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.

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Denise