Emergency! Teens Need a Money Education!

[MissMoney]

I’m declaring a state of emergency on Financial Literacy! The numbers speak for themselves. Last year more students filed for bankruptcy than graduated from college and teens admit to spending 98% of what they make instead of saving it. Our society has created a self-serving, entitled generation that expects more for less.

In the US, every 7 seconds someone across America drops out of school (that’s over 1 million students every year). Translation—only 53% of all high school seniors graduate from high school and the one third that do graduate do not have the skills to do anything other than minimum wage work. Today the U.S. ranks 24th in the world in math, the average college student graduated with over $19,000 in debt, and the average in credit card debt is $2,700.

Parents need to prepare their children for the reality ahead and need to lead by example because financial accountability takes years of discipline and hard work. And if you don’t teach your children or grandchildren anything—teach them that. Coming September 1st Money Made Simple.

Is there a thread here specifically for parents? I think a community of parents who teach kids money would be extremely helpful. Does anyone agree that the younger generation is in a money management crisis? I believe this is one of the toughest and most unrecognized problems facing teens today.

[Ima saver]

I certainly agree, however, sometimes you can teach and they won't listen. I had my daughter start work in high school and insisted she save 1/2 of everything she made. I talked and talked and talked about the importance of saving. When She got married, i set down with her and showed her out to do a budget.
She never did anything I showed her and blew all her money. I finally gave up on her because she never contacts me except to ask for money.
I do think teens, or even younger, should be taught financial accountability at an early age. It seems a lot more important than some of the things taught in school.

[sweeps]

I have a feeling PrincessPerky will have a few things to say about this.

[Snoopy2645]

I am trying with my oldest she is 11 almost 12 I give her $10 a week for allowance & $10 if she watches her sisters & she must pay for everything she wants or wants to do I am hoping this helps her learn to manage money. Now my 5yr old & 2 1/2 yr old have seen me use so many coupons that they are really good about oh mom you got a free coupon for that place or whatever if we go somewhere I am thinking they will be really good money managers so we shall see

[melissalt]

Having made plenty of mistakes with my older kids, I am now trying to figure out a way to teach my 6 yr old about money. My older kids (out of college now) never got an allowance because my parents just gave them anything and everything. Back then, we had no *wants*; we thought virtually anything we wanted was a *need*! I'm learning as I go, and reading books to see what techniques others have used with young kids.

I know we are going to give him an allowance (starting now since he just turned 6), and have him divide it into one jar for charity, one for medium-term savings, one for long-term savings, and he can keep some to spend. I haven't quite figured out what we are going to base the allowance on??? He has things he has to do as part of the family, so I won't pay him for those, but he's only six and I want him to have some additional responsibilities that go along with getting an allowance even though I'm not sure what those extra things will be yet. My plan is still a work in progress, but I figure any little bit I do can only help him understand money more than he does now. Well, I hope at least!

[Ima saver]

I saw the jar thing on tv and the kids did well with it. I think they each had 4 jars, one for money to spend. I think it is a good idea. The long term money in the jar was put in savings for the kids. The medium jar was for larger purchases that they wanted, but had to wait and save for. Then there was the one for charity and they put 10% in that one. I think the other jars were 30% each. So If you gave him $6 a week, 60 cents would go to the charity jar, and $1.80 would go to each of the other 3 jars.
Obviously, to save having to have all that change, a $10 allowance would be idea. $1.00 for charity and $3 in each of the other jars.

[Diolla]

My Son doesn't get an allowance, he gets paid for working. If he mows the lawn he gets $10, does the dishes $1, vaccumes $1, babysits for the church nursery $10 etc. He also gets $25 a week for school expenses and lessons and pays for all fees, supplies, lunches, bus pass & his own voice lessons. I considered giving him money for clothes but he doesn't care enough about what he wears and would end up in rags to save the money. He also has chores he is expected to do that I do not pay him for like taking care of the animals, taking out the trash these are things he does because it is part of living in a household. I also pay him for performance at school because I feel that is his most important work right now. He saves 10%, and gives 10% to church the rest he uses for the normal teenage expenses.

As part of his preparation for real life he has prepared a budget, been taught about CC's and debt, I also share alot of things I learn on this board. I believe he has the tools and just needs practice using them.

[Broken Arrow]

You're teaching your son well, Diolla.

[Diolla]

Thank you, I try, I think it is the parents responsibility to teach children how to manage in real life. Cooking, laundry, finances, setting goals etc. I had to learn it mostly on my own and it has been hard sometimes.

He did take a personal finance class in school last year. He had fun and had some good discussions with me about some of the lessons. It wasn't a very good class but at least they are trying.

[Broken Arrow]

My parents gave me allowance, my ex gives our kids allowance, and I even recall a financial advisor recommending to give kids an allowance.

The rationale is give them a sense of finite amount, and learning to shop and save wisely.

What I've learn from my own experiences is that they don't appreciate the money, because it was simply given to them. Worse yet, they may even feel ENTITLED to said money.

In my opinion, this does nothing but sow the seeds of discontent.

I say this because, shamefully, that's how I used to view money when I was a teenager.

Today, I believe that the right thing to do is to teach children a sense of Work Ethic! Learn to work for your money, because that's what you'll be doing in real life anyways. And with that work comes a sense of appreciation, accomplishment, and gravity-- not entitlement-- for the money. Once they have that money, they will still learn to manage it somehow.

[Ima saver]

I agree, they should have to work to earn the money. I started working at a dress shop when I was 12. Within 3 weeks, they discovered I was better with handling the money than the adults (that was back when you had to count back the change, the cash register did not tell you). So I did the books at the end of the day and made the deposit. (I think they had me bonded)
Even if kids can't get a real job that young, they can babysit or cut grass.

[Diolla]

I moved away from home when I was 17, I didn't know how to cook. A lady at the laundrymat had to show me how to work the machines. I learnt fast especially about money cause I had $420 a month to live on. My ex husband lived at home until we got married, he never did get it.

[Broken Arrow]

Ima, you worked when you were 12 years old?

[PrincessPerky]

Now a days I think a website could be easily run by a 12 year old with the gumption, but that is about it...child labor laws put most jobs out of reach of the young..my 14 year old (almost 15) neighbor is having toruble finding work (not tha she knows what do do with the money if she gets it) because no one wants to hire a kid when you have all the extra rules yet you still have to pay them the same. (oops was that an anti minimum waage thing?)

IMO on allowence I do not give one and have no plans of ginving them one, however if they want more than the gift money I have plans of jobs..not the household chores, those are done cause we all live here we all workk together, but extra jobs (washing windows-doing my work for me) would earn a set amount. so they can earn extra to do extras..at no time do I plan on giving my kids free money.

[ummabdullah]

princess perky that is a fantastic idea thanks

[Lori63]

My son won a $1000 scholarship for writing a paper on financial education, and now it is a mandatory class at our high school starting next year. So many kids aren't taught about balancing a checkbook, credit, etc. Plus today it is so easy to get a credit card young and begin that awful cycle.

[Ima saver]

Yes, I started work at 12. I had to have a work pemit, permission from my principal and my parent. I worked in a dress shop, called Virginia Dare and I was the stock girl. Within a few weeks, they made me the bookkeeper also cause I was good at it. I had an adding machine that was so old you had to pull the handle everytime you punched in the numbers. Oh I made $3 a day working 9 hour days. ($2.91 after tax)

[Saving in So Cal]

I saw an article on one of the news websites about this very topic. Apparently, some enterprising people have developed a summer camp program where kids can learn financial management. I think the article said the website their website was www.campmoney.com, but I haven't checked it out. My daughter (2) is still a bit young and I hope I can impart enough information myself. Still, sometimes kids learn better when they hear information from others. I know when I was a teenager I didn't think my parents knew anything about anything.

[Saving in So Cal]

Sorry. I got the website wrong. It's themoneycamp.com.

[PrincessPerky]

we spend thousands a year not teaching kids algebra, you would think balancing a checkbook would be a bit more important to not teach...