog. Teaching your kids about money early is advocated by credit unions, banks, money experts and the National PTA. Below is what the latter has to say.

Get started now:

1. As soon as children can count, introduce them to money. Take an active role in providing them with information. Observation and repetition are two important ways children learn.

2. Communicate with children as they grow about your values concerning money --- how to save it, how to make it grow, and most importantly, how to spend it wisely.

3. Help children learn the differences between needs, wants, and wishes. This will prepare them for making good spending decisions in the future.

-Brought to you by National PTA® by Paul Richard (from FamilyEducation.com)


Let me know what's working for you to help teach your kids about money.

-John