Kids and Money

National Public Radio (NPR) has run a series on young people and financial literacy this week. It is a series worth listening to, or going back and reading on the NPR Web site (http://www.npr.org/2011/05/17/136363695/monkey-bars-no-more-trying-the-money-playground). On Tuesday, the series described a program that gives Fairfax County (Virginia) schools hands-on experience in budgeting and financing. As students move around Junior Achievement Finance Park, they make purchases, apply for loans, and try to make ends meet on limited budgets. The students usually are given a profile—single mom with an eight year old and a six year old—and then must figure out how to pay for housing, food, transportation, medical care, etc. on the amount of money they are told that they earn. The kids find out fast how hard it is to make ends meet and the importance of a budget.

In the NPR story, one student said that when her parents discuss finances, she is asked to leave the room. The student said she would rather not know how hard it is for her parents because it would make her feel bad for asking for things. Whoa. That raises an alarm for me. I believe kids should learn budgeting and the importance of living within their means—regardless of what “things” they want.

NPR went on to ask: “If this stuff is so important, do parents need to share more, and discuss it at home?” My answer is yes. In Toward College Success: Is Your Teenager Ready, Willing, and Able?, I devote an entire chapter to the importance of teaching our kids about money, how to budget, how to save, and how to pay for college. Teaching such skills can be difficult for many of us because so many adults are not good money managers themselves. How would you answer the question posed by NPR? If you answer yes, how are you teaching your kids about financial responsibility?