If Kids Were Taught To Handle Money, Would We All Be This Broke?
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Should young kids learn to handle money?
Camp Millionaire, a non-profit based in Santa Barbara, CA, recently featured in a New York Times photo essay, uses the idea of six money jars: living, savings, freedom, education, play and donating — a simple way to make visible where your money is now going and how you might thoughtfully re-direct it. I really like this idea of making financial choices literal and deliberate, without which they can all so easily end up in a confusing, miserable pile of bills, debt and panic. We recently held a financial summit at our house and our behavior, and spending patterns — many of them habitual — changed the very next day. Not fun, but necessary and overdue.
Here’s a Department of Commerce chart showing how little Americans have been saving for the past decade; in 2001, 2004 and 2005, just over three percent of their incomes. Only now, in 2009, are Americans saving 5 percent.
Here are six tips from one of my favorite money mavens, Suze Orman. As someone who’s been told she’s as cheap as hell (depends what I’m purchasing,) I think kids should learn to handle money as soon as they can differentiate between a nickel and a dime. Financial literacy is the only way to thrive, let alone survive, no matter what your income. Do you know your FICO score? Do you know how to raise it?
How confident are you managing your finances? Who do you turn to, or trust, to help you?
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I agree that kids should learn how to handle money at an early age, but easier said than done. We tried many approaches, including paying for each movie, snack and book they wanted to giving them one lump sum a week from which they had to pay their expenses. For a time, we made allowances conditional upon chores, and then tried giving them allowances they didn’t have to work for. Nothing seemed to work in teaching them how to budget, save or spend wisely. I’d love to hear other parents’ success stories on teaching kids to be financially savvy.
I was given an allowance when I was little, but it was a twice-yearly clothing allowance given to me at 15 that made a really lasting impression. I can still remember some of the garments I bought with all these years later; it was abundantly clear to me, even with something so simple, that choice meant consequences and once the money was gone, it was gone. It gave me the autonomy to choose my own things and the ability to learn to juggle lower priced things with more expensive ones.
Totally agree. I really think handling money should be part of basic education, from grammar school. It is amazing to me how many people don’t understand the consequences of paying the minimum on a credit card. And, frankly, I could have done a better job educating my own kids about finances.
I was lucky having a mom who forced me early (albeit reluctantly) to handle my own money and watch it like a hawk. I grew up in a family of freelancers which meant none of us ever had the security of a paycheck or pension, so watching income/expenses/taxes was always necessary.
I am amazed by people who don’t know the interest rate on every piece of debt, the exact amounts they owe, the date and time those payments are due. Every error and oversight costs you more money.