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Kids & Money $$

In News, Self Improvement on October 4, 2010 at 7:48 am

Kids & Money

CNN ran an awesome report this morning during the A.M. FIX [6 am – 7am] with (Kiran Chetry and Ali Velshi) about “Kids & Money”. Christine Romans yielded us financial insight (much like the insight that’s printed in her new book: “Smart is the New Rich”) – her whole point is ‘the days for using borrowed money is over’. It was risk that made people rich over financially secure over the last 20 years. Right?

Risk is not going to make the average family secure anymore. Being smart is going to make a family secure. This also means it’s never been more urgent to teach your kids the right lessons about money – and maybe they won’t make the mistakes that we’ve made.

Christine’s report on Kids & Money introduced us to an economically sharp family: The Rodgers. Bill Rodgers, (Chief Economist with the Dept. of Labor) and his wife, (Yana, whose also an economist) were the perfect couple to study and ask the question ‘What’s it like to be an economist and parents trying to teach your kids about money after a crisis?”

Christine Roman Reports:

“Asking Mom and Dad for $money$ takes some on a whole new meaning when mom and dad are renowned economists. Meet the Rodgers: Bill and Yana and their kids, Ellie, Billy and Charlie“.

Christine asks, “How do you teach your kids about money – when money & the economy is what you do for a living?”

Yana: For a long time now, we’ve been using sort of a trick and that is ‘the childrens literature’.

Bill is a former Labor Dept. Economist and Yana is a Rutgers Professor who runs EconKids.Rutgers.edu —a project that uses kids books to teach economics. Chistine asks, “Give me an example of a book that I might have in my bookshelf that actually has a subversive economic message in it. “

Yana: Berenstain Bears (Trouble with Money). Everybody has Berenstain Bears and Curious George (Takes a Job), where he goes to a factory and it’s all about production, and then there’s “Click, Clack, Moo” – Cows that type, (that’s one that Bill likes a lot too).

“The cows, incase you forgot, go on strike – leaving a sign on the production door that says, Sorry we’re closed. No milk today. The Rodgers ALLOWANCE SYSTEM is a little more elaborate than most”:

Ellie: $3.00 a week — we get paid every Wednesday and depending on the chores that I do, I get paid $8.00 an hour…

…“and for messier jobs it’s $10.00 an hour. Economist mom explains that’s the economic principal of Compensating Differential“. Christing asks Ellie, “What is it like to be raised by two economists they know everything about money and policy“?

Ellie: It can be a little frustrating sometimes when I’ll want something for Christmas, but it’s a little too expensive, so I’ll have to go for (maybe) the bargain brand or wait until it goes on sale. I’ve become a very good sales shopper.

It’s a family created by economics. Bill and Yana met in the Econ Dept. in Harvard in a family run by economics like all families.”

Bill: The one big thing that I talk about with our kids is the budget constraint. That is the notion that there is a fixed amount of money and you have to allocate that money across a more expensive baseball bat verses your cleats that you’re going to buy….

Christine is literally staking her reputation on this subject in titling her book “Smart is The New Rich“. Here’s a few recommended points that you should share with your own kids:

* Money is finite
* Strict rules on allowances and stick to it
* A level of chores the kid does for free

The Schwab Foundation found out earlier this year that kids that take out the trash (whether they get an allowance or not) grow up to do better with money.

Intelligence and Knowledge of Money is something I dig,
I’m Qui
I dig it so much, I had to ‘type it out’ to share it with you and my kids. 🙂

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