Are we teaching kids to manage money?
Money Management International (MMI), the largest nonprofit credit counseling agency in the nation, released a survey showing that nearly 7 in 10 kids in America are asked to participate in fundraisers on behalf of their school or organization.According to MMI's 2010 Kids and Money Survey, the majority of parents say they take advantage of fundraisers as an opportunity to teach their children financial lessons. Two-thirds of parents say they teach children financial responsibility and basic math skills. Roughly half of parents use fundraisers to teach their children goal setting or basic business skills, and 4 in 10 parents use the opportunity to teach budgeting or charitable giving. School and organization fundraisers offer kids the opportunity to earn money and practice raising funds, but lessons in responsible money management come mostly from parents taking the initiative. For parents wanting to take fundraising lessons a step further, MMI offers some ideas on teaching kids important financial life lessons while fundraising. Teach goal setting. Many fundraisers make teaching goal setting easy because they offer a tiered system of prizes for kids who sell a certain amount of items. Before the fundraiser begins, talk to your child about their goals and help them set a realistic expectation of what they can sell based on the time and resources available. Make sure to explain to them that the funds they raise don't just earn them a prize at the end, but result in the greater prize of benefiting their organization or school. Teach basic math skills. Help your children count back change to customers, total the funds they've raised, and calculate how much they still need to earn in order to reach their goals. Teach basic business skills. Capitalism is the heart of the American economy. Use fundraisers as an opportunity to prune your little entrepreneurs' goal setting, budgeting, and customer service skills. Teach responsibility. Responsibility was the lesson cited as the most taught by parents when it comes to fundraising, probably because responsibility encompasses more than pure financial skills. Remember that a single fundraiser will not teach kids responsibility as much as you setting a consistent example of responsible money management with your family's finances. "Parents are highly influential when it comes to kids learning how to responsibly earn and manage money," says Cate Williams, vice president of financial literacy at MMI. "Parents should use fundraisers as a tool to expand on the financial lessons their children will use for life." Contributed by Money Management International.
********** Published: July 15, 2010 - Volume 9 - Issue 13