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.

The Paradox of Thrift

A great conundrum we all face is that in these crazy economic times, when we feel frightened and not very interested in spending money, yet if we do not, our economy will continue to falter because no one is buying goods and services and therefore companies keep laying folks off.

I found this article in the SF chronicle which does a nice job of explaining the Paradox of Thrift.

Take a read. Do you agree?

Inspiring and Important Facts

Seems that financial literacy has the usual paradoxical elements...the good and not so good. I found these inspiring and important facts when you look at the topic through the lens of women.

• The 10.6 million privately-held, women-owned (by at least 50%) businesses post over $2.46 trillion in sales annually and employ over 19.1 million people. (Center for Women's Business Research 2004)

• 90% of all women will be solely responsible for their finances at some point of their lives. (National Center for Women and Retirement)

• Women represent nearly half of all investors with $100,000 or more in investable assets. More than half of them are financially independent rather than relying on their spouse, family or inheritance (Women's Financial Network at Siebert, 2002)

• 80% of all widows living in poverty were not poor before their husbands died. (HHS Administration on Aging, 2000)

• Women retirees receive 50% of men's average pension benefits. (Women's Institute for a Secure Retirement, 2001)

• Women make up 43% of Americans with assets over $500,000. (Private Banker International, 2003)

• 75% of elderly persons living in poverty are female. (HHS Administration on Aging, 2000)

Teens Clueless but Confident!

According to a study by Schwab and written up on Yahoo! by Carrie Schwab Pomerantz, 73% of teens think they will earn lots of money when they're out on their own---maybe as much as $145,500. And 63% say they are knowledgeable about money management-- they know how to budget, save and invest.

But then the numbers start to look a bit more murky----13% say they know what a 401(k) is, 14% say they know how income taxes work, and 23% say they know what a credit score is. But when Jump$tart gave students a basic financial literacy test the average high school senior got a test score of 52.4%-- an F!

As we all know teens are often both a bit clueless and way over confident in their abilities and if you consider that less than 20% of teens have taken a course on personal finance and, in this era of predatory lending and self funded retirement plans (401(k)s, IRA, etc.) teaching kids solid money skill before they leave home is far more important than it's ever been before.