Starting in elementary school, my sister and I got a dollar a week in allowance. It may not seem like much now but back then it was enough for two Spider-man comics or four Hershey's bars or a large handful of Bazooka Joe bubble gum. I know because between us, my sister was the saver. There was always something that I "needed." My allowance was spent as soon as it was in hand.
Outside of being told to save it or hearing my father complain about how quickly we run through it, money wasn't spoken about in our house. It wasn't until college when it actually became something seriously discussed. But by then it was too late for me. I had already developed a habit of "need." And that habit would go unchecked even after college when I feeling the weight of my student loans and credit card bills.
I had been living well above my means and it was my sister, the saver, who bailed me out. I don't want to think about what would have happened if things turned out differently. What if my sister had "needs" too? What if she couldn't bail me out? There were alternatives but none that wouldn't have left a lasting scar on my credit report (impacting my ability to make certain positive decisions about the direction my life would take). Given a second chance to get things right, I decided then that I needed to reevaluate my "needs."
My eldest is only starting to learn about money. He is learning to identify the values of different coins and how one coin can be broken down into other coins (e.g. a quarter can be two dimes and a nickel). As a teacher, the act of breaking one value down into smaller values is a "real" hands on way of teaching number sense. As a parent, it is a nice start to frank ongoing conversations about money and its role in life. While you don't want to teach greed or miserly behavior, you also don't want to ignore lessons on budgeting and financial responsibility. Lessons that should not be left until times of fiscal hardship to be taught.
The lead article in the February issue of the ASCD's Education Update (Volume 51 Number 2) stated financial literacy as an "imperative in economic hard times." It described the initiatives some states are taking to provide their students with "strategies to help their students deal with with the real economic world so that it doesn't overwhelm them after they graduate."
While I am disheartened that the program I am associated with was not mentioned in the article, I am happy that personal finance education has hit the mainstream. Perhaps I am being overly optimistic but dedicating the lead story in its Education Update signifies that the ASCD and like organizations are ready to bring the current niche subject of financial education into the mainstream classroom (potentially, as a regular part of the school day).
Kiplinger editor, Janet Bodnar also writes its money advice column for parents, "Raising Money Smart Kids." While I have not agreed with all of her advice, I do agree with her top six suggestions: "Start early. Start small. Keep it simple. Make it fun. Set a goal. And reward your children's efforts."
As teachers, the challenge of "starting early" is integrating essential life skills in saving into the growing regimen of high stakes tests. Any program in financial literacy that is adopted would need to provide opportunities for students to practice and hone those academic skills which are rigorously tested.
As parents, the challenge of "starting early" is one of routine. How do we insure our children remember the importance of saving without seeming like we are nagging (potentially causing the opposite effect)? We also have to readily identify opportunities for our children to practice the money skills we teach them.
My wife and I have taken tiny steps to look for opportunities for our eldest to practice "money skills." Simple things like estimating the change he should get back when he purchases something at the store. We have been trying to implement allowance based on chores and homework. The challenge remains instilling it as habit. It is easy enough when the waters are calm but given a particularly hectic day or two, it can take weeks before we get ourselves back on track. However, we keep trying.
There are a lot of financial literacy materials out there for us to use. In addition to most banks and financial institutions having educational materials, there are also a number of not-for-profit organizations and foundations providing teaching resources. Among them, the non-profit organization, Jump$tart Coalition for Personal Financial Literacy. They provide a "clearinghouse" of educational resources and reports on the state of financial literacy in the US.
I strongly believe that the overwhelming number of choices we have in financial literacy materials is a good thing. However, I also believe that the most effective resources at our disposal is good old common sense, establishing effective money habits, and a cliche here and there; "If it sounds too good to be true," "You don't get something for nothing," "Neither a borrower or a lender be," and so on.