Money Matters – Kids & Cash: Lessons

BOSTON (CBS) –  Kids don’t know enough about money. Grownups don’t know enough about money! Look at the financial mess we are slowly digging ourselves out of. People took out mortgages they could not afford. They invested in risky stuff. They were fooled by conmen!

And every day our kids are exposed to instant gratification and a society that values million dollar baseball players and very expensive shoes.

They need to learn about money. They need to know where money comes from, how it gets earned, spent and saved. For the most part there is not enough money education in the schools. I once thought that the ideal time to start teaching money skills would be when the kiddo was in first grade.

Having a grandchild has made me re-think that theory. My granddaughter at 3½ understood that I give the cashier at Wal-Mart either my credit card or money and I can walk out of the store with a cart full of goodies. Some of which were going to be hers. She doesn’t understand credit, but she does know about the magic card I carry.

When you have children the money lessons need to start before they get on that kindergarten bus!

And currently there is nothing mandated by law here in Massachusetts. There are some states that require kids get financial education and 17 states require personal finance instruction incorporated into other subjects.  And all of this is on the high school level. We need to start much younger.

Here in Massachusetts we do have a voluntary program for elementary school kids in grades 3 thru 6 titled, “Savings Makes Cents.”

The State Treasurer’s Office provides a curriculum for a banking program for elementary school children, which focuses on the ABC’s of money management. It is voluntary on the part of the school so if your school isn’t using the program talk to the principal, the superintendent and school committee.

The program gets schools and banks to work together to teach children basic monetary concepts, including how to open a savings account, the origin of money and basic budgeting skills. Saving Makes “Cents,” partnering with over 170 financial institutions, is now in over 400 schools across the Commonwealth.

So should there be a mandatory curriculum for financial education in our school systems here in Massachusetts? I think so! We are not giving our kids the practical life skills they need to function in the world. We teach them to read, to write and how to add numbers but we neglect an important life skill, money management. We should be teaching money skills to kids as early as Kindergarten!

One more thing: The new “Teaching Your Kids About Saving and Investing: A Guide for Parents” section of The Alliance for Investor Education Web site features the following 10 top resources for consumers:

1.      Investing ABCs: Teaching Your Children About Stocks – AICPA’s 360 Degrees of Financial Literacy.

2.      Gen I Revolution – Council for Economic Education.

3.      A Hitchhiker’s Guide to Planning for College Expenses – CFA Institute.

4.      Choose to Save: Savingsman Episode 5: Saving Early – Employee Benefit Research Institute.

5.      Tips for Teaching Students about Saving and Investing – Securities and Exchange Commission.

6.      Teach Your Children – Certified Financial Planner Board of Standards.

7.      The Basics of Saving and Investing – Investor Protection Trust.

8.      Cover the Basics Before Your Child Leaves the Nest – National Endowment for Financial Education.

9.      Great Minds Think: A Kid’s Guide to Money – Board of Governors of the Federal Reserve.

10.  Fraud Scene Investigator – North American Securities Administrators Association.

More from Dee Lee
  • emom

    I SO AGREE WITH THIS ,,, I have been working very hard with my child on this very problem. Recently my child wanted a video game. However it was $35.99 , I said wait 6 months and the price will come down and then you can possibly buy it.. Well I have been saying this since Novemeber….every weekend my kid checks the stores to see and How fantasic it was this weekeend to see the price was $15 dolars less, $19.99 , I said now you can buy it and you have $15 to save and put with something else.. For years that majic card was the source of money, my kid also thought it was great, take the plastic debit card go to the bank insert it into the atm and CHA CHING cash comes out. . also would see me go to the bank teller hand them a small peice of paper and get money from it….. well thats hen I said my kid needs to learn how money gets into my hands. Starts with work, which goes directly into the bank electronic style, I never have to handle it, next I would go to the bank and withdraw some,,, So showing my kid this has started to sink in, but I think the huge savings when the game was bought may be the best part. Plus now my kid is heping to deliver newspapers and now earning a small amount of money,,, Watching it grow and then nowing if there is enought to make a purchase…. I so agree kids today SHOULD learn how to manage their money ande know it DOES NOT GROW ON TREE’S AND THE MAJIC CARD HAS TO BE FILLED ….. You just can not go around and spend what you dont have…… I love it if this would be in the schools……..

  • Althea

    I started my son with an allowance when he was 5 – he earned I think it was about $5 a week for keeping his room clean and helping wash and put away dishes at night with me. He’s 9 now and the amount of money hasn’t changed over time, but he has saved quite a bit and I’m finally teaching about money management. I knew he needed a little cell phone because he started with a baseball travelling team and practice always seems to run super late. I wasn’t about to pay for a contract or an IPhone or anything he kept asking for so, I gave him an option just to see how the idea of spending his own money struck him. I choose Tracfone prepaid for him (cheapest I could find) and told him that if he paid for the cell phone, then I would pay for his first aircard with the implication that he would pay for the next – the most I knew he would spend was $30. I was happy that he both picked out a phone for less than $20 and offered to pay for his own aircard – he told me that if he paid for it, then he wanted to choose it. I’m glad that he’s realized that when its your own money, you need to weight the good with the bad.

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