Believe it or not, there’s a great place on your child’s book shelf for financial education books for kids. Financial literacy in the US and most other countries is hugely lacking so it’s important to make sure your kids get a sound foundation in saving and investing for their future.
Here are three great financial education books for kids. Please let us know if you know of others we can add to the list.
The first two are story books with lessons for 6-9 and the colloring book for any one who loves to color, including adults!
If you’re interested in purchasing the coloring book in bulk or having it customized with your logo, call us at 805-957-1024.
Happy reading…
Elisabeth…Your Financial Literacy Lady
p.s. IF you haven’t signed you son or daughter up for our summer Camp Millionaire (ages 10-14) or Moving Out! for Teens (ages 14-19) programs, now’s the time to do it!
“A penny saved is a penny earned.” – Benjamin Franklin
The great Benjamin Franklin was a wise man, indeed. If he were alive today, he might very well say that an online savings account is the perfect way to teach teens about fiscal responsibility. Teaching teens how to earn and save their money will pay off in the long run as they grow into financially responsible young adults.
Teenagers have special financial needs, but most importantly, they need to learn that Mom and Dad aren’t made of money. Parents are often the first source of information when it comes to money management, so it is important to start early. Here are some great tips for parents hoping to help their kids learn more about managing their money – and to get started, click here for more information.
Why teens should have a savings account
Unfortunately, many adults don’t know how to manage their money simply because no one ever taught them when they were young that the perfect gateway to financial responsibility is a savings account. Because these accounts allow only a certain number of withdrawals every month, teens are encouraged to spend less and save more. Additionally, they can watch their money grow with the interest earned each month; however, these are only the basic reasons why every teen should have a savings account.
Depositing money and balancing the register is only the first step toward developing a strong base in personal finance. The fee structure of a savings account is important for a teen to learn, the consequences of making withdrawals and overdrawing the account (if allowed) should be realized. Though the fees may seem simple to understand, they can play an integral role in helping teens understand the idea of keeping to a budget.
Choosing a savings account for any teen
With so many different types of savings accounts out there, choosing the right one for a teenager can be a bit of a challenge. Generally speaking a good savings account will have no minimum balance requirement and no monthly fees, unless the account has been overdrawn. When possible, securing a savings account with the highest interest rate is always beneficial.
Many banks actually offer savings accounts designed specially for teenagers. They are either low-cost or free to operate, and offer a number of perks as well as educational opportunities for kids and their parents. Just remember, for account holders under the age of 18 years, parents must co-sign on the account and accept financial responsibility for any missed payments, fees, or overdrafts.
Today, most teens probably know more about the Internet than their parents, which is why an online savings account might actually be the best bet. These accounts can be accessed from any computer, smartphone, or mobile device and may appeal to today’s tech savvy teen. With online account access, teens will be able to watch their money grow, manage the account, and view transactions in real time.
So, if you have a teen and you’re wondering why type of account(s) to set up for them, consider an online account and let teens learn how to manage their money by doing what teens do best…playing on the computer!
I get emails all of the time from what appear to be stressed, tired human beings asking some very simple, yet serious, questions about money and financial freedom. This morning I got the following message and just had to share it and respond here on the blog.
Question from Grace…
How do you create financial freedom when you are at zeo: having a job, yes, but the salary is too little to save. How do I ever get to be financially free in this state?
Grace…great question and thanks for asking it. Let me give you the simple answer that I’m sure you’ve read before:
You have to either make more money than you spend (increase your income), spend less money than you make (decrease your spending) or perferably, embark on a combination of the two.
Since I don’t know from your email, where you are writing from, I don’t know if you have any other disadvantages that are holding you back, like freedoms, or lack of freedoms in other countries, or physical limitations, etc.
Let’s dig a little deeper into answers (there are many) to this allusive question based on the assumption that you don’t have any serious limitations that I should know about.
Part I: Financial Freedom – Think It First
Financial Freedom Begins In Your Mind
If you’ve realized you don’t know what you need to know about money and investing in order to create financial freedom for yourself and your family, you’ve no doubt started to find ways to teach yourself about this seemingly allusive stuff that in so many ways dictates our experience of life.
But it’s more than just the knowledge that you need…it’s the right thoughts, the right financial beliefs and the right attitudes about money and wealth that either support your journey to financial freedom or keep you away from it your whole life…and often never figure it out.
I’ve read this book four times already and plan to read it again soon. I learn more myself and money each time I read it and I’ve been TEACHING this stuff for years!
Here are some other great financial belief system books that are great:
Let’s just stay that becoming financially free is a step by step process starting with understanding your belief systems. When you start understanding what drives this aspect of your financial life, you can start making changes in your thoughts, beliefs and attitudes about money and wealth and you’ll notice things begin to shift in your life financially.
So if you’re struggling with money and how to create this peaceful state of financial freedom, start at the top…of your head that is. Read the books above and you’re financial situation can’t not change.
Everywhere you look, companies are still offering people the opportunity to be irresponsible with their money. Even PayPal has gotten into the ‘credit’ game recently with their new BillMeLater service…but don’t do it and here’s why.
Painful Credit Lessons Don’t Last Long
The past several years has brought a huge percentage of Americans to their knees financially. The continued wrongful use of credit cards and the ‘mortgage’ situation should have taught us a thing or two about buying ‘stuff’ with other people’s money, but no…we’re still tempted and enamored by the idea that we can have all the ‘stuff’ we want today and pay for it tomorrow.
STOP THINKING THIS! Thinking that you can pay for things later is what keeps getting this country into the problems it’s in. In the US government only spent money it had, we would NOT be in debt…we couldn’t be.
Think Like People Who HAVE Money
Here’s the thing…
Wealthy, financially free, rich people are wealth, financially free and rich because they practice some very important, and simple, time-tested financial principles. Principles like Pay Yourself First, Put Your Money To Work for You and others.
Paying for stuff with other people’s money isn’t one of those principles.
Question: if you want to learn how to play the flute, do you learn from a concert flutist or a soccer player? I know…stupid question, huh. The fact is, if you want to have money, you MUST do what people who have money do.
In all of our financial literacy programs, we teach participants that the ONLY reason to borrow money (and that’s what using a credit card is) is if you have the opportunity to MAKE money by using it. (Caveat…I’m not talking about an emergency like a medical expense or something life-threatening.)
In other words, borrow money to invest in assets that are going to MAKE you money like rental property, parking lot, a business and other assets that have the opportunity to create a cash flow for you.
I would venture to say that most things paid through PayPal are NOT asset-like!
Financial Principles You Can Thrive By
Two of our Creative Wealth Principles (aka…Rules to The Money Game) that go hand in hand with this financial strategy are as follows:
Only Borrow Money When It’s Going To Make You Money
We’ve already discussed this one…
If You Can’t Afford To Pay Cash For It, You Can’t Afford It At All
This principle is quite simple. If you don’t have the cash, i.e., REAL MONEY, to pay for something right now, you can’t afford it. This is where we need to go back to saving up for things we want to buy. Something happened to the whole idea of delayed gratification years ago when credit cards were introduced. People no longer had to save up for purchases…they just went and bought whatever they wanted…and this was the beginning of what has become a huge issue for a huge percentage of Americans.
What You Can Do
The most important thing you can do is to learn a little self-control and the way you do that is have a big enough WHY for not buying everything you think you want or need.
In other words, learn to tell yourself, “NO, because I’d rather….. (fill in the blank).
Here’s an example of what I’m talking about.
Imagine you’re in your favorite clothing store and you see a shirt that you just have to have. Instead of buying the shirt on impulse, you say to yourself, “Self, I’m not going to buy that shirt because I’d rather feel more secure with an extra $60 in my savings account this month.”
We must learn to look further into the future when it comes to making personal decisions in regard to money, health, relationships. We all want things right now, whether it’s a new iPhone, piece of cheesecake or hugs and kisses. Learning how to best assert personal self-control, i.e., self-disciple, gives you the tools to create the future you keep saying you want for yourself.
WealthWork*
Answer the following sentences and then go look into the nearest mirror and say them to yourself. You won’t believe how powerful you’ll feel.
“I’m not going to buy this today because I’d rather experience……”
“I’m not going to eat this today because I’d rather experience……”
“I’m not going to say _______ to ________ because I’d rather create _________ type of relationship for the long term.”
And feel free to make up a few of your own.
As always, hope this information was valuable. Please leave your comments below and please share this post on your Facebook wall to share with your friends.
Elisabeth
The Financial Literacy Lady
Just helping you think differently about money www.ElisabethDonati.com
* WealthWork is what wealthy people do in their spare time to create wealth for themselves.
Plastic…it’s everywhere. We have come to accept its insidious use in our lives…but should we?
If you think I’m talking about plastic bags or plastic food containers or the plastic used in almost every toy known to man, think again.
Nope…I’m talking about plastic money!
If you listen to most financial experts they’ll tell you you must get a credit card to start building your credit. Why is that do you suppose?
So you can borrow money later! In other words, you can more easily use ‘other people’s money’.
Now there may be reasons to use other people’s money (OPM) in the future, but the fact that kids and adults are indoctrinated into this culture of using credit cards to pay for things from the time they go into college or leave home, tells you where our ‘money minds’ are.
We are focused on the wrong side of this transaction. Instead of thinking about, and preparing to, borrow other people’s money, we should be thinking about how we can ‘loan’ our time, energy and money out to others to create assets that then produce a cash flow for us. But more about this another time.
What I’m talking about in this short article is something much more dangerous and risky than other types of plastic. Read on…
Credit Cards and Technology
The newest technology known as RFID (radio frequency identification) isn’t nearly as cool as the credit card companies might have led you to believe. Watch this video to learn how YOU could be vulnerable and have your credit card information stolen from you without even taking your new card out of your wallet or purse. Kinda scary if you ask me!
OK, now that you know, go check your wallet to see if your cards are at risk. If they are, either cover them or call your bank to have new credit/debit cards issued with out this new technology.
There are, however, several challenges with financial education in schools:
Schools are gears toward getting students to be proficient in subjects they are tested in: math, reading, writing, science, etc., NOT subjects that are classified as electives.
The main reason schools are gears toward tests and these subjects is that they aren’t so much looking at what helps create a successful human being but are focused on getting a certain percentage of their students into college because most schools, like most adults, are brainwashed into believing that college is THE way to success rather than simply A way.
Schools also focus on the tested subjects because most of the time, schools funding is tied to how well their students do on those tests.
When a school or individual teacher makes a commitment to start teaching their students about money, the programs that are ‘affordable’ are only not the best financial education program available and you do get what you pay for.
Free financial education programs, most made available by financial institutions, are boring…they use boring workbooks, boring curriculums, aren’t taught in a relevant way (i.e., students have no connection with the material) and well, all in all, this makes the programs pretty ineffective. Here’s an interesting article from Kiplinger that reflects the point.
Let’s say that schools start really making a place for financial education in their classrooms…for whatever reason: legislation, demand by parents, demand by students, new goals by the administration…it’s going to take it all.
Teachers and administration will go out and start looking for the best financial program they can find.
And if cost is an issue, which it so often is, they end up searching for free…and this is what they get…a curriculum focused on a lot of the right things and one that is completely void of lessons that teach kids the real truth…what it takes to become financially free in this day and age.
This is what they’ll study, and generally be bored studying it:
Budgeting: The lesson is generally that you must spend less than you make and live within your means rather than simply planning your spending. There is a subtle message of ‘not enough’ when teaching budgeting. In Camp Millionaire and The Money Game we teach kids that ‘a budget is a tool to make their dreams come true’ rather than the idea that they always must be on a diet with their money.
Saving: The lessons usually revolve the idea that we have short term and long term goals though the long term goals are often college and buying a car. We teach kids that they have two Savings Jars; one for saving up to buy something (for cash…not borrowing to buy it) and one for what we call “just in cases.” Savings in Camp Millionaire isn’t tied to different types of goals but what you use the money for instead.
Credit Score: The lesson is that they WILL borrow money so they better make sure they have a great score when they go to buy it rather than teaching them that borrowing money isn’t mandatory in life. But you’d hardly know that with the way everything is offered credit from about every type of company imaginable these days. Let’s teach kids that they don’t have to ever borrow to buy something if they don’t want to (and then teach them how…I’ll get to that in a second).
Debt: The lesson is often to learn to use credit cards wisely rather than not using them at all. Some of the richest people in the world use debit cards because they don’t want to ever use other people’s money the wrong way. Then again, others use their credit cards to accumulate points to use for mileage, trips, bonus products and more. A better lesson is learning the difference between Good Debt (debt other people pay down…using from investing in assets) and Bad Debt (debt YOU pay down…usually from buying piddlyjunk, aka liabilities).
Miscellaneous lessons including insurance, buying cars, saving for college, borrowing money for college (yikes), retirement accounts like IRAs, and a few other things.
Financial Literacy – The Critical Piece That Gets Left Out
Let me ask you a question…
Why do you want your kids to learn about money in the first place?
So they’ll end up with plenty/lots of money when they’re older?
So they’ll be able to retire when they’re older?
So they’ll be able to provide for themselves and their families?
So they’ll never move home because they’re in debt up to their eyebrows?
All of the above?
Financial Literacy Education Must Teach Students How To Invest
It’s a rare financial literacy curriculum that teaches investing as one of the core principles…but without it, it’s like teaching kids how to brush their teeth but never showing them how to use the dental floss…or worse.
Investing is putting money (or time or resources) into something with the expectation of some type of gain from that.
Why is the idea of investing so critical? Because it’s darn near impossible for people to ‘save’ their way to retirement…that is IF you want to wait until you’re pretty old to retire.
The idea behind investing is learning to send your money to work in addition to, and then instead of, you!
Investing means you put money into real estate so you can live on the rental income, put money into the stock market so you can live dividends and interest and put money into business ventures (yours and other people’s) so you have profit cash flow from continued profits to live on.
Learning to invest wisely takes time. The challenge is that everyone on the planet has learned different things about investing…including developing different beliefs about different types of investing.
For example:
Some adults grew up with parents who invested in real estate and did well so that’s their focus.
Other adults grew up with parents who lost a ton of money in real estate and wouldn’t invest in it if it were the only way to make their money grow.
Some adults grew up with parents who taught them about the stock market and made great investments.
Others grew up with parents and/or grandparents who constantly said, “the stock market is too risky.”
Some adults grew up with parents who were entrepreneurs, experienced the freedom of being able to call their own shots and create their own lifestyles and wouldn’t dream of getting a job.
Others grew up with parents who always had jobs and talked perpetually about the securing of going to college and getting a good secure job. We all know where that has gotten our population.
What’s the point?
The point is that the world we live in has changed. Kids need to learn the difference between Earning money and Making money.
Getting a job isn’t easy and isn’t necessarily the most safe and secure thing to do.
Saving alone is almost never going to create financial freedom for anyone.
Financial Literacy Solution
If your kids are in a financial education course at school, make sure the curriculum includes investing. If it doesn’t, volunteer to teach the missing piece yourself. Don’t know how to teach it? Call me…I’ll show you how easy it is to teach kids the importance of investing for their financial futures.
Want to make sure your kids learn about money and investing in a fun and highly effective way?
Invest in their financial future…and the financial future of every one of their classmates…by giving their teacher The Money Game.
Even if you can’t afford to do this, let the teacher know they can apply for a Get One, Give One™ Grant to receive The Money Game for free.
1. It’s a Habit, Sammy Rabbit by Sam X Renick – $5 ea. + shipping.
2. Will Sammy Ride the World’s First Space Coaster? by Sam X Renick – $5 ea. + shipping
3. Financial Wisdom Coloring Book by CWI – $8 ea. plus shipping (regularly $14.95)
If you’ve realized you don’t know what you need to know about money and investing in order to create financial freedom for yourself and your family, you’ve no doubt started to find ways to teach yourself about this seemingly allusive stuff that in so many ways dictates our experience of life.
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by Lynn Twist
by Robert Kiyosaki
by Catherine Ponder
by Suze Orman
