Parenting doesn't stop at potty training and teaching the kids how to tie their shoes. As your kids grow up, what is the best way to teach them about personal finance?
At least 15 states require public high schools to offer personal finance courses, but that still leaves plenty of places for lessons on money management to fall through the cracks.
Watching mom and dad pay the bills or balance a checkbook might click for some kids, but even in elementary school students can learn how to handle money through a parent's favorite way to teach: reading with their child. Either way, personal finance lessons are too often left to someone else to figure out.
"I think schools are counting on the families to do that job and the families are counting on the schools to do that job, and it just doesn't get done," said John Daugherty, a CPA in Texas who helped start a sort of children's book club on personal finance in Texas schools.
Figuring that elementary school children are "just on the cusp" to figure out money matters, as Daugherty put it, the Texas Society of CPAs started a financial literacy program in 2008. CPAs are available to read to students in the classroom, and they provide a recommended reading list for preschoolers through 12-year-olds, along with other materials.
It's never too early to start, as Seira Wilson, an editor at Amazon.com books, told WalletPop in an e-mail: "When young children start engaging in imaginary shopping or putting coins in a piggy bank, it's a great opportunity to start talking about money. Currency identification and basic concepts of earning and spending (and the fact that money doesn't grow on trees!) are good starting points for younger children, and for older children, teaching the longer-term benefits of saving, planning, and interest can guide them toward smart financial decision making. Regardless of the age, a key is selecting books that will capture a child's interest and invite further discussion."
There are only so many Arthur books a parent can read on how the aardvark earns an allowance and saves money, before they lose their mind and can quote D.W.'s lines by heart. Here are some good other alternatives that WalletPop found:
It's a six-book boxed set for $40 from personal finance guru Dave Ramsey. Recommended for ages 3-10. I've been reading these to my daughter, who is in first grade, for about a week and she's enjoyed them so much that she has drawn a crayon picture of the main character. That's high praise from a 6-year-old.
Other than a few too many grammatical errors, the books follow a boy named Junior as he learns how to work, save, spend and give. My daughter's favorite is where junior learns to save his allowance for a long-term goal, such as a car or college -- a goal I keep trying to teach her with her weekly allowance and gift money from grandparents.
The Sisters 8
In this series for young readers age 6-10, octuplets must learn to run their own household when their parents disappear. In book 1 "Annie's Adventures," there's a lot on paying bills and writing checks. In book 4 "Jackie's Jokes," the plot revolves around needing to pay income taxes. The softcover books are $4.50.
One Hen: How One Small Loan Made a Big Difference
This picture book by Katie Smith Milway is for grades 2-4, and was recommended to WalletPop by Jeanette Larson, a librarian who teaches children's literature. The book is $12.89 at Amazon.
If your children are familiar with Max and Ruby, they'll want this picture book, by Rosemary Wells. $6.99 on Amazon. Larson also recommends this book, which includes some "bunny money" for kids to spend. The book is for kids in preschool through second grade. In the book, in-charge Ruby and intrepid Max search for a birthday gift for Grandma and learn that we can't always afford the things we want to buy, and money spent in one place can't be spent somewhere else.
This book was also recommended by Amazon's Wilson. "Children at this age are already learning about choices, so it's a natural progression to look at making choices with money," she wrote in an e-mail to WalletPop.
The Money Tree
This book by Dave Hunt, aimed at children up to age 10, examines a topic about which I've always personally wondered: What if everyone had so much money, nobody had to actually work? Recommended by personal finance writer and accountant Angie Mohr, the book talks about a boy inventor who invents a money tree and then starts selling them in his town. People plant their own and eventually, everyone has unlimited amounts of money and buy up all of the things there are to buy. No one makes new things because they already have all the money they need. Soon, there is no food and everyone realizes you can't eat money. A great lesson on basic economics and the value of a buck. It was last published in 1989, but can be found used online for less than $7.
The Zela Wela Kids Build a Bank
This book by Nancy Phillips, also recommended by Mohr, is for children up to age 8 on how to save money and divide it among spending, savings, giving and investing. The $16 book is the first of a series and starts with a piggy bank that kids can make themselves at home.
Federal Reserve comics
You might not think of the Federal Reserve as a place to go for comics, but the federal agency offers free comic books to teach kids, and adults, about money. They look like they should be ordered by a teacher, since up to 34 copies of a book are available to order online. I ordered a copy of "The Story of Foreign Trade and Exchange," although I avoided the anticipation of waiting for the mailman and read a few pages online with a PDF reader. As Naked Retirement author Robert Laura pointed out, they may not be Mad Magazine or a superhero comic, but they're a fun resource for kids and parents. And best of all, they're free.
Alexander, Who Used to Be Rich Last Sunday
This $7 book by Judith Viorst was recommended by Paul Aherns, who runs a literacy education company. It's a great starting point for a discussion about money and tells how a boy gets $1 from his grandparents and thinks he's rich, until he starts spending it on gum and other things a boy loves, like renting a snake.
Joe the Monkey Saves for a Goal
This picture book is another great book about how to save money for a goal, even if it is a short-term goal such as a toy. The book helps distinguish between needs and wants, and making choices.
A Dollar for Penny
A lemonade stand brings in nickels, dimes, even quarters, and they start to add up for young Penny in this $4 book for beginning readers recommended by Wilson, a book editor at Amazon. A Dollar for Penny uses rhyming text and bright illustrations to teach children various denominations and simple money math. An added bonus is that Penny's money is coming from her lemonade stand, which is a good jumping off point to discuss receiving an allowance for chores or other ways of earning money.
Also recommended by Wilson, this $9 book is for grades 4-8. It teaches kids about balancing an account, reading the financial page of a newspaper, and various forms of interest and investments, using accessible language and examples. Sample forms help kids practice recording deposits and withdrawals and learning more complex concepts like risk tolerance. Parents can build on this by taking time to read the financial pages with their child and inviting them to participate in balancing the family checkbook.
A Kid's Guide to Giving
Written by a young adult, this $10 book for grades 7 and up that Wilson recommends demonstrates charitable giving. Kids learn how various charitable organizations function financially, as well as advice for deciding whether to give money, goods, or time. Best of all, this guide highlights the joys of giving and the difference even small amounts can make.
The Millionaire Kids Club
This series of $13 books by WalletPop writer Lynnette Khalfani-Cox teaches kids about the choices they have with money, and how they can do much more with it than spend it.
Not Your Parents' Money Book
Another book by a WalletPop writer -- Jean Chatzky -- is for grade 5 and up. The book is $9.35 at Amazon and is for middle school students and even older teens. It's a good introduction to the world of money for teens about to get a job.
Finance Whiz Kids
Although not yet published, author Darrah Brustein, 27, told WalletPop in a phone interview that she expects to have the series of six storybooks self published and available for sale in January. Meant for second-through fourth-graders, the books use woodland creatures to tell stories about the value of money.
As a child, Brustein was given a plan for her allowance by her parents. She had to save half of it, and if she saved more, it was matched by her parents as a way of teaching her how compound interest works. She also learned about stocks and mutual funds at home, picking funds that the family would buy and track together. She didn't read about personal finance as a child, she learned it first-hand.
"As a kid, I don't remember reading any books about money," she said.
Brustein admits that not every child is so lucky to learn money management skills at home, and says her books are targeted to parents "savvy enough to realize that this is something that will change their child's life."
That's more than enough to ask from a book. Now go out and buy some before Santa Claus gets all of them.
Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
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