Steps to Financial Freedom: Teaching Children Smart Financial Habits

Encourage clients to take the time to engage their child in the shopping process by explaining what’s happening, asking questions, and answering their child’s questions.
Contributions by Molly Herndon and Carolyn Bird

One of the most important things a parent can instill in their child is a sense of financial responsibility, but talking to children about money is often not a priority for parents. Parents who model smart financial behavior teach even very young children how to make decisions that align with their values and goals. A very basic message parents can share with children is that financial decision-making is about making choices. Parents who are intentional about children how to make choices among many options have a better chance at being successful in helping their children develop the practice of active decision-making. The best news is a little effort can have a big payoff, as these lessons are likely to be carried into adulthood. Here, in the final installment in the November-long “Steps to Financial Freedom” series we offer tips PFMs can suggest to families to teach their children to be savvy consumers.

Look for Teachable Moments
A family’s day is made up hundreds of opportunities to talk about money. Whether your client’s family is shopping, watching television commercials, running errands, paying bills, or buying gas, each consumer exchange presents a chance to teach valuable lessons. Encourage clients to take the time to engage their child in the process by explaining what’s happening, asking questions, and answering their child’s questions. A teachable moment can be as simple as letting the child know that if they spend all their money at the fast food restaurant, then there won’t be enough money to buy the action figure when you go to the store later that day or week. It won’t take long for the child to understand that once the money is spent that other items cannot be purchased. Soon, the child will begin to prioritize what is important to them without parental coaching.

Parents don’t have to go it alone. The program Thrive by 5 is designed to teach preschoolers about saving and spending. Here is a list of 17 things that 5 year-olds should know about money. Involving your older children in your decision process can provide valuable lessons. Encourage your clients to help older children learn to be savvy decision-makers by helping their parents identify sales and better prices. Soliciting children’s observations about banking and credit processes gives parents an opportunity to gauge the child’s understanding, correct misperceptions, and to reinforce valid observations. However, the most valuable moments are the observations children make are those of their parent’s financial management practices. So, a great place to start in teaching financially savvy children is to support clients in striving to be a financially responsible role model.

Use Current Events
Some parents may avoid topical conversations about the economy and finances in front of their children out of a fear of making their children anxious. PFMs, you can teach your clients that talking about the economy may actually decrease children’s anxieties. Tell clients they don’t have to shy away from discussing the current state of the economy; just find a way to reach the child on their level. The NYU Child Study Center has some suggestions on how to approach the topic of the economic downturn, by a child’s developmental stage.
It is important to talk to children if a friend or relative has lost a job. Tell clients to explain why this happens and talk about any anxiety the economy may be causing for their children. Specific to military families, openly discussing how deployment impacts a family’s finances can relieve children’s fears. Prompt clients to talk about changes to a family’s finances and the adjustments that will need to be made.

Family Engagement
America Saves has a Military Youth Saves program in which kids can take a pledge to save, get tips for saving, and parents can read suggestions for smart saving strategies. We will highlight the Military Saves campaign in a future posting, when the campaign gets up and rolling in the early part of 2012.

Families should look for ways to save and budget together so that children can learn by contributing to the development of a healthy spending plan. Tell clients to ask children to come up with new ways to save money in the house. For example, parents can ask children to determine which pizza coupon offers the better deal.

Some families might decide to give children allowances in exchange for chores; suggest clients assign a monetary value to certain tasks in the home so that even very young children may begin to understand the consumer process. Parents should also be encouraged to help their child manage their money by supporting their saving for goals, which teaches the lesson of being rewarded for saving.

Making savings and smart financial decision making a part of the daily family conversation is an excellent way for parents to encourage this responsible behavior.

What strategies for teaching children about smart spending have you heard about? What works well? What doesn’t work so well?

Other resources:
http://www.extension.org/pages/35906/when-should-i-begin-teaching-my-child-about-managing-money

http://www.extension.umn.edu/distribution/youthdevelopment/DA6116.html

Google+, What’s the fuss?

If you are interested in learning a bit more about Google+, join +Kevin Gamble and +Stephen Judd for a free eXtension webinar on Friday December 2, 2011 at 2 PM EST.

Launched less than six months ago (June 28, 2011), Google+ is a social networking service provided by Google, Inc. As a social network, Google+ shares traits (ability to share updates, links, photos, and videos) with other large social networks like Twitter and Facebook.

I began using Google+ when it first became available in a field-trial status, and have been impressed with its ease of use and the level of interaction among the users. Because users can comment on posted content, there isn’t a length constraint, and comments remain with their original post, conversations are easier to have than they are on Twitter. I’ve also found the ability to share to limited groups easier to use than similar features in Facebook.

With the recent advent of Pages in Google+, businesses and organizations can also interact with other Google+ users. I’m holding off on fully endorsing the use of a Google+ page, until features like multiple administrators are made available.

Below is some basic information about Google+ and how it works:

Your Profile:
At the core of Google+ is your personal profile, information you enter about yourself and can include: an Introduction, occupation, employment history, education, places you’ve lived, contact information, demographic information, photos, and related links. There are privacy settings to control which information is visible publicly, versus visible to people you connect to on the service.

The Network:
The usefulness of Google+ will depend on who is using Google+ among the folks you want to interact with and on making those connections. When you first start using the service, you can search for people in your address book you may know are using Google+, or by searching by name or topic of interest. As you add people to your network, you place them in Circles, which later allow you to publish updates to selected Circles, or view updates from one Circle at a time.

Following people is not strictly reciprocal:
With Google+, you can follow an individual without them following you back, and vice versa. (This is in contrast to the way Facebook originally worked, where the process of “friending” someone, required the agreement of both parties. Facebook has since introduced the subscribe feature, which changes this dynamic.) However, you do have the ability to block a person, so he or she can’t comment on your posts and will only be able to see information you post publicly.

Posting:
You can publish content to Google+ through the web interface, mobile applications, Google Reader, or through +1 buttons on various websites. Unlike Twitter, there’s no character limit for Google+ updates, and they can include embedded photos, videos, and links. However, formatting options are limited to bold, italics, and strikethrough. When you publish content, you can choose the people to share that content with, by making it Public or sharing it only with selected individuals or Circles. The users you share a post with will have the ability to comment on or reshare the post, unless you have locked the post or disabled comments.

Reading posts:
By default, Google+ will display content that people you follow have posted. These posts may have been shared publicly, or shared with you directly or via a Circle the poster has you in. You will also see your own posts. You can comment on, reshare, or +1 these posts. You can filter this view by selecting to view the posts from an individual Circle instead.

Other features:
Google+ has several other features in addition to content-sharing:

  • Hangouts (group video chat for up to ten participants) (I have found this to be one of the most useful tools on Google+ for enabling real-time collaboration with geographically dispersed groups)
  • Messenger (group text chat for up to 50 people, available through mobile application)
  • Games
  • Search (ability to search–based on people and content–and save searches)
  • Photos (share photos from Picasa, and instantly upload photos from mobile devices)
  • Pages (a way for companies, organizations, brands, and other non-persons to share content and interact with other Google+ users)

Overall, Google+ has become my preferred social network and I look forward to using it as it continues to change. Like any social network, it will benefit from wider adoption, so that I can find more interesting folks to interact with.

If you are interested in learning a bit more about Google+, join me and +Kevin Gamble for a free eXtension webinar on Friday December 2, 2011 at 2 PM EST. Details are at: http://www.extension.org/learn/event/372

More information:

Author: Stephen Judd (+Stephen Judd, @sjudd)

Creative Commons License This work is licensed under a Creative Commons Attribution 3.0 Unported License.