Originally published: Feb. 24, 2023 (distributed by Andrews McMeel Syndication)
If you are a parent or grandparent, how important is it to you to be a positive influence in the lives of young ones when it comes to personal finances?
Financial literacy experts tell us that Americans don't have basic financial literacy skills. Is there something you can do with your children (or grandchildren) to help them learn sound financial decision-making?
It doesn't take much to make a difference. The starting point can be as simple as reading a book together. There are several choices for children, even for those as young as 3.
"My First Money Book" by Reggie Nelson is a colorful 42-page guide for parents and children covering "saving, spending, sharing and investing."
"Money Ninja" and "Investor Ninja," both by Mary Nhin, are two titles whose goal is to raise financially savvy children. I can't argue with that mission. Struggles considered include: "I wish I could buy the new game, but my mom won't give me the money. And, I already spent my allowance on library fines."
Or what about this exchange in "The Steady Road to a Million Dollars," by Brad R Biagi, about a real kid who started learning at age 5.
"Bradley, how much money is this?"
"If you put this in your piggy bank and let it sit overnight, how much will it be tomorrow?"
"It will still be $25, Daddy."
"And after a month?"
"It will still be $25 Daddy: It can't change to another number in my piggy bank."
If you read that dialogue, it easily leads to questions you and your child or grandchild can consider, leading to a greater understanding of saving and the use of funds. It can also lead to an allowance or earning money for doing chores.
What about a book authored by someone who started investing at the age of 9? "Early Bird: The Power of Investing Young" by Maya Peterson (and co-authored by her brother Soren Peterson) includes interviews with experienced investors. I like that approach, since one learns best from role models.
A book for 8- to 12-year-olds is Walter Andal's "Finance 101 for Kids" (and its sequel, "Finance 102 for Kids"). The book discusses how the stock market works, including how you make money in the market, as well as the risk of losing money on your investment. Also discussed are the power of money, saving money and dealing with credit.
From my perspective, the power of compound interest cannot be stressed enough. That's a lesson that is missed on young adults who don't want to think about building a nest egg for retirement until much, uch later in life.
This book for kids ages 10 and up helps: "How to Turn $100 Into $1,000,000: Earn! Invest! Save!" by James McKenna, Jeannine Glista and Matt Fontaine. McKenna and Glista are two of the co-creators of Biz Kid$, a public television series and a national financial literacy initiative (tinyurl.com/2p9fu2x2).
The point is this: The earlier you start earning and saving, the more time you'll have to grow your money. (You need to have time for compounding to work.)
Frustrated with the fact his 13-year-old was not learning anything about money and investing in school, lawyer and investor David Bianchi decided to teach his son himself. He ended up with 100 short topics, which in turn became the basis for "Blue Chip Kids: What Every Child (and Parent) Should Know About Money, Investing, and the Stock Market."
Resources are abundant, as are ways to make an impact. For a young child, I prefer starting with a trip to the library to search for books together.
Exploring a few books before making a decision on what to read takes the exercise to a new level. That's an adventure in itself, well worth the time and effort. Believe me, the child will remember those experiences later in life -- and perhaps become a role model himself or herself as the years go by.
How do you engage your children and grandchildren on investing topics? Let me know through this survey (tinyurl.com/33t9hv3v), or write to me at email@example.com.
To read Julie Jason's books, go to: https://juliejason.com/author/julies-books.