Kids Get Money-Smart

Teachable Moments

It's clear the need is there. The JumpStart Coalition, a nonprofit group that promotes financial literacy in students and is funded by a who's-who list of financial services giants, administers a survey of personal finance knowledge among high schoolers. In the 2005-06 academic year, the average score was 52.4 percent, up marginally from the year before but down from 57.3 percent 10 years ago.

Part of the problem is that parents don't know what to teach their kids and often don't want to talk about money because they don't think they're good role models.

The financial services industry sees parents' desire to educate their kids as a chance to educate both generations. "You can learn it, you can model behavior, you can talk about it, you can learn with your child," said Loretta Abrams, vice president of consumer advocacy for the financial services firm HSBC.

Some experts question whether financial institutions use youth education as a public relations move, to protect themselves from criticism for encouraging kids to spend, especially with credit cards. Visa, for example, has partnered with Hasbro to introduce a new version of the Game of Life board game. It comes not with play money but with a Visa card for swiping.

"The lesson and the moral for parents to be concerned about is unless these skills are consistently reinforced with a positive message, they'll be lost," said Robert D. Manning, a finance professor at Rochester Institute of Technology and author of "Credit Card Nation." Some of the education efforts by banks are "vastly under-funded," he said. "The banks know this financial education stuff is going to be background noise when [kids grow up and] it comes time to party with your friends," he said.

The marketing of personal finance to kids is becoming big business. Sam Renick was a financial consultant before creating a rabbit character, Sammy the Saver, aimed at teaching elementary-school kids about money. He does performances for huge audiences and sells products on his Web site, http://www.itsahabit.com.

You can also buy your child a toy ATM to keep precise track of allowance deposits (and withdrawals), or maybe settle for one of any number of piggy banks that have slots for saving, spending and giving.

If your daughter is into American Girl, she can read "A Smart Girl's Guide to Money." If you want to teach her about investing, there's the book by Oneshare.com, a Web site that sells single shares of stock, called "Stock Matters: An Introduction to Stock and Ownership."

Got toddlers? They can watch a new DVD aimed at 2- to 6-year-olds called "The Money Mammals: Saving Money Is Fun."

Teachable moments start early, said Dan Mica, president of the Credit Union National Association. For the past year, the group has been promoting a program called "Thrive by Five" aimed at teaching preschoolers about spending and saving. "You're behind the curve if you start trying to teach your kids about finances when they're teenagers or young adults," he said. "You've got to start teaching an awful lot about this when they're younger."

For any parent facing the return of a college student who couldn't make it in the real world, those are depressing words. And not everyone agrees. "It's never too late -- I didn't learn until I was in my 30s," said Mackey of Prosperity4Kids.

But she and others agree that it's easier to get younger kids to back off on spending and learn to save. Mackey pushed her own kids, now 11 and 13, and once they saw their savings grow, they were hooked. It's been good not only for their financial futures but also for their self esteem because they're not comparing themselves with others based on who has which gadget or expensive outfit.

"They're not obsessed with money anymore," she said. "They know how powerful it can be for them."