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VOL. 128 | NO. 149 | Thursday, August 01, 2013

Dana and Ray Brandon

What Do Your Kids Know About Money?

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Ray’s Take A survey by T. Rowe Price revealed that 77 percent of parents lie to their kids about money-related issues. According to the National Foundation for Credit Counseling, 44 percent of Americans learned the most about handling money from their parents. The Council for Economic Education disclosed that just 14 states require high school students to take a course in personal finance.

No wonder so many people are drowning in debt, with no savings for the future. They learned very little about handling personal finances before entering a world without the job security and pension funds earlier generations enjoyed. From an early age, kids should be taught that money doesn’t just magically come from an ATM. They need to realize every swipe of a credit card comes with a payment obligation. Charitable giving needs to have a place early on. They need to understand the benefits of saving. After all, at only age 17, many of them will be deciding whether to shoulder enormous debt to attend college.

Parents have multiple opportunities to educate in the course of daily life. Every trip to the supermarket is a lesson in comparison shopping and inflation. Monthly bill paying helps kids understand how you budget. Saving in advance for that vacation is much better than putting it on the card and dealing with it later. You don’t have to share all your family’s finances in detail, but making kids aware that you make conscious decisions about saving, investing, and spending will let them know the same will be expected of them.

An allowance lets them start making those decisions now. Make sure they save a regular portion of that allowance for a specific goal. They’ll figure out pretty fast that the less they save, the longer it will take to reach their goal.

Of course, your example is the biggest teacher of all. Set a good one for your kids to emulate. Just be sure they understand how and why you make it work.

Dana’s Take Kids eventually need to learn about money but first make sure they have experienced work and its innate rewards.

My favorite summer reading for parents is “Cleaning House: A Mom’s Twelve-Month Experiment to Rid Her Home of Youth Entitlement” by Kay Wills Wyma. It’s a humorous and true account of a mother who puts her five kids to work at home.

In the family’s journey she sees the pride that work brings to her kids—after lots of initial pushback. She also faces up to the fact that she was the roadblock to their growth. All of her giving and doing for them prevented them from realizing their strengths and talents as individuals. Whether it’s baking for the family or watering the garden, give your children the gift that keeps on giving: the joy of work.

Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning. His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 89 242 14,959
MORTGAGES 111 255 19,585
FORECLOSURE NOTICES 21 43 3,838
BUILDING PERMITS 153 512 35,842
BANKRUPTCIES 61 182 14,216
BUSINESS LICENSES 18 104 5,095
UTILITY CONNECTIONS 76 246 21,679
MARRIAGE LICENSES 16 75 4,632

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