THERE ARE FOUR BASIC USES OF MONEY
to consider when educating youth, according to Brian Pierson, director of Convergent Wealth Advisors in Potomac. “You can spend money. You can save money. You can earn or invest it. And you can give it away,” he said. These four areas tie into more than teaching money management skills; Pierson suggested introducing them as tools to teach values. “With savings, in the earliest years, I would encourage children to put money in a piggy bank. This is similar to teaching them to put toys away to protect and preserve them,” he said. And, they can learn about giving away money by putting away coins or dollars to give to charities. That teaches them to share. With regard to earning and investing, “Some of children’s first words are ‘mine’ or ‘I want.’ If they are rewarded an ice cream cone for doing something good, they learn to work for what they have. Later they may use a weekly allowance they earned for chores,” said Pierson. Children can be taught self-control in spending habits, as well. “Help them understand what they have. If they want a doll or truck, ask, ‘Do you have money?’ This is a precursor to understanding credit card debt, as well as teaching responsibility,” he said.
EDUCATIONAL WEBSITES CAN ALSO HELP
teach money management skills, according to Maria Tarasuk, pre-K-12 program supervisor for social studies for Montgomery County Public Schools (MCPS). The website usmint.gov offers age-appropriate interactive games for students and teaches concepts about savings and spending. For parents, moneyasyougrow.org provides tips for teaching practical skills tied to understanding and managing money. The information is age specific for youth from 3 to 18, she said. Beyond the online resources, she advised that parents sit down and talk to their children. “For middle school and high school, I suggest going over the family budget so youth see real-world costs and how they impact their families,” said Tarasuk. But she said to keep it simple, sticking, for instance, to short-term spending—and focusing on specific budget areas like entertainment or utilities. “The goal is to teach what it takes to manage finances as a family and to do it in a way that is personal and not as abstract as what they may learn in class.” MCPS fifth-graders focus on career and education choices as part of the social studies curriculum. “Students research job choices online to determine the education necessary for a given job, median income and what skills they have to develop to qualify. This is largely to teach interrelationships between
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Pierson encourages introducing concepts of personal identity and credit scores as youth mature. “They need to know about cybersecurity, to understand they are vulnerable and know how to protect themselves,” he said, noting teenagers should also be aware of the online footprint they create. While there is a long list of what information to protect, as a general rule, “If you would be comfortable showing it on the New York Times Square jumbotron, then you can be comfortable showing it online.”
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transaction when you made the purchase,” he said. Zussman also suggested setting up a custodial account at around age 13 in the parent’s and child’s name. “They can see how the bank is paying them to keep their money there.” Geoffrey Sella, president of SPC Financial Inc. in Rockville, agrees that financial education should begin as early as 5 or 6 with the most basic concepts. “Middle school is where learning should become more structured. And practical education should begin and advance through high school,” said Sella. “These are the years when children have saved or begun working, so they have their own financial resources.” Middle school students, Sella said, can be taught how to balance checking accounts, how to track debit card spending, and about stock and mutual funds. “By high school, once they have had more advanced math, I would challenge students with questions like, ‘How long would it take to pay off a debt if I make minimum payments?’ or, ‘What is the total cost of a purchase if I have to pay interest?’” High school is also a good time to teach them about stocks and bonds and costs associated with mortgages, he said.
See MONEY, 23
BY 13, THEY ARE READY TO LEARN ABOUT CREDIT CARDS; THIS IS WHEN YOUTH CAN REALIZE THOSE
ARE NOT AN ENDLESS STREAM OF MONEY IN PLASTIC FORM.
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SPECIAL PUBLICATION OF THE GAZETTE
February 2014 | Our Children
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