Can money buy you happiness? That age-old question might never be fully answered, but it's without a doubt that sound financial skills give kids a foundation for avoiding the sure unhappiness caused by fiscal insecurity later in life. While this formal notification of loan denial might be a bit of an overkill for a six-year-old asking for an advance on his allowance, it is undeniably important to teach kids about money matters.
Luckily, people like Beth Kobliner, bestselling author and member of the President's Advisory Council on Financial Capability, have made this beyond easy for parents. With help from other experts, she created Money as You Grow, a government-recommended website that provides age-appropriate fiscal lessons for kids. From as young as three, Kobliner encourages teaching children about the basics, such as saving and spending. And it's important to start early, as evidence shows that habits regarding money are formed by the tender age of seven.
For preschoolers, Money as You Grow suggest you break it down into four lessons: needing money to buy things, earning money by working, waiting before you can buy something you want and learning the difference between things you want and things you need. Kobliner points out that waiting to buy something you want "is a hard concept for people of all ages to learn," but mastering the art of delayed gratification is a good predictor of success. Because of this common stumbling block to financial health, it's better to start early.
As children age, the lessons on Money as You Grow also develop, covering topics such as making good choices, keeping your financial information private, saving and accruing interest and the problems with credit cards, among others. Talking with children about common financial pitfalls before they happen, such as sliding into credit card debt and wracking up unsustainable amounts of student loan debt, can help them avoid it in the future.
"Dear [name redacted],
We regret to inform you at this time that we are unable to provide a loan in the amount requested of $20.00. After reviewing your account, we have find [sic] you have insufficient funds, and a history of not doing your chores.
Furthermore, over $80.00 has been spent on discretionary entertainment expenses since Christmas. This is an unsustainable amount of expenditure, and we cannot further compound the problem by financially assisting with occurring further debt at this point.
If you would like to refute this decision, you can contact our complaint department at 1-314-[mom's number]. Our dispute manager at this number may be able to persuade us to reverse our decision.
Thank you for choosing DAD Savings and Loan, we appreciate the chance to serve your financial needs.
CEO, DAD S&L
St. Louis, MO 63126"
Via: Jumble Joy