How to help your kids understand money BY BRUCE FARR
M OST PEOPLE WOULD AGREE that these are times of confusion and insecurity about money and finances in general. But even in this perplexity, one thing is certain: Teaching kids about money and personal finance is badly neglected in the U.S. A recent survey conducted by CNBC and Momentive discovered that the majority of parents (83%) say they are responsible for teaching children about money, yet 31% say they never talk to their children about household finances. The same survey revealed that only 15% of parents said they spoke with their children more than once a week about household finances. Money in the digital age Let’s face it, money and finances have become more complicated. In decades past, it was far easier for children to learn and understand the basic concept of monetary transactions. In any number of day-to- day scenarios, they watched their parents purchase a commodity—a loaf of bread, for instance—and then pay for it with cash from their wallet. Now, however, those simple, direct transactions have been replaced by a variety of non-cash payment
functions: credit or debit cards, mobile-phone accounts and apps (e.g., Apple Pay, PayPal, Venmo, etc.). And while these modern-day forms of payment may, in fact, automate and streamline the transactional process for adults, as far as children are concerned, they tend to make it muddier and less understandable.
The same goes for the related concept of saving money and building interest on it. Surrounding the topic of financial transactions is the process of how people obtain and “grow” money. In many families, children may imagine that, at least in their parents’ hands, money is plentiful and available on demand. In less-affluent families, kids might be all-too aware of its short supply. In either case, it becomes incumbent upon parents to introduce their children to the idea of money and the activities that surround it: earning it, accumulating it, saving it and spending it. Kids’ crusader Tom Henske is a dyed-in-the-wool money and finances professional who’s betting his career on the importance
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IN YOUR CORNER ISSUE 13 | 2023
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