I Discuss Youth Financial Literacy on "The Intentional Parent"

Just Add Kids

We are really fortunate. Our Money Mammals teaching guide, for kids 1-2, just won the Oregon State Desjardins award for leadership in youth financial literacy, courtesy of Rogue Federal Credit Union and Kerrie Davis. Thanks, Kerrie! I also happened to be using the teaching guide this week in my daughter's K-2 class at Larchmont Charter Schools here in Los Angeles, California. The guide provided a nice framework for a "Share" (charitable giving) lesson tied to the school's Thanksgiving food (and money) drive. I brought in some jars and the kids decorated them with fun Share labels and Goal labels for the amount they planned to save over the two weeks until the Thanksgiving drive ended. I enhanced the lesson with video from my show.

The kids really enjoyed setting the goals and I just know that they will do an incredible job bringing in food and money for the needy. The take-home lesson for me was that, once again, you just need a good framework and just add kids. The kids are ready to learn about many aspects of financial literacy at a young age (five and six in this case) and they make any lesson so much more than you could have imagined prior to going into the classroom.

Share - Charitable Giving For Kids

The least utilized used bank in my daughter's Share / Save / Spend Smart bank set is that pesky Share (charitable giving) one.  I say pesky because we need to provide here more guidance.  We require that she put $1 of her $4 allowance dollars (she's 6) in Share and she did give to a Leukemia society last year, but I think it's time to bring the goal-setting ideas we use for the Save bank (which have worked) to the Share bank as well.  I thought this article on eHow was very helpful in giving us a framework to create a better Share program.

-John

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.

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.

Starting An Allowance

At one of our recent super-fun live "Money Mammals" shows, a parent approached me about starting an allowance for her 5-year-old. I figured it was a good time to share the approach our family is taking as it might be helpful for others. We've just started allowance for our 4-and-a-half year old and I've begun by using David McCurrach's book, Kids' Allowances, as a guide. I like this book because it's simple, includes a survey of what parents of various age kids do r.e. allowance, cites various experts on youth financial literacy, and provides you with a structure to provide allowance for your children. The author is also experienced - he has honed his method on both his kids and grandkids. And he's not "preachy" or condescending, refreshing when you consider the approach of some financial self-help gurus today.

So what are we doing? We are using a three bank system (Share, Save, Spend Smart) and she's getting three dollars per week - two dollars and four quarters. Providing the money in different denominations provides us with a teaching opportunity each week (e.g. four quarters equals one dollar - and you can change up the coins each week). She is required to put two quarters into the "Share" jar (for donations) and two into the "Save" jar. At her age, we're making saving tangible by putting a picture of a savings goal on the bank so she knows that she's saving for something. She can do what she pleases with the other two dollars - put them in the "Spend Smart" jar or either of the other two (Save or Share). We are not tying our allowance to chores and we will revisit our approach at least every six months. At some point, we may consider some type of savings matching to encourage savings and I envision giving her complete control of her allowance (no mandates) in a few years.

I hope this is helpful and good luck to all parents out there. Remember, it's most important to just do something. You can't afford not to teach your kids about money.

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.

Teaching kids to share - a simple idea

I was talking to a good friend recently and she mentioned a great, easy way to help teach your kids to share their money. If you happen to go to a place of worship that takes donations, have them regularly donate some amount from their "Share" piggy banks (or wherever they're saving it) to church on a weekly basis (or however often you make it). I thought this simple piece of advice was very useful because kids typically have such little money to donate and doing so to larger charities requires a little more work and might even be considered a bit too abstract for them to understand. In the church example, they can see that their money is going to something more tangible and they will feel more a part of the congregation. As any of you with kids know, anything they can do to make them feel more "adult" really makes their day. Of course, we parents are in no rush for them to grow up...but that's a story for another blog.