Money Lessons

Do you want to know what I gave my daughter for her 17th birthday? Even if you do not, I’m going to tell you. I gave her a few shares of stock, so she could follow it and learn about the stock market. Just as it is important that we keep track of finances, it is equally if not more important that we teach our kids about money, finance, and fiscal responsibility. “Children often see adults exchange coins and bills when they buy things. As children grow and start to make choices, they learn that people, things, and money have value. These concepts form the foundation for understanding the importance of spending, sharing, and saving.” — Penn State Extension It is not just about bills and coins, there are stocks, bonds, credit cards, loans, etc. “’ Without a working knowledge of money, it is extraordinarily difficult to do well in life,” says Sam X Renick, co-creator of Sammy Rabbit, a children’s character and financial literacy initiative. “Money is central to transacting life, day in and day-out. Where we live, what we eat, the clothes we wear, the car we drive, health care, education, child-rearing, gift giving, vacations, entertainment, heat, air-conditioning, insurance—you name it, money is involved.’” — Cameron Huddleston, Forbes.

Now we have established that it is up to us parents to teach our kids about money; hence, my daughter’s 17th birthday gift. How do we do this? We must make sure that our kids understand the value of money, the reason for saving, what investing in stocks and bonds is, and the purpose of taking out a loan (Charles Schwab). For teenagers, you can add an allowance and get a job. By the time I hit 9th grade, I had an afterschool dog walking job, babysat, and got an allowance that paid for school supplies, toiletries, and hanging with my friends. My parents were not going to be the bank.

In fact, at the same time, my father insisted that I put together a budget for back-to-school clothes shopping and then record what I actually spent. I have done the same with my daughter. This is a great way to teach your child about needs (i.e. t-shirts, pants, etc.) and wants (sequined jean jacket, leather mini skirt, etc.) “Between lunch money, school supplies, and other small necessities, allowance can go very quickly for young teens. Help your child set a budget by first discussing wants vs. needs. "I call it the potatoes and gravy game," says Pearl. "Potatoes are the food we need to survive. The gravy makes it taste better but isn't necessary." You can reinforce this idea by going over the family budget with your child and discussing your family's needs vs. wants.” — Ann Attkisson, Parents Like my parents, I choose to make a clothing budget separate from my daughter’s allowance.

Some resources to help you teach your kids:

Peter Saves for a Rainy Day by Rosanna Guardavaccarro

Understanding Wall Street by Jeffery B. Little, et al.

How Money Works by Ton Matthews and Steve Seibold

Federal Reserve Comic Books

Maxed Out Documentary (for tweens and older)

The Most Important Class You Never Had (for teens and older)

Some other ways to teach your kids about money:

· Lemonade/Cookie Stand

· Coin collecting

· Play the “stock market” game and pretend to buy stock and follow it

· Play the board game Life or Monopoly