Thursday, May 29, 2008

Money and Kids

Here is a duo of articles from MSN concerning the growing financial ignorance of Americans. Considering the average American has negative savings, one could wonder about the message that sends our children. One also wonders about the lessons of large amounts of mortgage over-extensions and subsequent foreclosures. The first article mainly looks at ways for the public school system to increase financial acumen; which I applaud, but find lacking. I, for one, know I learned very little about basic economics from public school. I must have picked up my (for lack of a better term), shrewd, outlook on finances from family influences as a child. (I do remember reading a Consumer Reports-type magazine a lot as a youngster and putting my summer earnings in a passbook account.) Anyway, I think it is very important for parents to instill basic financial skills (money management, budgeting, work ethic, time value of money, basic investing concepts, etc.) at an early *yet age appropriate* time. Anything else is doing them a disservice which will have ramifications for their entire life. Money may not buy happiness, but not having it can surely bring a ton of grief.

The second article examines ways several sets of families (with different sets of circumstances) attacked the problem. I think the best solution will be different for everyone. Drawing a balance between working, consuming and saving is a constant battle that most people have to face everyday. Passing on your values to your children will most likely happen whether you intend them to or not; I would argue it is better to shape the discussion on your terms.

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