Dreaming of a better financial future for our children

One of my dreams is pretty simple, and at the same time enormously difficult. It's one that many parents share: to help my daughter learn to be financially successful and avoid many of the mistakes I have made.

Teaching kids about money is no easy task, as any parents will tell you. Our children have their own personalities. We have our own financial hangups we pass on to them whether we realize it or not. (Phil Laut describes it as relying on the thinking gained from 20,000 meals with financial advisers who gave us mixed messages about money, such as money doesn't grow on trees, you must work hard for your money, don't take money from strangers.)

Add to the mix the fact that our kids are assaulted with unprecedented numbers of commercial messages telling them they need the latest and greatest toy/electronic gadget/whatever.

We also blame the schools. I can't tell you how many people have bemoaned to me the lack of financial education in schools. It's understandable that we feel ill-equipped to teach our kids well ourselves, so we think the solution is to turn the job over to "trained professionals." As a result we've seen financial literacy commissions formed, coalitions created and mandatory financial education requirements instituted in some of the more "enlightened" school districts.

Problem is, all the things we are trying -- allowances, stock market games, financial classes at school -- aren't working.

One of my favorite money educators, Sam X Renick, creator of the Sammy Rabbit series of books and music CDs, recently forwarded to me an article that explains what is happening.

Everything You Know About Kids and Money is Wrong

The article discusses research by Lewis Mandell at SUNY Buffalo. Mandell is a highly respected expert in financial education and literacy among young people. Sam summarized the research findings and tips as follows:

FINDING NO. 1
Money classes don't make kids smarter

SOLUTION:
Start financial education sooner, at home and at school.

FINDING NO. 2
Money classes don't change behavior

SOLUTION:
Make saving a habit.

FINDING NO. 3
An allowance can make things worse

SOLUTION:
Set goals, not doles.

FINDING NO. 4
Stock market games are for losers

SOLUTION:
Let children learn from real mistakes, made over time.

TIPS

What parents must do to help your child grow up to be smart about money, take these steps:

Start young
Push your kids to save
Help them set goals

Given the freight train of debt that is barreling down the tracks (individually and nationally) it's critical that we start to find things that work. Our kids are facing difficulties we never imagined as we pull out all the stops to give them the things we never had as kids.

I don't have all the answers but I can share one program that has worked for me: the Sammy Rabbit music CDs and books Sam X. Renick created. They turned my daughter onto saving before she was in kindergarten. Her savings is now far past that of her friends, and she is following the investments her Dad is helping her make with some of the money she's accumulated.

She might just fulfill my dream for me.

What are your dreams for your/our children's financial futures? How are you trying to make them come true? Share your thoughts here!

Comments

[Liz S.]

Well, I've been working on it with my step daughter but it's a long road since she doesn't live with us. Unfortunately, I'm sure we started late because of the living situation but we're going to work with the time we have and hopefully it's not too late.

I researched and implemented an allowance system for her (with mom & dad's approval, of course). I even made her sign a contract. I posted all about it on my blog here: http://www.moneystuffed.com/2006/11/kids-allowances/

I'm also hoping to do mini money lessons, which I also posted my first one on the blog about how $10 doesn't buy $10 worth of stuff: http://www.moneystuffed.com/2006/11/mini-money-lesson-1/

It's a work in progress and I'm no expert, but I'm just hoping that by remembering the things that confused me and lead me in the wrong direction, I can help to educate her a little so she can avoid the same mistakes.