Talking to Your Kids About Money

by Jennifer Buckmire
Member, Chapel Hill/Carrboro Mothers Club

At our 7th August 2007 evening meeting, we got a lesson in dollars and sense! Maureen Dolan Rosen, president of the Cash Management Connection, discussed the positives of saving money, talking to your kids about money, and the pitfalls of credit card debt. A summary of her advice is below; but, first, a little background on our $-talk expert.

Maureen has an extensive background in human resources, ran her own HR consulting firm, served on the Advisory Board of the Small Business Technology Development Center Regional Office in Raleigh, NC, from 2001 through 2003, and is a current board member with the Chapel Hill-Carrboro YMCA. In 2001, she realized there were no tools on the market with which to teach her children about managing money, so she developed and began publishing her own! KIDSCASH workbooks were born, then came MYCASH (for adults); even a 10-section curriculum for teaching children and teens how to take care of their money. Maureen stays busy giving free seminars to groups of children as young as eight, and to parents, caregivers, and teachers of all ages, in all types of settings. She also publishes and distributes a newsletter, 'Ca$hTalk,' which is full of stories, resources and tips for money management.

Now, for Maureen's 2 cents and tidbits:

• Don't be scared to talk about money with your kids!
• Teaching kids to be prudent with their money is the best gift you can give!
• Allowances are a great way to teach your children about and give them practice with money management. By the age of 8, most kids can handle that responsibility, although some parents start when the child is around age 6.
• You can start talking about money as early as age 3 or 4: discussing the value of coins; getting a piggy bank; discussing saving. At the grocery store you can comparison shop and discuss with your child(ren) why you buy one brand of food vs. another. Use the 'unit pricing' on the shelves to talk about value and better buys. As your kid(s) get older you can ramp up their involvement and level of difficulty in helping to find bargains.
• Encourage your kids to save a portion of any money they get.
• Don't dictate: give options re: how to spend their money (even as young as age 5-6) and allow them to make their own mistakes. AND, don't bail them out!
• Be a good role model for your children.
• DO NOT GIVE CREDIT CARDS TO YOUR KIDS! (Maureen's personal soapbox). Rent the documentary called "Maxed Out," and show it to and discuss it with anyone getting ready to leave for college. It delves into the dirty dealings and predatory practices of credit card companies.
• Scary example of credit card use/debt: If you rack up a $1,000.00 balance at the typical 18% interest rate + taxes, you will need 17 years to pay it off if you only make the minimal payment each month. It rounds out to ~$4,000 paid back after all is said and done!
• Did you know that if at age 20, you save $50/month, that by age 60 you will have $1 million in savings??!!
• Always pay yourself first. A good guideline is to save 10 percent of everything you earn.

Maureen Dolan Rosen granted permission for all information reprinted in this article.

Posted September 2007