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From a Child's Perspective:
Art Linkletter once asked a four-year-old boy, "What do you want to be when you grow up?"
"I don't want to be anything," the boy replied.
"Don't you want to get married?"
"If I have to."
"And how will you get money?"
"My wife can work."
"But suppose she won't?"
"I'll send for my mother."
What are some surefire ways to make a person fall in love with you? "Tell them that you own a whole bunch of candy stores." -Del, age 6
He must manage his own family well and see that his children obey him with proper respect. (If anyone does not know how to manage his own family, how can he take care of God's church?)-1 Timothy 3:4-5
Discipline your son, and he will give you peace; he will bring delight to your soul.-Proverbs 29:17
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You're already on the right track.
By starting to read this book aimed at equipping parents to teach financial principles to their kids, you're acknowledging your role. Whether you like it or not, as a parent you realizeyou have some role in teaching your kids financial principles. Somehow, somewhere, in some way, you've sensed that raising money-smart kids is important.
Perhaps you want your kids to avoid some of the financial struggles you've experienced.
Perhaps you're tired of fighting the daily dollar battles with your kids. Your son expects you to spend big bucks on name-brand athletic shoes. Your daughter thinks she's entitled to designer clothes because "everyone else" has them. You're tired of your kids begging to order the most expensive item in the restaurant plus an appetizer and dessert.
Perhaps you realize that financial wisdom will help your child in so many areas of his or her future. A major factor in most divorces is poor financial management and the resulting stress. Many people are stuck in jobs they don't enjoy because they're trapped by their poor financial decisions. Many Christians aren't experiencing spiritual maturity and the joy of giving because they're "slave to the lender."
Perhaps you know you have some self-interest in this matter. A big motivation for parents is to avoid "boomerang kids." After enjoying an empty nest for a while, you don't want it to be filled again with 27-year-old birds who should be flying on their own. As our friend the late Larry Burkett said, "I wonder if parents would be more serious about teaching their kids financial principles if they realized their kids would be choosing and paying for their nursing home someday!"
The statistics show you're on the right track. The evidence is clear. Five powerful trends, supported by many studies and surveys, point toward the necessity of teaching the next generation the truth about financial principles. (Note: Unless otherwise stated, the following figures apply to the U.S.)
Trend #1: Financial illiteracy is the norm among America's youth.
A Visa survey found that 49 percent of youth think they're more likely to become millionaires by starring in a reality TV series than by learning how to budget and save wisely. A Consumer Reports survey found 28 percent of students didn't know credit cards are a form of borrowing, and 40 percent didn't know that banks charge interest on loans. The National Center on Education and the Economy found that nearly two-thirds of American adults and students didn't know that in times of inflation, money loses its value. Between 1990 and 1999, there was a 51 percent increase in annual bankruptcy filings among adults 25 years of age and younger.
Trend #2: Kids and teens have money and spending influence-and advertisers and credit card companies are coming after them.
MarketResearch.com reports that in 2003, teens spent $175 billion, averaging $103 per week. The so-called "tweens," 8-to-14-year-olds, spent $39 billion in 2003. Younger kids directly influence the spending decisions on their behalf to the tune of $117 billion. Marketers target children as young as 18 months. By the time your kids reach 21, they'll have seen or heard an estimated 23 million advertising "impressions." One consumer-marketing group reported that today's kids will have seen 360,000 30-second TV commercials by the time they're 20 years old. One-third of high school seniors use a credit card. Not surprisingly, seniors who used a credit card scored significantly lower on a national, personal finance literacy survey than seniors who didn't use a card. More than three-fourths of college undergraduate students have credit cards; most have multiple cards with an average unpaid balance of $2,748. Ninety-five percent of college graduate students have cards; each has an average of four cards with an average unpaid balance of $4,776.
Trend #3: Parents apparently presume someone else is teaching kids about money and finances.
Eighty percent of parents surveyed believed that schools provided classes on money management and budgeting. Only seven states require students to complete a course that includes personal finance before graduating from high school. As a comparison, sex education is taught in 90 percent of public schools starting in fifth grade; it's a required course for 69 percent of schools. Much of the limited curriculum available in schools is provided at no charge from various education coalitions. Usually the main funding sources of these coalitions are Visa, American Express, or other credit card companies (not exactly the most impartial source of wisdom). Pastors are frequently silent on the topics of money and stewardship. Very few evangelical churches have active stewardship discipleship courses for equipping young people to handle money from God's perspective.
Trend #4: Whether parents like it or not-or even realize it-kids look to them for financial guidance.
The American Savings Education Council found that 94 percent of kids turn to their parents for financial information. Sixty-three percent of older teenagers, notorious for knowing it all and not listening to parents, say they get most of their information on money matters from their parents. The Financial Educational Survey by Capital One found that more than 70 percent of parents say they have spoken with their teens about credit and using credit cards wisely; less than 44 percent of the teenage children of those respondents say their parents have talked to them about credit cards. Meanwhile, 54 percent of parents rate their teenagers' knowledge about managing money as "good" or "excellent," while an overwhelming 78 percent of the teenage children of those respondents rated their knowledge as merely average or even poor. The Jump$tart Coalition survey found that only 26 percent of 13- to 21-year-olds reported that their parents actively taught them how to manage money.
Trend #5: Financial support to churches and ministries is tenuous at present-and likely to be even weaker in the future.
One study estimated that most church giving comes from people over age 55. Barna Research Group found the following in its 2003 survey of giving in churches: The mean amount of money donated to churches and other worship centers in 2003 was $824. This is less than the inflation-adjusted amount for 2000. The segments that were least likely to tithe included adults under 35 and those from households with a gross income of $40,000 to $59,999. Howard Dayton, CEO of Crown Financial Ministries, has stated that many pastors have told him most of their giving comes from members over 65. They estimate that it takes five people under age 35 to replace one senior's giving.
The evidence is clear: Kids need financial training, and they need it from you.
We know you have urgent tasks on your to-do list: chauffeuring your kids to the next music lesson, attending their next ball game, trying to get them to do their homework, and prying them off the Internet. Such is the tyranny of the urgent in modern life. The ringing phone and the broken garage door opener tug us away from the truly important, eternal issues like daily prayer time and nurturing our children. Our aim in this book is to help you complete the truly important task of equipping your children to do well in an area crucial to success-wise money management.
How do you teach your kids to master their money? How can they be generous givers, sharp shoppers, savvy savers, prudent planners, intelligent investors, and willing workers?
Kids learn about money from you as parents and from their own experiences. Notice that we didn't say they learn much at school. How ironic that they go to school to learn how to be successful in life, but don't learn how to manage money wisely! In fact, the mere act of going to advanced schooling may result in huge student loan debts.
When your kids learn from you, you're either teaching intentionally or inadvertently-the latter through the habits they observe. Teaching intentionally is better. You do that by sharing truths "as you go" or by creating experiences that help kids learn. Let's look at these methods a bit more closely.
As You Go
An efficient approach to help your kids become financially mature is to teach them "as you go." The lecture method rarely works at home, anyway. Parents think they make good speeches, but kids don't agree.
You may think that we authors are financial nerds who'd enjoy sitting down on a Saturday night for two hours and discussing with our children the benefits of budgeting. We wouldn't. We can assure you that our kids wouldn't enjoy such a session, either.
God recognized that the Israelites best taught their children as they "went along." The basis for this method is found in Deuteronomy 6:4-9:
Hear, O Israel: the Lord our God, the Lord is one. Love the Lord your God with all your heart and with all your soul and with all your strength. These commandments that I give you today are to be upon your hearts. Impress them on your children. Talk about them when you sit at home and when you walk along the road, when you lie down and when you get up. Tie them as symbols on your hands and bind them on your foreheads. Write them on the doorframes of your houses and on your gates.
The instruction was to parents. Parents should impress upon their children the commandments and truths of God as they go along. If we were to reword these verses in a more modern translation, we might say the following:
Talk about them when you sit at the dinner table and at family devotions and when you drive along the highway, when you are tucking them in at night and when you are at the breakfast table and driving them to school. Write them as Post-it notes on your mirrors and pin them to the corkboards in your kitchen.
Many of the activities we've included in this book can be taught as you go. For example, the "Advertising Detectives" game can be played as you're watching a ball game on TV or as you're driving down the road and seeing billboards. The financial board games can be played during the family time you were planning to have anyway. Use some "Sharp Shopper" activities when you're at the store with your kids.
Jesus continually taught His disciples as they went along. In the middle of a field, in the temple, or at sea in a boat, He used events to teach them. Look at the following excerpts from the Gospels. These are just a few examples of many teachings introduced by the phrases "As they went along" or "During everyday happenings."
As they were walking along the road, a man said to him ... (Luke 9:57) As Jesus and his disciples were on their way, he came to a village where a woman named Martha opened her home to him. (Luke 10:38) One day Jesus was praying in a certain place. When he finished, one of his disciples said to him, "Lord, teach us to pray, just as John taught his disciples." (Luke 11:1) Then Jesus went through the towns and villages, teaching as he made his way to Jerusalem. (Luke 13:22) Now on his way to Jerusalem, Jesus traveled along the border between Samaria and Galilee. As he was going into a village, ten men who had leprosy met him. (Luke 17:11-12) As Jesus approached Jericho, a blind man was sitting by the roadside begging. (Luke 18:35) As he looked up, Jesus saw the rich putting their gifts into the temple treasury. He also saw a poor widow.... (Luke 21:1-2) Some of his disciples were remarking about how the temple was adorned with beautiful stones and with gifts dedicated to God. But Jesus said ... (Luke 21:5)
These are just a few of the many times Jesus took advantage of teachable moments. He even used arguing and bickering among the disciples: "An argument started among the disciples as to which of them would be the greatest. Jesus, knowing their thoughts, took a little child and had him stand beside him" (Luke 9:46-47).
On another occasion, "a dispute arose among them as to which of them was considered to be greatest" (Luke 22:24). Jesus overheard His disciples and used that moment to instruct them.
Maybe your kids never bicker. But if they do, follow Christ's example and use their quarreling as an opportunity to teach. Learning occurs when the pupil is willing and can relate to what the teacher is offering then. This is especially true when teaching children. Children are best taught as you go-as you go to the bank, as you go on vacation, as you go to church, as you go to the grocery, as you're buying gas. We don't want you to miss those great teachable moments.
We heard a story from a client who wondered why one child always lingered behind when the family was leaving restaurants on vacation. When confronted, the child produced a pocketful of change and dollar bills. He'd thought his parents were carelessly leaving money behind, and he was going to collect it!
Now there was a teachable moment.
You don't have to wait for your child to grab a gratuity, though, to deliver a lesson on the subject. As you're leaving a tip, explain how a waitress earns her money. Explain how it's customary for patrons of sit-down restaurants to leave a percentage.
The same is true when other opportunities present themselves. As you drive through a tollbooth, explain how users pay for certain roads or bridges. As you renew your license plate tags, explain special use taxes.
If you try to teach your children financial principles by sitting them down and saying, "Now you're going to learn how to buy a shirt wisely," you won't succeed. The best way to learn about money is to have experiences with it-in this case, to buy a shirt and to hear your feedback.
To teach your children "as you go" requires that you listen to them. When we say "listen," we don't mean only to hear their words. Listen to the meanings and feelings behind the words. What are they really saying? Why are they saying it? How can you best respond in word pictures or examples they can understand?
This type of listening means you're tuned into them, not into what's going on at work or what's on the calendar for tonight or tomorrow. It means being where they are mentally as well as physically.
Without this active listening, we'll miss the most teachable moments. We each confess that in our homes, our wives are the better listeners and teachers. It requires a constant choice on our part to listen to what our kids are really saying. We find that when we do, we're able to teach in the daily course of life. Very seldom in such instances have we set out to teach something on purpose. It's just happened "as we go."
Creating Teachable Times
To provide other learning opportunities, you can arrange situations, set up games, or create "test labs" before your kids wade into the "real world." To teach a 14-year-old daughter about the stock market, for example, we recommend an activity using a simulation of choosing stocks and tracking them on paper (see Chapter 10). This will provide some learning before she plunks down $500 of her babysitting money.
Excerpted from Your Kids Can Master Their Money by Ron Blue Judy Blue Jeremy White Copyright © 2006 by Ron and Judy Blue and Jeremy White. Excerpted by permission.
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Posted November 8, 2009
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