kids money

Using the Recession to Teach Kids Financial Skills

March 08, 2010 05:40 PM
by Colleen Brondou
With many kids witnessing adults losing jobs and families losing homes, now is an opportune time to teach kids smart money management skills.

The ABCs of Money

Whether kids have experienced the fallout of the economic recession first-hand, or just heard about it in the news or from neighbors and friends, now is a great time to start teaching them the value of money. According to Claudia Buck, writing for the Sacramento Bee, not only are kids ready for money-management knowledge, they “are hungry” for it.

"Teaching children the basic rules of good money management—like 'spend less than you make,' 'pay yourself first' and 'keep a budget'—is key to their success as adults," Karen Anderson, chairwoman of the California JumpStart Coalition, which promotes financial literacy, told Buck in an e-mail. "The economic difficulties many families are dealing with in this recession are, ironically, also an opportunity to help kids learn these critical financial concepts."

Karyn Hodgens, a personal finance educator who teaches at elementary and middle schools, launched a free, 15-day money-management course for parents and kids, The Sacramento Bee reports. “Beyond the Piggy Bank” sends a daily e-mail featuring basic personal finance topics that aim to inspire families to start talking about money.

Elizabeth Comiskey, a parent with two kids, ages 5 and 9, enrolled in “Beyond the Piggy Bank.”

“Perhaps our children won't be as intimidated by finances as we were and can make sound decisions at a young age," Comiskey told Buck in an e-mail.

Analysis: Talking to kids about money and the recession

Though Hodgens says it’s “more in vogue than it ever used to be” to discuss money matters with kids, when is a good time to start? Mellody Hobson, president of Ariel Investments and a personal finance contributor to “Good Morning America,” says parents should start talking money basics with their kids as early as age 5. She recommends starting with the difference between coins and bills, explaining bartering and showing the difference between the value of items. From there, Hobson suggests teaching about spending and saving, and how to do both responsibly.

Putting money management into the context of the current recession can help kids understand why they may have to pass on the latest video game console or miss out on summer camp this year. Experts recommend sharing books and family stories set during past periods of economic distress to make the information more accessible and relevant to kids’ lives.

Reference: Teaching kids about money

There’s no time like the present to begin teaching kids about fiscal responsibility. Get some quick tips on teaching your child how to become financially savvy.

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