A little greenback guidance
Kids and cash meet up early these days. How to help them learn to
Money. Many American kids have it. Lots of it.Skip to next paragraph
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Children age 10 through 19 expanded their stake in the US economy to a record-setting $457.9 billion in 1998 - including $105.1 billion in direct expenditures and $20.9 billion in savings - according to the Rand Youth Poll, a New York-based teen-issues consultancy that has been tracking the phenomenon for 40 years.
But do they know what to do with it? And is anyone teaching them?
Consider Emily Campeas, a 5-1/2-year-old in Skillman, N.J. Both her parents, Faye Brookman and David Campeas, work, and time is a precious commodity in the household.
When it comes to teaching Emily about money, they have good intentions. Often, however, the follow-through just isn't there.
"We tried to set up a plan where Emily would get a weekly allowance in return for making her bed and doing some chores, but in the crush of daily living, I just lost track of it," Ms. Brookman says. Recently, Emily wanted a Buzz Lightyear candy dispenser at a fast-food restaurant that cost about $2.
"We told her she would have to give us the money when we got home, but then we just forgot about it. We often tell her she is going to have to save up for something she wants, but then we just break down and buy it for her." Brookman says she feels some guilt about the situation. But she and her husband have resolved to be more consistent. In that, they are not alone. "It seems to me that fewer and fewer kids are getting a real allowance these days," says Irma Zandl, principal of The Zandl Group, a New York-based consultancy that advises big companies on youth issues.
"They don't have to budget themselves. When they need money, their parents just give it to them."
Research indicates many kids are clueless when it comes to money. A new nationwide survey of 12- to 17-year-olds conducted for The John Nuveen Co., a financial-services company in Chicago, found "a continuing trend of financial illiteracy among America's youth, who are the likely beneficiaries of wealth from one of the most prosperous periods in the nation's history."
Specifically, the survey found that 1 of 2 kids said they had never been taught the "facts of money" by their parents, and the same percentage said they received no financial training in school. A third keep their savings in a piggy bank rather than a financial institution, 60 percent said they don't get an allowance - validating Ms. Zandl's observation - and most displayed little understanding of financial markets.
So can anything be done about this situation? The good news is, the answer is "yes," says Neale Godfrey, the author of "Money Doesn't Grow on Trees" and a dozen other books on kids and finances.
"When children are taught about money at a young age, they grow up to be more responsible, and the younger you start, the easier it is," she says.
Ms. Godfrey advocates attacking the problem on two fronts: through parental interaction at home and with financial education programs in schools. A former banking executive and founder of The First Children's Bank, she has developed a financial education curriculum called Kid$ense for Nuveen.