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Survey: Parents Want Help Teaching Kids Good Financial Habits
South Dakota Ag Connection - 01/10/2019

Nearly nine in 10 parents of 4-8-year-old children (89 percent) feel it is extremely important that their kids grow up with good financial habits, according to a new survey by Edelman Financial Engines. Nearly as many parents (91 percent) agree they should be the ones teaching their children these habits.

Yet, virtually half of parents (49 percent) say they don't know how to discuss money in ways they think their kids would understand. Indeed, one in four parents (25 percent) never or almost never talk to their kids about household finances. The problem is particularly acute during periods of economic and stock market turmoil.

"Millions of Americans are not living healthy financial lives," said Ric Edelman, a co-founder of Edelman Financial Engines. "Almost 60 percent of all working age Americans have no retirement savings1. And dealing with unexpected expenses can be a hardship for many families without savings. In fact, four in ten adults could not cover a $400 emergency expense2. We need to help future generations become better prepared. It starts by teaching kids at a young age how to have a healthy relationship with money."

"Unfortunately, many parents think personal finance refers to the stock market," Jean Edelman said. "In fact, the most important aspects of money have nothing to do with investing."

Ric Edelman and his wife Jean wrote the illustrated children's book, "The Squirrel Manifesto" to help parents engage their children in conversations about money and help them form good financial habits. It debuted as the #1 bestseller on Amazon's list of children's money books when it was published by Simon & Schuster.

"It's easy to teach good money habits at very young ages," Ric said.

The book offers four money principles for children:

- Spend a little. It's important for children to experience the joy that spending money can bring. Allowing children to purchase a toy, a piece of candy or comic book helps them develop a positive relationship with money.

- Save a little. It's equally important that kids learn to save for bigger-ticket items--like a bicycle or video game--to help them understand the benefits of delayed gratification and help them avoid impulse buying. The survey found that when parents talk with their kids about money, 86 percent usually talk about it in the context of saving.

- Give a little. Money brings opportunity, and responsibility as well. Children should be taught to help others who are less fortunate. Studies show that children who are raised to be philanthropic grow up to be happier adults.

- Tax a little. Children need to be taught at a young age that they don't get to keep everything they earn. Just as the government collects a third of an adult's paycheck, consider withholding one-third of a child's birthday money, allowance, or babysitting earnings. Save the money and present it to them when they are ready to pay for college or a car, showing them the value of long-term compound growth.

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