It’s time to talk finances with your kids
While experts say the economic climate is turning around, nearly all of us have tightened our belts, which can be challenging, especially when kids want to keep up with their friends’ Zhu Zhu Pets, iPods or the latest Wii games.
Kids are bombarded by advertising, and parents are bombarded with “Mommy, can you buy me…?” or “Dad, I really need…” It can be a bit much and giving in can sometimes be easier than teaching kids about financial literacy.
Surprisingly, kids do want to learn about financial literacy. A 2009 back-to-school survey by Capitol One found that 50 percent of the teens surveyed expressed an interested in learning more about money and that they prefer to learn about money from their parents rather than friends.
Another 2009 survey from Capitol One of high school seniors found that 65.4 percent of the male students rated themselves as “highly knowledgeable” about personal finance, compared with the 49.2 percent of the young women who participated in the study.
That being said, it’s more important than ever to teach kids about financial literacy. They’re never too young to start learning. Some experts even suggest that as soon as your child can tell the difference between a dime and a quarter, it’s time to start teaching financial literacy.
Making Sense of Dollars
But what is the best way to teach financial literacy? Charles Schwab’s 2008 “Parents & Money” survey found that 69 percent of parents feel less prepared to give their teens advice and guidance about investing than they do about sexual intimacy.
According to a 2010 Merrill Lynch study, the lessons parents most frequently pass along to their children are the importance of managing a budget; investing for retirement; managing a checking or savings account; and managing and paying down debt properly.
The study also found that the financial lessons parents teach their kids are among the most important pieces of a healthy childhood.
To be sure, talking about money is not always easy and teaching financial literacy can be challenging. Google “financial literacy for kids” and more than 430,000 results pop up. There are hundreds of programs – organizations, software, curriculum – out there, trying to make it easier to give those financial lessons.
From Cookies to Confidence
One of the program emphases of Girl Scouts is financial literacy. Through financial literacy, girls set financial goals and gain the confidence they need to ultimately take control of their financial futures. By developing money management skills early in life, girls learn how to increase their income, become responsible consumers, create a budget, build and manage credit, and save and invest for whatever’s next.
Though everyone knows the Girl Scout Cookie program for its delicious, mouthwatering cookies, the program is more than that. It’s the largest financial literacy program for girls nationwide. In fact, it’s the largest girl-led business in the U.S. and generates more than $750 million for girls and communities across the country.
By participating in the Girl Scout Cookie Program, girls develop five essential life skills: goal setting, decision making, money management, people skills and business ethics. These are skills that will live on long after girls graduate from high school. In fact, more than 53 percent of all women business owners are Girl Scout alumnae.
Whichever way you find best to talk to your kids about financial literacy is the right way – start today!
Four things you can do today to promote financial literacy to the children in your life are:
- Check with your bank to see if it offers a program on how to talk with kids about money.
- Visit www.themint.org for information and interactive games for kids and teens to learn about handling money.
- Set up the three jar approach – one for spending, one for saving and one for sharing. Not only will kids learn to save, but they’ll learn philanthropy and how to help others.
- Talk honestly with your kids and set financial benchmarks together.
The Girl Scouts of West Central Florida serves nearly 24,000 girls in Citrus, Hernando, Hillsborough, Marion, Pasco, Pinellas, Polk and Sumter counties. For more information on how to join, volunteer, reconnect or donate visit www.gswcf.org or call 813-281-4475.