How to painlessly sneak in money lessons for your kids in 2010

Here are three of my top things parents can do in 2010 to bring (ok, sneak) money lessons into day-to-day family time, in simple and fun ways. Great for parents who want to do small things for their kids that add up to big, long-term results.

1. Read books/watch movies that help teach about money.

Sharing stories or great movies with kids is a great way to add in a bit of money training. Find books/movies with direct money lessons/messages like The Giving Tree by Shel Silverstein or The Grinch Who Stole Christmas, by Dr Seuss. You can also find other books and movies that help open a conversation around a money value or concept. For example, Charlie and the Chocolate Factory is a great story to discuss what families have and don't have, about what is enough, and about winning and loosing, etc. Lots and lots of good choices to pick from.

2. Take advantage of the teachable moments that arise each day.

Consider weaving a bit of money training into day-to-day activities like going to the grocery store, piano lessons, or getting ready for the next birthday party. These activities provide endless opportunities to share money values, discuss the "how and why" of money and teach basic concepts and principals to your kids in small bits, over time.

• Money Wizdom Money Moments email tips are full of ideas and inspiration for grabbing (or creating) teachable moments and making the most of them. Click here to sign up for the free weekly email.

3. Start kids managing their own money.

All kids need to learn how to balance saving, spending and sharing their money. When kids have money to manage, the "I want it now" requests stop, kids become better at making decisions, learn how to delay gratification and become more aware of the value of things. The key is to give kids money responsibilities commensurate with their developmental level.

• If you have a 5-8 yr old, click here to download our free Money Wizdom budget program Quick Start Guide. Four simple steps to get your kids up and running today!

At the end of the day, the more we expose kids to money choices, and give them plenty of opportunity to practice making money decisions - we will set them up for a much better and financially sound future.

Why Teach Kids About Money?

We teach young kids about money to ensure they build the skills necessary to make informed financial decisions throughout their lives. The life-long benefits of teaching kids good money habits and skills will make it well worth the effort.

Where do young kids learn about money anyway?

Pretty much everywhere — and especially at home! Young children learn about money by what they see, hear and experience in the world around them. They primarily learn about money by watching their parents use and talk about it. They are also keenly aware of how their parents feel about money by watching facial expressions, listening to word choices and tone of voice.

If you think about it, money is part of most of our daily conversations. We consider what we need (or want), if we need (or want) it now, go through the process of buying it or deciding to do it another day, embrace or bemoan a prior choice, plan for tomorrow, etc. As a consequence of the ever-present money conversations happening at home, kids are exposed to the ongoing successes, struggles and the unending money decisions of every day life.

Why do parents hesitate to teach the skills?

Parents tell us they want their children to grow up with the skills to handle money wisely — yet they often do not feel comfortable teaching children to manage money. Some parents feel they are not qualified, or that money is just not supposed to be discussed with kids. Other parents believe schools should be responsible for teaching kids about money. Others still tell us since they never had training and seem to be doing ok, so there is no need to teach their kids. We recommend parents take the time to teach children about money regardless of their income, their current knowledge level or how they were raised in order to fulfill on their wishes to see their children build money skills that can serve them throughout life.

When should the training begin?

Training, in our view, should start when kids are young — by early elementary school age when money habits are already being formed. We encourage parents to think of their kids childhood years as a money apprenticeship. From pre-school until high school graduation, with parental guidance, children have a chance to practice using money with little risk. And with responsibility for making independent money decisions (with plenty of room for making mistakes), children can learn that money is just a tool — something to be understood, continually learned about and used wisely.

What is the bottom line?

You do not have to be an expert to teach kids money skills and habits. We would like to show parents and other money mentors that it is easy to provide suitable learning opportunities and experiences for children to build good money skills and habits. Please check out our resources for working with your young kids (more resources coming soon for older kids) and let us know if you have any questions. We are here to help, so do not hesitate to ask.

Budgets. Yuck. Who Needs One!

Everyone. Period.

A budget is the tool to manage what we choose to do with the money that comes in and goes out to support our life.

After all money is about choice.

Do we spend some now, do we set it aside for a rainy day, or do we give some away today? We deal with choice in any decision we make that involves our money – most of our decisions.

To know which decision is best requires knowing what money is due to come in, what money is already spoken for and what money is left over, if any. That, simply put, is what a budget helps us understand.

The sad fact is that most people do not know how to build, stick to or just plain manage a budget. Just look around – do your friends do a good job with their budgets? How about your partner/spouse? Do you feel confident in your budgeting skills?

Most importantly, what are you doing to teach your kids how to budget wisely? Do tell!

What is Enough?

I hear in so many conversations that their is not enough. Not enough jobs, enough money, enough resources, enough blue jeans, enough fun, enough opportunity, enough time, enough personal responsibility, enough love, enough freedom and the list goes on and on and on.

In other conversations I hear that "we" are not enough. How many of you have said at least one of the following about yourself at some point?

I am not:

• good enough
• smart enough
• compassionate enough
• skinny enough
• happy enough

So if this language is in our day to day conversations, what are our kids thinking and taking in about the enough question? And better yet, how to we teach them the answer to the question - especially as it relates to money?

Seems to me that if anyone is to be good at making money decisions, they need to know what is enough for each purchase or giving or saving decision we face.

For myself, I start with these questions and try to figure out in the moment if I have enough:

Do I have enough right now?
Do I have too much right now?
Do I need more right now?
Do I just want more right now?
Do I have enough to give away to others right now?

What do you do to evaluate if you have enough?

How do you share this decision making with your kids?

Great Summary of Issues in Financial Literacy Education

One of the best articles written about the challenges we face in training people to be competent in money matters.

I have believed for a long time that financial literacy education's failure to date is not about the content, as there has been enough written, produced and printed about the in's and out's of the world of money. But instead, it is an issue of delivering the training information to the right person at the right time in a form that will be most effective for them. Not such an easy task.

The article, by Tom Hanza, the President of the Investor Fund, needs to be read by all people interested in and working on the education of kids, young adults and seniors in money matters.

I am back

After a long absence, I am back.

Been busy putting together a new website to bring tools and information to parents who want to take a lead role in teaching their kids foundational money skills.

More to follow. Check out the site at www.moneywizdom.com.

Tell your friends. Sign up for the free weekly newsletter.

Denise

Can you beat 97% discount while grocery shopping?

While we might not want to clip coupons, file them in some folder, create a shopping list and remember to take the list and the coupons to the store. Susan, known as the "coupon queen," takes her weekly grocery bill from $152.86 to $9.43 with all of her advanced planning and coupons. Watch her video and be amazed.

IT is not that hard to PLAN ahead, CUT coupons, CREATE a shopping list and only BUY what is on the list, oh, and BRING the coupons.

Raising I.Q.

So what does the ability to delay gratification have to do with IQ?

Richard Nisbett, a professor of psychology at the University of Michigan, in a superb new book, “Intelligence and How to Get It,” provides suggestions for raising kids IQ's:

• praise effort more than achievement
• teach delayed gratification
• limit reprimands
• use praise to stimulate curiosity

So one of the founding concepts in successfully managing money (learning how to delay gratification) has been implicated in higher IQ! And we all know — a higher I.Q. has been shown to correlate to greater success in life.

Now how is that for some new motivation Mom, Dad, Grandparents, Aunts, Uncles and any other money mentors our there — get out and start modeling, teaching or reinforcing the idea of delayed gratification.

Need for financial literacy rising in importance

Well after a few weeks away, I am happy to see the news out of Schwab today http://tinyurl.com/cossw2 that a recent survey of 22-28 yr old's indicates they now place being personally responsible for understanding how to handle money above all else!

Yahoo!

Should we live within our means, under our means or a balanced financial life?

This is an appropriate question for our current financial times. Should we strive to teach people to always live within their means, live under their means or some form of a balanced life which may lead one to be over or under at times?

Here is an interesting article that looks at the options.

What do you think?

In search of a NEW Financial Literacy Advocacy Pulpit

The time is now to bring financial literacy to the national stage, but IN A NEW WAY. I believe it will only be solved if we tackle it in BOTH at school and at home.

So far, most public, high profile organizations have been focusing on getting national financial literacy curriculum standards into our public k-12 system or giving tools to after school programs. These have been met with limited success- not enough funding, no one agrees on what should be taught, AND there is no carry over to the home environment.

There is no one advocating at the national level, to ALSO build and supply families with tools.

Why do we need to support parents in this task?

First: Kids are learning about money at home, all the time. They watch and model what their parents do because this is where money is used and discussed on a daily basis.

Second: Real life decisions about how to save, earn, invest, borrow, spend or share money happen at home- not in school. Schools can teach how to add, subtract, calculate returns, etc-- but when it comes to making real decisions with money, it happens at home. " I have 15$, should I buy the new CD now or should I wait and save it so I can buy a new IPOD?" No school can replace this type of experiential learning.

Third: Parents want their kids to learn their money values (like we give 10% to charity each pay period). Schools are designed to teach in a values neutral way.

Fourth: Habits are set early in life and are very difficult to change. Setting good money habits in place early is key. It is much easier to teach a 5 yr old that each time they get money, some must be saved, some given away and some can be spent---setting up the habit of a balanced approach to cash management.

I seek a new advocate at the national level, to build a partnership of companies, government and experts to create an integrated set of products, tools and support for BOTH parents and schools to teach financial skills to our youth. The time is NOW!

Who is ready to lead? Who will support this effort with real MONEY?

Why Teach Your Kids About Money

If we are to start to share how to teach young kids about money, it makes sense to begin at the Why?

Here are a few reasons....

• To ensure that children build the necessary skills to make informed financial decisions in their lives.

• Training should start when children are young — by early elementary school age when money habits are already being formed

• Kids who learn to manage their own money early are on their way to becoming financially secure adults.

• Giving children the responsibility to earn, spend, save and share money helps build confidence and self-esteem.

• Kids who give to others will benefit from learning that life is bigger than one.

Do you have other reasons we should keep track of? Let us know.

A New Year's Resolution

Welcome to 2009.

If we ruled the world, it would be the year of educating kids in personal finance. But since we don't - how about if this blog serves as a place to get information, advice, and share tips, tricks and tools on how to teach young kids money skills?

Look for use to layout a simple plan to share what we know and we look forward to your comments, ideas and suggestions.

Welcome to the Year of the Money Smart, Wise, Savvy - Kid.