What You Can Learn by Teaching Your Kids About Finances
April 19th, 2012 - Category: Financial Literacy
Research shows that most Americans have poor financial literacy and fail to plan ahead for major life events such as retirement and paying for children’s education. Parents who are actively teaching their children about finances and money management are bound to learn a few lessons themselves—and maybe practice what they preach more religiously.
“To teach is to learn twice,” wrote French essayist Joseph Joubert, and that sentiment rings true for parents teaching financial literacy to their kids, says Stephen Rhodes, CFP, managing principal of Strategic Partners Wealth Management in Creve Coeur, Mo. “When you are responsible for teaching your kids about money, it forces you to understand the material in a different way,” Rhodes says. “The myriad of questions you will get from your kids requires you to spend time thinking about the topics, and in turn, helps you to gain a level of understanding not possible otherwise. I have found that not knowing the answers has been the best thing for me long-term, as it causes me to conduct my own research. The lessons I have personally learned seem to stick longer than those I heard about secondhand.”
For instance, by making a conscious effort to teach your children about wise money management, you will learn:
- 1. Being consistent. “When you begin to teach your kids about money, there is a built in accountability,” Rhodes says. “For example, if you provide your kids with piggy banks and communicate that you will provide them with an allowance so that they can learn the importance of giving, saving and spending, the pressure is on you as a parent to make good on your promise. Should you get busy and forget, your kids will promptly remind you about your commitment. The built-in accountability that comes with teaching your kids about money teaches you to be consistent, and once you’re consistent, there is not a money topic that you can’t master.”
- 2. Developing new habits. Working with children to help them develop financial skills can also help give you the self-control to develop new financial habits of your own. Just as your exercise habits and eating habits determine your body weight and physical health, your financial habits will determine your financial health. “If we were to teach and show our children how to save, not only would they save, probably for a lifetime, but so would we,” says Neil Palache, a certified Women’s Money Coach and founder and CEO of the Wealth Creator Company for Women, Inc., in Westlake Village, Calif.
For instance, with their own children, Palache and his wife have established what they call “the Money Inn,” a place where every member of the family drops coins each day. “The kids each have several full piggy banks that they have taken upon themselves to fill,” Palache says. “And as a result, my wife and I have become better savers too.”
- 3. Setting an example. Many of today’s parents have learned to rely on credit cards and other debt instruments. “If we want something, we buy it,” Palache says. “However, we also often struggle because our kids are constantly asking us for things — toys, candy, movies. Very few people have unlimited resources, especially given the current economic climate.” Beyond talking to your kids about why they cannot have something they are asking for, the best way to teach them is to apply that same restraint to your own spending.
“Are you saying no to eating out with the kids and then doing exactly that during the coming weekend?” Palache says. “Maybe there’s a lesson to be learned. Eat out less. Eat home more. Your kids will appreciate it and so will you.”
MyJobChart.com Welcomes Heifer International as Premier Charity
April 19th, 2012 - Category: Teaching Kids to Give
The almost 140,000 young users of the online chore chart, MyJobChart.com, will now have a chance to help by donating livestock to families all over the globe.
My Job Chart announced this week that Heifer International has been added as one of its premier charities, all part of the unique My Job Chart approach, that provides children the opportunity to “save,” “spend” or “share” the points they earn from doing their chores.
An astounding 10 Million chores have been completed by kids using the My Job Chart system over the last 2 years.
“When I first created the online chore chart, I did so to encourage my own six children to stay on task and to complete their chores,” says Gregg Murset, founder of MyJobChart.com. “More than that, though, I wanted to teach them how money works and help them see the rewards that come from saving and the joy that can come from giving to others.”
Murset says Heifer International perfectly fits with what MyJobChart is accomplishing.
Heifer International is a global nonprofit humanitarian assistance organization working to help end hunger and poverty and at the same time protect the environment and care for the Earth. Heifer provides living gifts of area-appropriate livestock and training in environmentally sound agricultural practices to families in need to help lift themselves out of poverty to become self-reliant.
“As users of My Job Chart decide to ‘share’ and designate the points they earn to go to Heifer International or another charity, these young people begin to feel that their work truly does matter. More than just pleasing their parents, they learn they have abilities and opportunities that can make a difference on a much grander scale,” says Murset.
While young users are drawn to the free online chore chart for its ease of use and the high-tech feel they love, parents are pleased with the less-obvious benefits of My Job Chart. My Job Chart “gets kids and parents talking, it changes the entire conversation when it comes to work and money,” Murset says.
Bottom line, Murset says, “It’s free, and it works! MyJobChart.com is just a fun, easy way to instill work ethic and build character over time. Now, with the opportunity to contribute to Heifer, users can feel the satisfaction that comes with helping to lift others out of poverty and become self-reliant .”
Beginning Habits of Money Management
April 11th, 2012 - Category: Budgeting
Remember when we suggested that your kids (and you) keep track of every cent spent for 30 days? How is that going for your family? Hopefully, it’s starting to become a habit – one that will continue beyond the initial 30 days. It’s important to have a clear picture of your spending habits as they really are and not as you may think they are. Remember, this is not a time to make judgments on how your kids (or you) handle money – this is simply to track spending habits, not change them; at least, not yet. Record-keeping helps take the mystery out of our spending habits, as well as eliminate excuses. Just don’t use it as a time for lectures to kids or self-depreciation. This record will later become a useful tool. As we learn better, we can do better.
There are several ways to go about this type of record-keeping. Get a receipt for every transaction; even a stick of gum or a soda and keep it in an envelope or certain part of your wallet. If no receipt is available – write it down and keep the note with your receipts. Each night, gather your receipts and log your transactions into a spreadsheet or Qicken® or a small notebook; whatever works for you. Small purchases are the easiest to be overlooked so pay special attention to them. You may prefer to carry a tiny notebook to record your expenses in. Find a method that you can keep up and help your children do the same and then stick with it.
Keeping track of your money is just as important as saving your money. Now is the time for a little OCD to kick in. Every time any of you get money (paychecks, odd jobs, the kids’ MyJobChart chores, even a dime picked up off the ground), LOG IT IN. Do the same thing every time money is spent; every cent that enters or leaves your life … write it down. Be sure to remember the three-legged stool of financial literacy (“saving, sharing and spending”) we have discussed in previous blogs and enter the amounts saved or shared. Record EVERYTHING.
As you and your kids do this, you will feel a sense of power. You will start being in charge of your money instead of the other way around. And if you are one of the lucky ones who has mastered these skills already – more power to you – but for those who still feel at the mercy of their money, or lack of it, it’s time to show the money who is the boss. Children who learn money management skills before they leave their home for college and employment as adults will find great joy, peace and success in their lives. And speaking of college – next week, we’ll delve into saving for college – a huge aspect of financial literacy. Talk to you then.
Charity, World Bicycle Relief, Becomes Preferred Charity With MyJobChart.com
April 9th, 2012 - Category: Announcements
Humanitarian Group Heifer International Partners With MyJobChart.com To Help Kids Give To Kids
April 5th, 2012 - Category: Announcements
My Job Chart is proud to partner with Heifer International. Heifer International is a nonprofit,humanitarian organization dedicated to ending hunger and poverty and caring for the earth. Heifer currently provides livestock, trees, seeds, and training in environmentally sound agriculture to families in more than 50 countries, including the United States. Heifer emphasizes community involvement and provides communities with a values-based planning and management model to guide thier development projects.
April is National Financial Literacy Month!
April 4th, 2012 - Category: Financial Literacy
April is also known as a time of fresh starts and renewals which makes it a perfect time to start teaching our kids about financial literacy, if we haven’t been doing so already.
It might be surprising how easily young children can grasp the principle of “financial literacy” when presented to them through stories and videos. Help them recognize the choices characters in TV shows or books make when it comes to managing their money. For example, when a character makes a purchase, discuss if it was a “need” or a “want” and if it was “planned spending” or “unplanned spending.” If a character spends his or her money on something unimportant and then miss out on something they really wanted, talk to your child about it.
In this digital age there are so many resources readily available to us, such as My Job Chart, that it’s relatively easy to put together some little age-appropriate “lessons” that might appeal to your child. Here’s a link to a cute PDF file for a story that can be printed off and colored about a squirrel that saves nuts in preparation for the winter. It is found at the FUNancial Literacy website.
Talk to your children about what kinds of things they might need to save for. Many young people contribute to their college fund and it’s never too early to start. Or maybe they want a guitar or drum set or rollerblades – encourage them to earn at least part of the money themselves. Planning ahead pays great dividends. Warren Buffet said, “Someone is sitting in the shade today because someone planted a tree long ago.”
For older kids, give them a certain amount of earmarked money to be in charge of, other than the money they earn at myjobchart.com. Look for opportunities where they can handle a certain amount of money – or have them research the cost of an upcoming family vacation and try to find the best deals. Give them the grocery list and food money for a week and let them try their hand at it. You can be creative in any number of ways that work for your family to give your children real-life experience in handling money. Teens will also find quite a few FaceBook pages on “Financial Literacy” if they do a search for it. “Liking” those pages will put good ideas in front of them often on their newsfeed.
Let your older kids save for summer camp or scout camp. Find ways to help your children learn to handle money wisely while they are still at home, under your watchful eye. Smaller errors made today and learned from can prevent larger financial mishaps when they reach adulthood.
It’s tax season. While you may prefer your children not to know the exact amount of your family’s income, let your children know the percentage that goes to taxes. Talk about what kinds of things are funded with our tax dollars. As you talk about the need to contribute to society in this fashion (no doubt there could be plenty of opportunity to explore the wasteful use of money as well), but you can also discuss the need and joy of contributing to the family. Let the kids help save for something everyone in the family is looking forward.
The nice thing about having a “National Financial Literacy Month” is that it gives us a chance to stop and reflect on things and to think about where we are at financially and where we want to be as well as reminding us to involve our children in thinking and learning about financial literacy. Encourage them to track every single penny they spend. Are you keeping a 30-day record as we suggested in our last post? It can be very revealing and it will help you set up budget areas when make out your spending plan.
Oh, and have a Happy Financial Literacy month!!