While we have all heard of Take Your Kids to Work Day, I’d like to introduce a fairly new concept called Take Your Kids to the Bank!

Where do they think money comes from anyway?!  With everything so instantaneous via the swipe of a card, I wonder if our little mini-me’s grasp the concepts of delayed gratification or working hard to earn money.

teen boy w money

I think of my nephew, a high school senior, and his generation who have been over-exposed to the lifestyles of the ratchet, rich and famous. I’m certain they are not fiscally equipped and have not mastered basic concepts like saving for a long-term goal, budgeting, or investing to build wealth.  Instead, they most likely have learned their current money skills and behaviors from the daily influences of  music and television as well as observing the good and not-so-good money habits of family and friends.

The poor babes are thrown into a system of credit and debt with no defense mechanism and a problematic sense of entitlement believing there will be a safety net protecting them from financial trials and tribulations.    The President’s Advisory Council on Financial Literacy wrote in its 2008 Annual Report to the President: “By almost any measure, today’s school children are ill-equipped to understand personal finance and make their way in the modern financial world. Their rising debt and debt problems, along with their poor inclination to save, substantiate what the test scores show. Meanwhile, most students still graduate from high school without any formal classroom education in personal finance.”

To combat the lack of exposure or poor influences during their teenage years, we must start fiscally equipping our children at a younger age and help them practice smart money habits.  To start, I’ve listed five creative and practical ideas to help develop and raise a more financial literate generation.

1.  Take Your Kid to the Bank.  No matter what age, this could be a fun and interesting field trip.  Many financial institutions have banking programs and accounts especially for children and teenagers.  Use this as an opportunity to establish a relationship with your bank or credit union.  Set an appointment to explore account offerings and help your future millionaire open a savings account.  This could be the beginning of teaching your child the habit of long-term saving.kid at the bank

2.  Pennies 2 Dollars.  Teach your children that pennies saved today will equal dollars tomorrow.  This exercise will teach them the value of money, no matter how small the increment.  While others discount the value of loose change, they can begin collecting coins in a jar and watching their money growThey can also practice counting money as they roll the coins and eventually deposit the funds in their account.

3.  Let’s Go Grocery Shopping.  Incorporate your children in the routine task of grocery shopping.  Make a list, have them search for coupons in mailers or online, and allow them to calculate the savings at the register.  Consider rewarding your super savers by giving half of the money saved to their personal savings account or a 529 Plan.

4. Show Me The Money! The next time your child asks for a $500 gaming console or a $200 pair of sneakers, your response should be, “Show Me The Money!”  I’ve never been a fan of giving kids an allowance for chores they should be doing anyway, like keeping a clean room or taking out the trash.  Instead, I’d prefer to help them devise a savings plan to  earn and accumulate the funds to make a purchase.  Whether through their very own pet sitting service, or purchasing candy for resale to their classmates,  help them develop a business plan and a budget to reach their goal.  After the hard work is done, consider making a deal to pay for 1/2 of the item if they commit to saving or gifting the other half to a worthy cause or charity.

5.  The Gift that Keeps on Giving. In lieu of gifts, or in conjunction with gift giving holidays, consider giving your child a certificate of deposit (CD), a savings bond, or a stock in their favorite brand. Explain how the saving or investment vehicle works, and monitor the long-term growth and valuation to expose them to the concepts of compound interest and appreciating assets.  For savings bonds, visit http://www.treasurydirect.gov/readysavegrow/start_saving/gift_bonds.htm.  For gifting stock, one of my favorite resources is www.oneshare.com.

We want to hear from you.  What are some other activities or ideas to teach your kids or teenagers basic money skills?