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Parents can start talking with their children about money as early as kindergarten to instill good money habits that will last a lifetime. In fact, research shows that a little guidance goes a long way. As few as ten hours spent talking with your children about money improves spending and saving habits in the long run.
The need to improve kids' financial literacy has now been recognized by parents, teachers, and nonprofits working in education and economics and even the federal government. A recent survey showed that less than half of young adults pay off their credit cards every month or have a rainy day fund. The same survey showed that less than one quarter of young adults claim to have a good understanding of how to invest in the stock market or mutual funds.
You don't have to make money lessons special events. There's a lot your kids can learn every day if you let them participate in the many routine financial transactions that take place around them…from grocery shopping to paying the monthly bills. In addition, there are simple games you can play with your children at home to help establish good money habits.
Fortunately, now there's a Web site called, "Common Cents™," sponsored by State Farm (www.sfcom moncents.com) that offers parents compelling ways to help their kids learn how to handle money. Through playing the interactive games and talking about financial lessons at school and at home, kids can learn good money habits.
The Web site is grade-based so there is something for every child-no matter what the age or learning level. Young children can learn to differentiate between wants, such as toys, and needs, such as school supplies. At a slightly older age, kids learn about managing their own money to achieve goals. Middle school children have the chance to run their own fictitious virtual business, which gives them the chance to learn the basics of business budgeting, including income, expense and profit/loss concepts.
High-school-aged kids can learn advanced techniques in long-term money management, investing, saving and risk management. In addition, a parents' guide with at-home activities provides tips on talking to children about everyday money matters from managing an allowance to handling earnings from an after-school job.
"The State Farm 'Common Cents' program is a significant resource that will help advance the field of economic education," says Joseph Aguerrebere, President of the National Board for Professional Teaching Standards. The program was developed with the National Council on Economic Education and National Board Certified Teachers serving as content reviewers.
No matter how you start talking with your kids about money, start early, demonstrate good money habits by your example, and keep an open-door dialogue going in your household about money and smart financial habits…it will go a long way toward helping your children become financially responsible adults.
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