Friday, February 10, 2012

Book Review: Raising Financially Fit Kids

Raising Financially Fit Kids by Joline Godfrey

This informative and helpful book provides nearly all you would need as a curriculum of Personal Finance for your children and could be extremely useful. The author gives ten basic money skills (like "how to save" and "how to handle credit"). A child's "financial internship" is then divided into stages: ages 5-8, 9-12, 13-15 and 16-18. For each stage, the author provides specific ideas, books, movies and progressively more difficult tasks focused on each of the skills. She encourages parents to pick and choose activities appropriate to the family and the child, but to provide an opportunity for each child to become proficient in each money skill.

The book clearly states that money is a tool, not an end in itself. It is good only insofar as we use it to provide for our needs, some of our wants and to contribute to alleviating the sufferings or needs of others. I thought the author's attitude was sensible and generous.

Ms. Godfrey's book can help a family determine their own financial goals and then devise a plan to teach their children the skills to meet those goals, to make the family's financial plans transparent as children grow. I love the number of ideas. I love the number of books and movies sited to provide not only information, but opportunities for discussions. I think homeschooling families can take the ideas in this book and create a complete financial education plan, including activities that could be incorporated into a coop.

The ideas in the book are nearly always appropriate for families of little means as well as those of great wealth (though one chapter is entirely focused on children in wealthy families). One of her ideas is to gather a team of adults to help teach your children. I can see how this could be useful for us as there is not a single entrepreneurial bone in my body. I have no desire to start a business or encourage my children to do so, but I do recognize the value in knowing such things.

We've already made a change in our money management training. First Son received a small increase in his allowance. He now received $4 each week: $2 to spend (which he saves very well for large purchases), $1 to save, $0.50 to tithe at church and $0.50 for another charity. He's now responsible for putting his church tithe in an envelope and carrying it to church (or giving it to Kansas Dad, which is what I do with our tithe and First Daughter's tithe). Because it's now going from my hands to his hands to the envelope, it should be more clear to him that he's giving his own money at Mass each week. When he has about $20 saved in his charity jar, we'll help him research some charities and choose one for a donation. We're not sure what's going to happen with the save jar. Perhaps we'll open a savings account for him, or let him put it in the one his Papa opened for him, or perhaps we'll let him invest that money in some life stock of his own. The other big change is that all money he receives (for gifts, for extra chores around the house or at a grandparent's house) will be divided up between the jars. (Previously, any non-allowance money went right to spending.)

I'm also going to include financial literacy as one of our subjects each year. We'll probably do only a little, perhaps one or two lessons each term, but it will be in our plans and that will make it a priority.

My only complaint about this book is the design. I don't love the cover, though the pictures of children and young adults inside seem well done. Most difficult are the pages. The pages are thick, so they'll hold up well, but very reflective. I often found it difficult to read the words.

I can't say whether this is the best book to guide parents through teaching financial literacy to children, because I have only read a couple, but I believe it must be one of the best. It's certainly worth a bit of your time. It would be appropriate for parents, grandparents and any other adults who have children in their lives.

5 comments:

  1. Interesting post. I was just thinking about this recently actually, as Gemma has just within the past month or so begun to have a concept of money and buying things and such. We do money in a jar for a charity all thru lent, although that is just coins that I have and have them put in. The only money she gets now is gift money for bdays etc. and up until this point we have just put that money in the bank. I wish she had shown her interest in money just a bit before her birthday, I would have handled birthday money very differently this year...

    When did you start giving your kids allowance? I really do want to teach Gemma (and our other kids) about money. I grew up with a pretty good concept of budgeting, etc. but my hubby's parents never really talked to them about money at all. Thankfully my hubby is entrepreneurial minded and a saver, so we mesh well together, but he too has said he definitely wants to give our kids more of a foundation when it comes to finance, etc.

    Whew! That got long-winded. Sorry for all the comments lately, you just keep doing posts that really interest me. ;-D So thanks for more food-for-thought, if nothing else!

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  2. Monica, We started giving First Son an allowance when he turned six, but quickly added some for First Daughter and then Second Daughter. Once they saw him with money to spend, they wanted in. Until now, my favorite part of the allowance was having an easy answer when they asked to buy stuff ("You're more than welcome to buy that with your own money."). I've also used it when they ask to eat out. First Son loves Taco Bell. When I start to get frustrated with him asking when we'll go again (which we do about twice a year), I tell him he could take us out to eat there anytime he wants.

    With the girls (5 and 3), we just give them $1 a week to spend and $0.50 to put in the collection basket. Their money pretty much piles up in their boxes until we take them to a store when they spend everything they have. We only take them every three or four months, so they still end up with a pretty good amount to spend. I guess for them we're focused on thinking about what money can buy as they debate their purchases.

    We do try to let them buy whatever they want without comment, as long as it's safe and not immoral or something. I will warn them if I think something is not going to last long, but the choice is theirs. The best way to learn such things are not worth the money is to buy one or two.

    We are also interested in giving a more formal education in money matters than either of our parents gave us. The author was very relaxed about the first five years, though, encouraging readers to let their kids focus on learning things like talking and motor skills. Next year, First Daughter will be six, and I think we'll focus on counting money and reading some picture books together. (Picture books are part of the answer to every problem, you know.)

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  3. Thanks for the comment back. Aaron and I were talking about this over lunch some. Gemma has started asking for things at the store now occasionally and I feel badly always telling her no, but she really has no money of her own now, and some of her requests are very reasonable. Things she *needs* (which is obviously what Aaron and I always make sure she has) not necessarily, but reasonable wants that aren't outrageously selfish or expensive, or weird over-the-top requests, yes. Like chapstick or stickers. Things I'm completely unopposed to, I just don't want to be set the precedent of buying things for her everytime she asks. So it's hard.

    We do give Gemma (and Kolbe now, as he as expressed the want to do this very clearly) money to put in the collection basket each week.

    And every once in awhile they "play money" and we talk about the different coins. For our Lenten Charity jar this year I got a roll each of quarters, nickels, dimes and pennies as I thought besides the charitable aspect, their could be some great learning opportunities there each day.

    Maybe I need to go ahead and start an allowance with her. I don't know... Or maybe I should just quit going to the store with the kids (which will probably happen anyways once #3 arrives this summer) and that would solve all kinds of problems. ;-D

    Again, like I said, thanx for all the great food-for-thought lately.

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  4. Monica, it is a lot easier that the kids don't go to the store with us. They rarely have the opportunity to ask for anything. Gemma is still pretty young to understand the value of money compared to the things she might want to buy. Second Daughter doesn't really get it at all. She's as likely to ask for a bike as stickers. So we have to say often that she doesn't have enough money for something.

    Now that I think about it, Second Daughter doesn't get a tithe for church. She puts our family envelope in the basket. It saves us $0.50 a week. It's nice that it's a small way they really can participate at Mass. The offering and the sign of peace are probably their favorites.

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  5. Yeah, you've got a really good point about that. Like I said, once baby 3 comes I think our habits will change a lot when it comes to going to the store. Aaron does all the grocery store, but I still get out fairly regularly with the kids for this or that, stuff at Target and Walmart, other items for our home education etc. from the Catholic store or Hobby Lobby or whatnot, but as our family grows I know I will be finding time to do those things on my own when Aaron can be with the kids, rather than dragging a whole entourage of little people around on errands with me. The difference from the time it took with one to two (carseats, jackets, etc. etc. etc.) was just amazing. The more we have, the less I can see even being motivated to bother.

    Thanks for the nice conversation though, it's always good to be thinking about this stuff.

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