Poverty is a socially and financially disadvantaged position, which can be the result of a mindset centered on victimization and a low level of self-awareness.
The effects of poverty are often compounded by psychologically corrosive environments full of bad schools for children, criminal deviance, and little to no economic opportunities. When it comes to public K-12 education, children are for the most part not taught financial literacy in the early stages of their academic experience.
The unwritten consequences of not having an adequate level of financial literacy are dire. These consequences can be experienced by young people right after they graduate high school or become dropouts. As a parent, raising children to be financially literate can be a major challenge if the parent(s) themselves are not money smart.
Beth Kobliner, a personal finance expert has released a new book called “Make Your Kid a Money Genius (Even if You’re Not).” Kobliner did a recent interview with Reuters News where she gave tidbits of insight on her book and sound financial advice about teaching children how to be financially responsible.
Below is a portion of the transcript of Kobliner’s interview with a Reuters reporter:
Reuters: Is there a time in a child’s life that is best for giving them money lessons?
Kobliner: Start earlier than you think, because by age three they start getting money concepts. Keep your lessons age appropriate. Using anecdotes is helpful, because we all like stories. Show them the numbers with online calculators, and how savings and interest could one day get them to a million dollars.
Reuters: You say that chores should not be tied to money and allowances are not a great teaching tool. Why?
Kobliner: Tying things like making their bed to monetary rewards is a problem. You are paying a child to do things they should be doing anyways, and then they will start negotiating with you all the time. It can end up backfiring for parents. Allowances start with good intentions, but then people tend to get busy and forget about them. I looked into the research, which is all over the map – sometimes allowances help kids with financial decision-making, and sometimes they don’t.
To buy a copy of Beth Kobliner’s new book “Make Your Kid a Money Genius (Even if You’re Not),” please click here.