Financial Education for Kids
When my editor gave me my topic of kids and money, I let out a hushed gasp. Kids? Money? Surely you can’t expect me to cover that in less than 500 words? I mean, doctoral dissertations have been written on this subject. Countless articles.
As soon as children can count, they can start learning about money. When our children were little, they received one of their first coin banks with three partitions – spend, save and share. They learned quickly about making good spending decisions as well as the need to save money for larger purchases. They understood the importance of sharing and giving back to church and community.
Allowance pros and cons.
The decision to pay – or not pay – an allowance to children causes many parents angst. Some parents provide a weekly allowance in payment for chores, likening it to wages they will receive in return for work as adults. Others view it as a “gift” that children can use to learn about money through their own trial and error.
A recent study by the Jump$tart Coalition for Personal Financial Literacy found allowances as a learning tool often didn’t have the intended results. The survey of high school students showed those who received a regular allowance demonstrated the weakest personal money management skills.
Children who received an allowance and whose parents took the time to discuss items like budgeting and credit scored well in the survey and went on to be financially responsible adults. The difference in “success” and “failure” was determined by the time parents spent discussing financial education with their children, not whether the child received an allowance.
To thine own self be true.
In Shakespeare’s Hamlet, a sage father advises his son: “This above all – to thine own self be true.” As much as we, as parents, attempt to educate our children about money and finances, actions speak louder than words.
As my children grew up, I saw my IQ dropping precipitously (at least in their eyes). By the time they were teens, I felt as though I had lost all cognitive ability and was merely an ATM. While my words and financial lessons along the way may have fallen on deaf ears, I’m hoping our actions as a family have made an impact.
Successfully teaching children to be financially responsible starts with parents who are financially responsible. We need to be certain our own houses are in order. That means setting a firm foundation, like managing debt, saving for tomorrow and being financially responsible when it comes to managing risk and insurance.
About the Author
Joe Buhrmann is a Certified Financial Planner™ certificant and the Manager of Financial Security Support for COUNTRY Financial. Visit COUNTRY online at countryfinancial.com.