How To Teach our Young Children to Be Financially Responsible

I am currently a Project Manager for a Financial Stability Committee through our local United Way, and I have done alot of research on financial literacy. One of the topics that keeps coming up is being able to teach our children at an early age to be financially stable or financially smart with their money.


In doing the research it was staggering to see how much debt our children are in before they even own a car. In the Midwest alone, 82% of the undergraduate students have credit cards, and on average they have about 4 credit cards and the average credit card debt is about $2,500.


What was more alarming was the report card that came from the National Jump$tart Coalition that showed Indiana high school students are not passing the financial literacy test being given. Six in ten failed (Networks Financial Institute. 2005 Jump$tart report card quantitive research. Data provided by NFI).


What do we need to do as parents especially in such a time of economic "crisis" to be able to help our children understand how to manage their money.


Well start young. As you can see by this video teach them at a young age about saving, and giving back to the community. http://www.youtube.com/watch?v=ctHsdu40JKM

Go to your local bank and help your children open up a Junior Savings account. Alot of banks are sponsoring classes or programs teaching financial literacy to our youth.

Help them to understand their "wants" and "needs". When they really want that cd they can use their own money, but then show them now that they withdrew that money they have less money. So ask them was the cd really worth it? Engage them and help them to understand the value of money and what happens when you use your credit card too much.

Don't be afraid to use the current economic situation to teach your kids about savings. They don't have to know all the financial details of your families economic status, but let them know why you are telling them no to a puppy or the Abercombie jeans.

There are alot of useful websites to go to help you with this task.