Helping your kids learn about money
There are lots of resources to aid financial literacy
Tuesday, May 14, 2013
What do sex and financial literacy have in common? Parents rarely talk about either of them with their children. But while sex education is now the norm in schools, many kids remain in the dark about money matters.
"It would be great if school started offering some kind of financial class for students," said Jeff Hindenach, director of content for NextAdvisor.com. "Something that we advocate is parents talking to their kids about credit at an early age. In my research I found an interesting statistic showing 60 percent of parents would rather talk to their children about sex that talk about money."
A child who grows up understanding money and the responsible use of it will not only be a more savvy consumer, they are less likely to get over-extended on debt, like credit cards and college loans. And while most schools have yet to jump on the financial literacy bandwagon, plenty of other organizations have, offering games, curriculum guides and suggestions for parents and teachers who want to help give kids a solid financial foundation.
Practical understanding of money
TheMint.org is an organization with the goal of helping parents impart a real and practical understanding of money to their children. It's advice? Start with the basics and make it fun. Focus on saving, investing, debt and risk.
For example, if you are in the habit of giving your child money every time they ask for it, cut it out. Instead, give them a regular allowance for them to manage. When it's gone, don't give them any more money until next allowance day. It's a simple, practical way for children to learn how to manage money and the consequences of over-spending.
The real mint -- the U.S. Mint -- also has a program for financial literacy. Aimed at teachers, it offers lesson plans centered around money, such as "Do you like to spend or save?" "Common Cents" is a first and second grade lesson plan that uses money to teach math. Using coins, children learn to add and subtract.
Turnkey financial education solutions
The National Financial Educators Council is a financial literacy resource provider that delivers turnkey financial education solutions. It provides education packages for students, from pre-kindergarten through college.
Jump$tart is a coalition of financial literacy education advocates and providers. It offers a number of resources, including Jump$tart Clearinghouse an online library of financial literacy material, including lessons and games that can be downloaded for free.
Among the resources is AdMongo, an online video game produced by the Federal Trade Commission (FTC). It teaches students about advertisements, what marketers are saying in their ads and what they ultimately want from the consumer. In short, it's a resource to help young consumers understand and resist Madison Avenue's slickest pitches.
Toymaker Hasbro has produced a kids' version of the popular board game Monopoly, called Monopoly Jr. It's a faster version of the adult game but still has the math and money-management requirements of the adult version.
A recent study suggests American parents have a long way to go in helping their children get a grasp on money issues. The survey, conducted for the American Institute of CPAs (AICPA) by Harris Interactive, found that 61 percent of parents give their children a generous allowance but only one percent say their kids save any of their money.
“As parents, we feel a strong commitment to our children and ensuring they have all that they need to succeed,” said Jordan Amin, CPA, chair of the AICPA’s National CPA Financial Literacy Commission. “One of the best gifts we can give them is a solid education on managing money.”
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