Wednesday, January 12, 2011

More For Your Money: How to teach little ones about money basics

More For Your Money: How to teach little ones about money basics

Teaching kids about finances can be challenging. It seems little ones have an unlimited supply of questions, especially when it comes to money. There are some easy ways you can help your kids learn the basics.

Jessica Darrington, a single mother of two, says it seems like her children are always asking for something at the store – and that telling them no just doesn't work.

Community Credit Counseling's Dona Graves educates hundreds of people, including children, every year on personal finance. Graves says the first step is to explain to your kids why you cannot afford something – and give them concrete numbers. "As parents now, we have to be more open about the family budget and the family expenses and explain to our kids what we're doing -- 'look, mommy has to take this money out of the bank every month and make the house payment,'" said Graves.

Additionally, explaining your family's budget will help your kids understand why they cannot always have new things. And while you're at it, use the conversation to talk about wants versus needs and how savings is integral to your budget.

Darrington says she has told her children that they cannot have an item until they can save up enough money to buy it. Once they save the money, they can go to the store together and purchase it. Also, give your kids something tangible to work toward. Seeing the money will help them understand how it works, so do not use debit or credit cards all the time.
"If you're at the check-out counter, for example, and you're paying with a debit card, tell your children 'okay, I'm paying with a debit card, but it comes out of my bank account. So this isn't free money,'" said Graves.

Finally, sharing is an important lesson for kids. If you're not already doing it, teach your kids to give. Talk about a savings goal, and pick a charity together that your child can get excited about. In Darrington's family, they chose the Humane Society because of their dog Mimsy.

Lauren Lowrey

Jan 4, 2011

Never too early! First-graders learn money skills

Never too early! First-graders learn money skills
‘We’re changing lives,’ official says about Memphis program

The smart young savers in Kimberly Britt's first-grade class at Richland Elementary School in Memphis, Tenn., may not be able to spell "entrepreneur" yet, but she's teaching each one of them how to become one.

Budding restaurateurs, cat sitters and dog walkers, these 6- and 7-year-olds are also learning the difference between "needs vs. wants" and determining the "opportunity cost" of their economic decisions.

Watch Teaching Value of a Dollar video:

Britt reads a story about a young girl having to choose between using money she earned dog walking to buy a new vest or a bike. Camille Clippinger, 6, says she understands why the girl decided to just decorate her old vest so she could save the money for a shiny new two-wheeler.

"She didn't have enough money so she had to get one or the other," Clippinger says.
Clippinger and her classmates are learning the importance of saving, budgeting and entrepreneurship through a program called Smart Tennessee. In the past four years, the program has reached more than 70,000 students statewide in first through eighth grades.

"We're the only state that does a systematic, comprehensive approach starting in first grade, and going all the way up," says University of Memphis economist Julie Heath, who created the program. "I think we're changing lives."

Tennessee is one of only 13 states in the country that requires students take a personal finance course to graduate from high school. But Heath says it's important not to wait that long.

"We treat economic and financial literacy like reading literacy. You start early in the primary grades and build a foundation," says Heath. "Economic and financial literacy ... is not just an educational issue, it's an economic development issue."

Sharon Epperson