Teach Your Kids Money Education Early

by Dr. Andria Glasser Das

How old were you when you started investing? Twenty? Thirty? When you had kids? Haven't started yet? How did you learn about investing? Advice from a financial consultant or friends? Books? Trial and error? Most likely, it wasn't from your parents. In my family, like many others of my generation, money was not a subject for open discussion. We never talked about how much my dad made or what was done with it. My parents opened a savings account for me when I was about 10 and whenever I had put a few dollars together, I'd give them to my dad to deposit for me. I think I was 30 years old before I did anything else with my money. I had (and still have) a lot to learn.

We wanted to do things differently with our kids. We wanted to be open (within reason) about money. We wanted them to grow up knowing about money beyond just how to make change. We wanted to start early so an understanding of money was as natural a part of their lives as learning how to read or do arithmetic. We wanted them to be financially savvy, but were not sure how start.

Our oldest daughter turned five in December and for her birthday she asked for a piggybank (among about 30 other things). I started looking online and found all manner of darling, hand-painted, customized-with-your-child's-name piggybanks. Then I saw an ad that caught my eye. It said "The Money Savvy Pig is the piggy bank for the 21st century."

The Money Savvy Pig is offered by a company called MSGen, which stands for "Money Savvy Generation." The company's mission, stated on their website http:

www.msgen.com, is to create and "market innovative products to help parents and educators teach kids the skills of basic personal finance." Their piggybank has four chambers so children can allocate their money towards spending (for something they want to buy immediately), saving (for something they want to buy in future), investing (for monetary growth), and donating. The bank provides a jumping-off point for a discussion with your children about the rewards and consequences of allocating their money in these ways. Through making their own decisions about how to use their money, they can see the tangible results of these decisions. The company also offers a coloring book, video and book (for teens), and a personal finance curriculum for children ages 5 to 12 (available in classroom and home versions).

Another company, Prosperity4Kids (http:

www.prosperity4kids.com), offers a piggybank with the same four chambers, but a different design. They also have an allowance chart for ages 5 through 14 that comes with magnets to represent chores and their accompanying monetary value. The chart helps parents to instill in their "children the fundamental idea that effort is rewarded."

To teach young children coin and bill recognition, money counting and making change, check out http:

www.moneyinstructor.com. For older kids, they have lessons on using a checkbook and basics of economics and finance. You have to pay for the full use of the website, but you can join for free as a limited member and have access to some of the games, printable worksheets and lessons.

Being financially knowledgeable is not a luxury. It is vital to our security. This is truer for ours than for our parents' generation and it will be even more true for our children. Fortunately, there are now products and resources that help fill that vast gap between teaching kids how to make change and teaching them the significance of a P E ratio. Last night, when my daughter earned $.16 interest on the $1.55 she had in the investment compartment of her Money Savvy Pig (10% a month--not bad!), the joy of "money making money" was apparent. The concept of investing had taken hold, and she's not even 30!