across the country say in survey after survey that one
of their top parenting worries is teaching their kids
about how to handle money.
Lindop, a mother of three in Fort Mill, S.C., said that
talking about family finances has been "a worse
taboo than sex," and studies actually support that.
For Joe Sebik, a teacher and father of two who lives in
New Hill, N.C., the concern is how to arm his kids with
ways to navigate a "consumerist" culture.
are awaiting the arrival Tuesday of a new book,
"Smart Money Smart Kids," by author and
money-oriented radio show host Dave Ramsey and his
daughter, Rachel Cruze. The book is focused on helping
parents raise "the next generation to win with
an interview, Ramsey and Cruze said parents should not
feel overwhelmed or ill-prepared to instill crucial
money habits in their children. Much of what’s needed
is common sense and, if followed, will lead to lasting
results into adulthood, they say. Their concepts include
making sure children work for money, avoid debt, save
and spend their cash wisely, and that they share or give
to their church or charities.
advocate avoiding student loans for college and, in the
book, offer ideas for a debt-free degree.
also write about how to foster "contentment"
instead of entitlement in children.
who think they haven’t done well with money can still
make a difference in their children, said Ramsey, who
drew an audience of more than 2,500 to hear him speak on
handling money last week in North Carolina.
are no perfect parents," he said. "How do you
teach your kid about marriage when your marriage isn’t
perfect? How do you teach your kid about grades when
your grades weren’t perfect? You not being perfect
does not disqualify you from being a great mom or
and Cruze join other authors, school administrators,
nonprofit organizations, a range of businesses and even
billionaire Warren Buffett in increasingly concerted
efforts to provide children as young as kindergarten
with more and better personal finance and money handling
information and skills.
states now require personal finance to be taught in high
school. Six states — Colorado, Delaware, Georgia,
Michigan, Missouri and Texas — now mandate testing on
the subject, according to a survey by the Council for
we know is that we must start younger — you really
need to start in elementary school in teaching financial
concepts," said William Cheeks, eastern regional
director for the Jump Start Coalition, which focuses on
financial literacy and has published a guide on raising
"money smart" kids.
chairman and CEO of Berkshire Hathaway and one of the
world’s richest men, is on board. He has been working
with Amy Heyward, president of kid-focused Genius Brands
International, on a series of animated episodes with
money messages that have been made into a
curriculum-based program for use in schools. It’s
targeted at 6- to 11-year-olds.
program, "Secret Millionaires Club," features
kids navigating problems and adventures with money and
business. They are shown on the Hub Network (formerly
Discovery Kids) and are available as shorter webisodes
online, where parent guides with tips are free. Buffett
voices himself and appears in each of the 26 completed
sprinkles his philosophy throughout the shows. Examples:
Debt can be a racket; save your money; never cut
corners; show discipline. More episodes are in the
works, Heyward said.
said she was having breakfast with Buffett a few years
ago and he recounted that one of his granddaughters had
turned 18, received a flurry of credit card
applications, signed up for one and then "rang up a
thought it was "crazy" that his own family
"was falling for it," she said.
led to this discussion about financial literacy and just
understanding how it all works," Heyward said.
"It’s really not a part of many kids’
upbringing. … Really, you develop your habits early in
life and his feeling, which we shared, was to teach kids
and help them understand kind of how the world works,
how the business of life works and develop healthy
habits from an early age."
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program sprang from that.
from interviews with Ramsey and Cruze, Heyward and other
experts who are focused on helping kids with money, as
well as reports and research, here are four key tips for
helping children with money.
Work equals money. It is vitally important that children
realize work is the way to obtain money. Parents should
connect chores to "allowance" or
"commission" payments, many say. In the
bestseller "Money Doesn’t Grow on Trees,"
author and former banker Neale S. Godfrey writes that
tying chores or other household work to money can result
in "heated debate" but that children must
learn the connection.
only will the child someday work for money, but earning
an allowance will underscore the fact that you, the
parent, work hard for your money, too," she writes.
is a necessary skill for life, Ramsey writes, and should
be taught just the same as brushing teeth.
experts say an "allowance" tied to work can
begin for children as young as 3.
Save, spend, give. A range of experts recommend helping
your children think of their own money in three ways:
for saving, spending and giving.
those, the important role of a parent is to coach and
assist children in saving with a purpose and spending
the money wisely. Many suggest children save 10 to 20
percent of a week’s allowance for the long-term
future, and that they donate about the same. The rest
can be spent, and letting kids make mistakes with
purchases, within reason, is fine.
of the "spending" money should be earmarked
for a bigger purchase that takes time.
is perhaps the hardest part," write Steve and
Annette Economides in "The MoneySmart Family
System." They recommend "spending smart"
through a process of planning, research, waiting and
and others stress giving, too. It inoculates children
against greed and teaches them to not be selfish.
said children who don’t learn to save early on in life
can end up in debt and have difficulty with money later
Budgeting. Parents who use a regular monthly budget that
"tells your money what to do," are setting a
great example for children, according to Ramsey and
"Smart Money Smart Kids," Ramsey writes about
how a wide range of money topics are covered in a
nine-week course his company helps teach at churches and
civic groups across the country. Of all the topics,
Ramsey says, "the most important one is the budget
isn’t fun setting up a budget, he says, but "we’ve
found that the budget is the single most-important
factor among people who win with money."
said that splitting up the money for saving, giving and
spending is a good "budgeting" exercise for
kids. As they reach teen years, they can begin to take
more responsibility for more of the money that would be
spent for their purposes. A written spending plan is
crucial for managing the money.
recommends teens get a checking account at about 14
years old. It can be a scary step for parents — but it’s
an important one because children can then learn about
banking and managing more money while still at home
under parental supervision.
Wants, needs and contentment. Sandy Wheat is the
executive director of the N.C. Council on Economic
Education and has led the state’s Jump Start
main thing that we can teach our very, very young
children is the concept of delayed gratification,"
she said. "If they’re not learning that at the
very, very young ages, even preschool ages, they will
have a more difficult time later in life being more
disciplined about their money and saving for
Jump Start Coalition encourages parents to help children
understand the difference between wants and needs.
Appreciating the difference between a luxury and
necessity "is essential for developing good money
management skills," the coalition says.
writes: "If you want to raise money-smart kids, you
have to raise kids who are content."
said parents should lead children toward feelings of
gratitude and resist as much as possible cultural
messages that suggest people are "defined" by
and advertising foster discontent, he said, as children
believe they need things that they really don’t.
Erosive is the "endless comparison game," fed
by TV shows, Facebook use and focusing on "what
everyone else has."
fight discontent, Ramsey and Cruze say, parents can take
actions to squash it and find ways to show their
children how blessed they really are.
want to take them down the road of humility to gratitude
to contentment," Ramsey said, "instead of
self-centeredness, which leads to arrogance, which leads
to entitlement. It is a money principle because it
revolves around the issue of money in the sense that it’s
where our discontentment shows up — in the acquisition
of stuff to make us happy."
FINANCE IN THE SCHOOLS:
Council for Economic Education this year tracked a
growing trend among states in requiring personal finance
education in the schools. These 17 states now require
high school students to take a personal finance course,
up from one state in 2002: