Besides, making financial mistakes while they are young is by far less serious than when they are older and provides quite an education.

This is one of the reasons I started Kidbudget. Its a system that teaches children basic sound financial principles. It is very different in the way kids learn – they will like it – and is based on things they do in the real world.

The greatest asset is that it provokes conversations with the child and the parent.

The price is having to patiently listen to his lengthy and emotional decisionmaking when he *does* have the money, but even that has been getting better as he gets older.

My 6 year old gets the difference between price per ounce and price per package at the grocery store, and we do the math to compare sale prices on name brands vs. generics.

I also believe that leading buy example is going to be a great lesson. We cant always get what we want.

BTW, I am also a Girl Scout leader for my dd’s troop. A couple of weeks ago we took a tour of a nearby Wildlife Rehabilitation Center and each girl was to bring a small donation to the Center. Not only did our family donate some small items they needed, but my dd also made a card for them and put $13 from her “Give” jar in the card. She was so proud to know that she was helping them take care of the animals!

Cheers,
Bill

I think your piece is “pure gold.” It alerts us to what is happening in the world of raising children. I appreciated the web sites you included and explored some of them. Hello everyone. Do you want your children to succeed in life? Get them started on the path to financial literacy!

One thing I’m seeing in many of the readers’ replies is that parents need to teach financial literacy to their kids. I say, yes, but…it still needs to be taught in schools. To assume parents CAN teach financial literacy is like assuming parents can teach higher math: some can, a lot can’t.

I’ve been requesting that my son’s high school think about offering even a one-shot class/talk/seminar on personal finance. So far, there’s no interest in doing so – “the parents can teach that.” Despite the fact that 50% of the students qualify for low-income breakfasts & lunches.

I’m not sure how you can break a cycle of getting into debt/modern indentured servitude if you ask the people who don’t know how to do so to teach it.

Thanks for your post. Many of the ideas you present are spot on. I am a huge fan of increased financial education for women. There isn’t enough of it. We need more.

In particular I like the focus on early childhood education. It seems that most habits that sustain the test of time are instilled during one’s young years (e.g., progressive public education reform particularly focuses on this time).

I also like how there are 13 separate badges within personal finance. Personal finance is a discipline and requires several different areas of expertise. This is the right way to break it up.

I disagree however that this is the full solution. More is needed. Education alone has failed for decades in changing American’s habits with money (e.g., 401k participation rates).

Additional areas to focus on include:
- systems and automation of personal finance
- psychology & its roll in effective financial discipline
- corporate advertising and its role in personal finance

It’s an important point that financial education has in many respects failed for years. Yes, it hasn’t necessarily been instituted in our schools, but messages like “invest in your retirement” have been shouted from the mountain tops by the Government and large banks for years. The result has been less than stellar.

Girl Scouts is a wonderful organization, and has been doing a fantastic job lately of trying to stay current while not losing its history and ideals. Happy 100 year anniversary, Girl Scouts!

In terms of high school lessons, my husband teaches high school and it is sad how little high schoolers understand–VERY few parents sit their children down when they do the bills so the children have very unrealistic expectations when they graduate college. Since my husband teaches computers, in teaching them spreadsheets, he makes them plan a budget for when they graduate college, having them research the salary from their chosen career, the payments for a car/house, and all other expenses, working with their parents to make sure all expenses are factored in. Then, after they have it together, he corrects the salary to reflect a starting salary (very few students start with a starting salary and look to an average in their field) so the students have to re-do their work. Then, he provides them with a tax table, and suddenly, the kids realize that the lifestyle they are currently experience (by living with parents that have an established career for 15 year or more) is very different from your lifestyle when you first start out. Kids actually need this education before high school becauseonce you hit high school, everything counts toward college. Kids that learn this lesson in their second or third year of high school have lost out on lots of valueable options, including options of getting college credit for high school classes. One needs to know where they are going before the journey begins or it costs more and takes longer to get there.

I wish I’d had control over the amount of money my family spent on my clothing when I was a teenager, rather than just getting clothes when my mom felt like shopping for them.

Nothing teaches a person how to make good decisions like making lots of them and living with the consequences!

As a result, I had some weird ideas about money growing up. My dad is an engineer, and I thought that engineering was a poorly paid profession because we lived in a cheaper neighborhood than all of my classmates at our expensive private school. My mom drove an older Ford instead of my classmates’ moms’ late-model Mercedeses, BMWs, etc. We didn’t belong to a country club or go on ski vacations. So I (and my friends) thought my family was poor!

If my parents had been more open about money and their choices, I would have seen just how much they were spending to send us to that school, how much they were putting aside for retirement (I have zero worries that I will have to take care of them in their old age), and how they didn’t waste money on interest payments for expensive toys and trips, but instead paid cash for good-value cars, dance and music lessons for us, etc.

Today I believe the expensive school wasn’t worth it – it gave me a very skewed idea of how much money was “enough” and how “normal” people live. But in general, I have a huge amount of respect for my parents’ choices, and wish I’d known enough to *understand* them sooner.

Men and women can be leaders/volunteers, and Girl Scouts doesn’t discriminate. My older daughter had a lesbian leader who had adopted special needs kids with her partner, and their girls were part of the troop. Girl Scouting is for all girls! 2012 is the 100th anniversary year–see how you can help girls get involved.

My older daughter is already learning about trade-offs, and she recently decided to skip the next 2 chorus trips (she earns money for trips through fundraisers and babysitting) so she can go on a school-sponsored trip to Germany in 2013 instead.

I hope that the lessons in their teenage years will keep them from overspending and out of debt for the rest of their lives.