Teach your kids to be money smart
Healthy finances - May 2005
Sunday, April 24, 2005
For awhile, it seemed that every 20-something person I read about thought of bankruptcy as just one more money management tool available when the going got rough.
Bankruptcy had no stain and no shame. It was simply what you did to move on—a small price to pay so you could explore the next great opportunity, unencumbered by that nasty debt. There seemed to be a total lack of personal responsibility for accumulating debt.
On the other hand, I have also read about families crushed by medical debt or unexpected and lengthy unemployment. These people clearly felt nothing but responsibility for their debt. They declared bankruptcy just to survive.
What does seem clear now, however, is that everyone—no matter what the reason for the overwhelming debt they are living with—will be impacted by the new bankruptcy legislation. The new federal law makes it considerably harder for any financially strapped individual to file for Chapter 7 bankruptcy to erase their debts after the law takes effect in October.
So, what can you do to insulate yourself from reaching the breaking point of bankruptcy? While it’s not a guarantee, the best line of defense is to be fully informed and educated about money. That means knowing how to save, spend wisely, donate generously and invest properly.
And there’s more: using credit wisely, understanding financial contracts (by reading the small print) and making budgeting a way of life. Knowing how to manage all these financial tools will help keep the wolves from the door.
It’s a huge undertaking, to be sure. But help is available in the form of Money Smart Week, held May 23 to 28.
Money Smart Week was created four years ago by the Federal Reserve Bank of Chicago along with members of the financial and education communities to help consumers learn to manage their money wisely. Managing credit, checking accounts and loans, understanding financial planning, estate planning and budgeting—along with myriad other topics—all will be explored in detail at workshops throughout the Chicago area.
You, and your children, can access the very best of programs given by local financial experts during Money Smart Week. Best of all, many of the programs are free of charge.
For the kids
While many programs are geared toward adult money issues, a few programs are aimed specifically at our children.
For example, HSBC, a financial services company, will offer a program with Money Management International to present simultaneous money management workshops for adults and children in the same location. Marci Goldgar, HSBC’s consumer affairs executive, says there will be two age-appropriate programs for kids to teach them to be smart about spending and saving money. “The Money Bunny Goes on Vacation” is geared toward children ages 4 to 7. “Money and Me” is for children ages 8 to 12.
While the kids are participating in their program, parents can attend an “Understanding Money and Credit” workshop. This workshop provides training on budgeting and financial goal setting and will reinforce the information taught during the children’s program. It will discuss goal setting as a “family affair” and help parents teach their children how to be good money managers.
Or take your family for a free tour of the Chicago Mercantile Exchange or a tour of a participating bank. Either will give them an up-close view on how our financial systems operate.
Other programs are school-centered and aim to teach grammar school students about money issues. In addition, the Girl Scouts will offer a program just for girls, while banks will offer a variety of programs aimed at children from kindergarten age through their teens.
And it’s not all dry lectures. The Economic Awareness Council has teamed up with the Museum of Science and Industry to get the video game generation interested in economics. The program uses the museum’s Game On exhibit to explore the economics behind the development of video games and the gaming industry. That program will run all week at the Museum of Science and Industry, 5700 S. Lake Shore Dr., Chicago.
For more information on the full week’s worth of programs, visit the Money Smart Week Web site calendar at www.chicagofed.org/moneysmart.
The workshops are available in the daytime and evenings and in many local neighborhoods. Many are repeated several times during the week. The Chicago Public Library also has a list of financial workshops this year for adults and children.
Use Money Smart Week to kick off your family’s financial literacy education. Simply put, financial literacy is the key to economic independence. Grab this opportunity to become money smart while it’s so readily available.
Susan Beacham is the founder and CEO of Money Savvy Generation, a financial education company that provides innovative products and services to help parents and educators teach children the skills of basic personal finance, www.MoneySavvyGeneration.com. E-mail her at Susan@MSGen.com.