How can our children and teens get honest about their money habits?
Dr. Robyn interviews Mr. Sam Renick about teaching children financial literacy
Thank you for joining us here at the Powerful Parent Blog, Mr. Renick. I know you’ve spent a great deal of time working with children on creating a “habit” of earning and spending money wisely through your children’s character “Sammy, the get in the habit, rabbit.” In the spirit of honesty month, you really help them to get “honest “with their money habits. So let’s jump right in so we can help parents teach their children financial literacy, a vital skill everyone should learn, and that we’ve been discussing lately and that we’ve discussed previously on the blog.
What kind of information do you share with children about money?
I spend a lot of time talking with elementary school students sharing with them: why I think saving money is a great habit; how it makes them strong and why habits are important. I let them know the key reason why a habit like saving money is important and powerful is because it has a predictable outcome. In other words, the habit of saving money is reliable. It’s dependable. It’s true. It’s honest.
What happens when children and teens make a habit of saving money?
When we make a habit of saving money we can honestly predict our money will grow. We can also honestly predict: (1) we will be better prepared for emergencies; (2) we will be better positioned to make dreams come true; (3) we will be better prepared to help ourselves and others; (4) we will be better prepared to get what we want and need, when we want and need it; and (5) we will have more choices, freedom, independence and security.
And if we don’t “get honest” with ourselves and make it a habit?
As you can imagine, the opposite it true. If we fail to be honest with ourselves about our money habits and routinely exceed our budgets, spend more than we make, and carry credit debt, then it should not come as a surprise that we will have less freedom, more worries, more stress and more strain on relationships.
What can parents do to help their children develop smart money habits?
- Walk the talk – part 1. I don’t know of anything that’s more honest or “powerful” (to use your word, Dr. Robyn) than leading by example. If you’re already doing a good job, keep it up. If not, start by improving your own understanding of personal finance by reading a good book on the subject. I recommend “The Way to Wealth,” by Benjamin Franklin and “Raising Money Smart Kids,” by Janet Bodnar.
- Walk the talk – part 2. If I could only give a person one piece of advice regarding money it would be this – “pay yourself first.” So, if you are not saving or investing, start. If you are in credit card debt, start systematically paying it off. Get committed to living a debt free life. This will set an excellent example for kids to follow. The web is filled with resources and discussion groups that can help. MSN Money, CNN Money, Yahoo are all good places to begin.
- Talk regularly with kids about money. Studies routinely cite lack of communication between parents and children as a common obstacle to raising money literate kids. Take advantage of natural opportunities to involve kids in money related discussions while shopping, budgeting, making lists, recycling, and paying bills. The more responsibility you can appropriately give them for activities the better. Also be sure to initiate dialogue about dreams, goals, home ownership, investments, etc.
- Start early with books and music. Expose children to books and music about money early and often. Naturally, I recommend our books and music. For older kids, I love Chad Foster’s “Financial Literacy for Teens,” and David Bach’s “The Automatic Millionaire.”
- Instill the habit. Get your child a transparent piggy bank, or better yet create your own family savings bank. Our family did this when we were kids using a Sparklett’s bottle. We all loved it and it really promoted discussion about how to use the money once the bottle was full. When the bank is full take your child to the bank or credit union, start an account and deposit the savings. Review their statements with them regularly.
- Affirmations. Provide kids with fun slogans to repeat. Here are a few of Sammy’s favorites: Saving is a great habit! Saving makes me strong! Change adds up! From every dollar, save a dime! Debt Stinks! I am sure you have some of your favorites. Post the slogans around the house or paint them onto your family savings jar.
- Allowance. Give your child an opportunity to manage money. Be consistent and supportive. Allow kids to make their own decisions and mistakes within reason. For tips on allowance, check out David McCurrach’s “Allowance Magic.” It’s an excellent read.
Thank you, Sam, for being with us today and giving us these very important tips!
Who is Sam Renick and how can you get in touch?
Sam X Renick is an award winning author, songwriter, trainer, social entrepreneur, and co-creator of the children’s character ‘Sammy, the get in the habit rabbit.’ He is also the founder of The It’s a Habit! Company, Inc., a socially conscious publishing and education company dedicated to helping children and families develop good habits, especially saving money. You can learn more about Sammy, Sam, It’s a Habit! and their mission at www.itsahabit.com