January 25, 2011

Financial literacy for the entire family

Raising Financially Fit Kids
by Joline Godfrey

More than a money book, Joline Godfrey's guide is an important parenting book that should be in every home. She likens financial literacy to an apprenticeship, with developmental stages that parents and children can go through together. 

The book covers 10 basic money skills: 

  1. how to save
  2. how to keep track of money
  3. how to get paid what you're worth
  4. how to spend wisely
  5. how to talk about money
  6. how to live on a budget
  7. how to invest
  8. how to exercise the entrepreneurial spirit
  9. how to handle credit
  10. how to use money to change the world

Charts list the appropriate skills to master at four age groups: 5-8, 9-12, 13-15, & 16-18. Fold-out charts offer more detail: actions to practice each of the ten money skills, and other supplementary resources (books & websites). 

To further stress the importance of financial literacy, Godfrey provides two money mantras that parents should memorize and recite to their kids daily:

  • An allowance is not an entitlement or a salary. It is a tool to help you learn how to manage money.
  • The more financially responsible you are, the more independence you will earn.

Practical advice include setting family money values to live by, including children in all financial discussions, telling them the truth, and allowing them to take risks. And do not bail them out! As Godfrey puts it: It is easier to live with consequences when your child is 13 than when she/he is 25 or 45

If the skills and mantras seem overwhelming, she reminds parents that they don't have to go it alone; they should enlist the help of friends and family to act as money mentors for their kids.

Godfrey writes in a supportive, reassuring manner that parents will appreciate. Raising Financially Fit Kidsis a valuable resource that will help parents guide their kids in becoming responsible, confident, independent and financially secure adults.

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