Help your child develop financial skills

Back-to-School News Distributed 07/11/08

Most children have not learned enough to be financially independent and successful by the time they enter college. Yet, many teenagers are offered credit cards before they even graduate from high school.

“The best way to solve this problem and to set a precedent of saving and financial success is to teach children, starting from a very young age, about money management,” said LSU AgCenter family economist Dr. Jeanette Tucker.

“Integrate school and family experiences to help children learn where money comes from, the value of a dollar and hard work, and about saving and investing,” the economist said.

Tucker says parents can provide the foundation by teaching at home and reinforcing money lessons taught at school.

“Set the example, answer questions and help your children grow into fiscally responsible and successful adults,” she said.

Young people today make financial decisions well before the age their parents did. They are faced with an incredible array of consumer products.

Young children generally don’t understand where money comes from – they are oblivious to the fact that their parents have to go to work every day to earn that money.

“As much as we would like to think our children somehow develop financial management skills through osmosis as they grow older, a number of studies show the poor shape of financial literacy among young people,” Tucker said.

The Jump$tart Coalition for Personal Financial Literacy has done several surveys that show high school seniors fail to grasp the basic principles of credit, insurance and retirement. In fact, Louisiana high school seniors scored only 45.3 percent on a national survey, which is below the dismal national average of 48.3 percent, Tucker said.

Tucker says these results suggest that young people across the nation are making poor financial decisions not to mention building mass amounts of credit card debt.

Carl Surran, editor of Military Money, a magazine to help military families live within their means, suggests the best way for youth to develop wise money management skills is for their parents to teach them about how to manage their money from an early age.

By age 5, children should know which coins are which, how much they are worth and which ones are worth more than others. In primary school, children should be able to count, sort and save change. When they’re in grades 4-6, they should begin learning how to budget and track their spending. (Set up a savings account online or at a bank for them.)

In these elementary grades, they also should learn that some families have more money than others, which means that they budget and spend differently, and that’s why they can’t have every single toy in the toy store.

By middle school and high school, children are old enough to do odd jobs around the house or neighborhood after school and on weekends to save for things they want, like clothing and entertainment, and even begin saving for some college expenses.

Laura Levine of the Jump$tart Coalition said, “By instilling in children a positive attitude toward saving and investing, parents can give their children the confidence they need to manage money wisely throughout their entire lives.”

Another way to reinforce good money habits is to set an example.

“Be a role model. Don’t be materialistic, and stay out of debt,” Surran said, explaining that being a role model includes telling your children what you are doing and why you are doing it.

“Your children will follow your lead, especially if you talk to them about what you’re doing,” Surran said. They may go grocery shopping with you, for example, and see you comparing different products, but they may not know that you’re looking for bargains and sales and sticking to a budget (or understand what a budget is) unless you tell them.

As the new school year starts, Tucker advises adding money management to the lessons you want to teach your children. If you teach and practice money management principles at home, you can help your children develop an understanding, from an early age, of the value of a dollar, where it comes from and how to use one’s limited dollars to meet goals.

“This should help your children to understand what it’s like to be an adult and how to better manage their money,” Tucker said.

For related family economics and consumer topics, click on the Family and Home link on the LSU AgCenter home page at For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.


On the Internet: LSU AgCenter:
Contact: Jeanette Tucker at (225) 578-5398 or
Editor: Mark Claesgens at (225) 578-2939 or

7/10/2008 9:10:45 PM
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