The News & Observer
November 3, 2002

Learning about money begins at home
By Chris Serres; Staff Writer
 
When Maureen Dolan Rosen of Chapel Hill discovered that most elementary schools in the Triangle do not teach courses on money, she took matters into her own hands. The human resources consultant and mother of two children has begun monthly workshops with local Cub Scout troops and neighborhood children on the merits of budgeting and saving money. In addition, she recently published a book, "KIDSCA$H™" ($12.95, Rosen & Associates), and launched a Web site, www.kidscashmanagement.com , devoted to the topic.

Rosen, 45, recently sat down with staff writer Chris Serres to provide tips for parents looking to educate their children about money.

Q.You mentioned to me previously that discussing money with children has become "the last taboo." What do you mean by that?

A.Well, as a for instance, my kids get all kinds of information in school about controversial topics. They tell them: "Don't do drugs," "Don't drink," "Don't have sex," "Don't get pregnant" and "Don't get kidnapped." And they have outsiders come in to give them workshops on these things. But there's nothing about money. ... I called a number of elementary and middle schools in Chapel Hill and said, "Look, I've got this [book] on cash management for kids. I'll give it to you for free." I think I called six or seven schools, and none of them were teaching anything like this.

Q.But isn't it the responsibility of parents to teach their children about money?

A.Of course, this has to come from inside the home. ... But I think parents, for whatever reason, don't talk about money with their children. They just assume that they will just get the information. And by and large, it's not something that's addressed in the schools.

Q.So what are some things you do at home to teach your two children (Millie, 11; and Miles, 8) about money?

A.Well, about four months ago, they began recording and calculating what they spend every month. And now they're in the habit of doing it. And I will ask them, "Did you write down what you spent today," when I know they spent something.

Q.Do your children enjoy this?

A.It's interesting. After about three months, they got the concept that, "Hey, the calculations tell me this, and that's what I actually have on hand." Maybe not to the penny, but close enough. You could see the lights go off that, hey, maybe there's a logic to keeping track of this. Now they don't need my prompting to do this.

Q.But your children are pretty young. Where do they get enough money to make this budgeting relevant?

A.They have an allowance. And you would be surprised. They find money all over the place. They're like magnets. It's a big day if Millie finds 37 cents today [laughter]. ... And we pay them extra money if they do chores. For instance, we have a fireplace, and I like to throw pinecones into it because it smells nice. So I said, "Hey, I'll give you a penny for every pinecone you can pick up." I thought they'd pick up about 50 pine cones, but they picked up about 500 cones. So that was a chunk of change I ended up paying them.

Q.Do you encourage them to save that money, or can they spend it on whatever they like?

A.They have to put about half their allowance in savings. The other half, they can do whatever they want. But I make them ask the question for whatever they're going to buy: "Are you sure you're making a wise decision about what you're spending?"

Q.Does that question ever prompt your children to avoid the temptation of buying something they really want?

A.Well, one example really sticks in my mind. Millie and I were at some store, and she saw one of those battery-operated lollipops that, if you pushed a button, it spins. Like, God forbid you should lick the lollipop manually. And it cost $5. I think Millie had $6 saved up over three or four weeks. So I said, "Are you sure you want to spend all that money on a lollipop?" She thought about it and decided not to buy it. I think that took with her. My kids are pretty good now about making decent choices with their money.

Q.How much of your family finances do you share with your children?

A.That's a big question. Our kids asked us about how much our home renovation cost. That was probably the first time they forayed into our finances. I don't think we told them, mostly because it's a hard number to grasp. Like we were talking about Volkswagen Beetles this morning. ... Millie said, "Hey, aren't those cars really expensive?" And I said, "No, I don't think so." Then I realized what I had said. To me, relative to other cars on the road, they're not expensive, but they still cost about $20,000. And the idea of $20,000 to an 11-year-old is kind of out there. It's tough to grasp.

Q.So how do you help your children understand the cost of living?

A.Well, there is one thing that we've started doing. When good movies come out that are family-oriented, we like to go to the movies as a group -- all four of us. I've started to require that my children pay into the ticket. So rather than me footing the bill for a matinee, which can run over $15, they can pay maybe $2 each into it.

Q.And how did they respond?


A.At first, they were a little hesitant. They said, "Why do we have to pay for movies?" But when I explained to them how much it costs every time we go to the movies, they understood. They realized that this was part of being a team, a family, that you share costs together.

Q.Are you worried that if you discuss money too much that your children might become greedy or obsessed about money?

A.Sure, that's a legitimate concern. ... There have been times when I'll be out in the yard and [my children will] come out and say, "Do you need me to pick up kindling?" I'll say, "Yeah, that would be great." And they'll say, "How much are you gonna pay me?" And I'll say, "Look, if you want to sit in front of the fireplace and have fires, then you can help as part of the team."

Q.So how do you avoid kids thinking that money is everything?

A.One thing parents can do is instill the importance of charitable giving in their kids. ... Many parents will have their kids divide up their allowance in a way that one-third of it goes to giving. We have a neighbor whose son did this from very early on. His particular charitable group was the dog pound. This kid started doing it when he was 5 [years old]. He would just save up his money and take it to the pound. It was small amounts, but they put him on their donor list and sent letters thanking him for the donations. I remember [his mother] saying it really gave him a real sense of gratification.

Q.Now, there are plenty of adults who don't do these things. Why do you consider it important that kids to do this?

A.The whole purpose is to get them in the mode of being aware of their money. They need to be aware of this so they don't get to the point where, when they're 20 or 21, that they're completely clueless about money.

Q.Did your parents discuss money with you when you were in grade school?

A.As a matter of fact, no, they didn't. And that could explain why I got into some real financial difficulties when I was just out of college. Like a lot of young people today, I did a lot of stupid things like using credit cards that were sent to me in the mail. I was using money that I didn't have. At one point, I had to borrow $1,500 from a friend and then I couldn't possibly pay it back. So then I had to borrow money from my parents to pay the friend back. And it was probably the single most mortifying moment in my life to have to go to my parents -- people who had never had debt in their entire life -- and say, "I need to borrow money to pack this person back."

Q.Why was that so mortifying?

A.Well, you have to understand my parents. My father just never had a debt. He had an eighth-grade education and ran a machine for the government printing office. When he retired after 30 years, he was making about $30,000 a year. He never made much money, but the man never had a debt. So his response was, simply, "This can't be happening. You can't possibly have to borrow $1,500." ... Now I'm not saying it was his fault that I had that debt. But I want my kids and other kids to get more in tune with what money means and how to deal with money. That way, when they get to be 18 or 19 [years old], and they get these thousands of credit-card offers plopping into their mailbox, they understand that you can't spend money that you don't have.

Q.But a lot of economists would argue that credit is a good thing. It enables people to buy things they couldn't otherwise have and to make it through short-term emergencies.

A.Don't get me wrong. There are certain necessities you have to buy. Within reason you can go into debt, provided that you have the means and knowledge to manage that debt. ... But it worries me that we're going through a whole generation of savers to a whole generation of spenders. Borrowing $1,500 from my parents was, for me, a huge stigma. Today, I don't think that would be [considered] a big deal.
 
Copyright 2002 by The News & Observer Pub. Co.

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