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Experts explain value of children saving money
Recent news reports indicate that many Americans are saving less money than they used to.
In an era of technological convenience, area psychologists, educators and bankers all agree on the importance of teaching people to save money early in life. National Teaching Your Child To Save Day will be celebrated Tuesday and one area expert says the subject is two-fold.
Ohio Northern University Assistant Psychology Professor Steve Hundersmarck says mathematical figures are just a small part of teaching children about money.
“The concept of money is important because it helps kids learn about concepts in general. They have to understand what a dollar is worth and how it breaks down,” he said. “Psychologically, saving helps with delayed gratification. If you get five dollars and have to put it in the bank, that teaches an individual more than just saving — it teaches them how to withhold the gratification and develop self-control.”
Hundersmarck says modern technology and plastic have changed the dynamics of teaching youth the value of a dollar.
“We adults have a better understanding of money as a concept because we saw Mom and Dad pay for things with dollar bills, whereas now, you swipe the debit card and kids don’t understand that. Teaching them about money is even more of a necessity now so they understand money as a tangible good. The magic card is never empty, to them, and they have to see there’s something underneath the debit card,” he said.
The professor recommends children have chores to do in order to receive an allowance, so they associate tangible dollars with the effort made to earn them.
“Hopefully, that may help later in life with credit card debt,” he said.
It is also recommended that parents teach budgeting and goal-setting in relation to a child’s saved funds. Setting aside a certain amount to give to charity can teach generosity and associate a child’s dollars and cents with the outside world, expanding the child’s worldview.
One area educator says teaching the concept of money gets easier as a child grows older.
“I think kids younger than fifth grade probably don’t have much of a concept. By sixth grade, about 75 percent of them would understand a little better what money is about. A lot of children in the sixth grade have babysitting jobs or mow lawns and they start to see the value of a dollar,” said Landeck Elementary School Principal Mark Fuerst.
Plastic is one of the things that teachers include with other in-class discussions.
“We talk about credit cards. Not so much the evil aspects, because they’re necessary sometimes, but kids need to understand that items purchased become more costly if you don’t pay the card’s balance every month,” Fuerst said.
“We talk about percentages and what a good percentage would be to save in a month for an individual or a family. We also talk about how much a car costs and how very few people can go out and pay cash for a car. We show them how much people actually pay for a car after you figure in the interest rate.”
Aside from covering issues of consumer math in the curriculum, outside experts also address students.
“We do have someone from the bank come in and talk to second graders,” he said.
First Financial Bank Assistant Manager Jane Looser goes to Landeck and both Delphos elementary schools.
“We talk to them about saving money. We try to entertain them to keep them interested and come up with a good reason to save money. We use real money and offer them things to buy like candy or something else they would be interested in. In the end, we talk about how much they have spent and how much they have saved. Some will buy things and some will not; they know we’re talking about saving money, so they will turn items down because they know they’re supposed to be saving,” she said.
Looser believes the valuable lessons young people will need to know as adults should be taught now.
“The younger people are when they start saving, the more likely they are to carry it with them throughout their lives,” she said.
#1 — Added 2 years, 10 months ago
Great points! The sooner kids make a habit of saving, the better off they will be. From every dollar, save a dime! Sammy
Posted on April 24, 2007 at 6:45 pm by Sam X Renick
#2 — Added 2 years, 10 months ago
I am delighted that we are talking about teaching children about money. I co-founded a company, Early Earners dedicated to teaching families and kids about saving practices as a result of a lack of simple information on this. I believe saving is a habit that parents instill in their children, like personal hygiene and nutrition, and is learned by doing. And what is a better way to learn about the power of compound interest than actually earning it? We all need to start saving a little by little and start today!
Posted on April 30, 2007 at 3:12 pm by Ami Desai