When JoAnn Burl of Burtonsville, Maryland, heard that her church was co-sponsoring a financial literacy program for children last fall, she knew immediately that she wanted her 12-year-old son, Brendan, enrolled. “I think it’s important for children to learn about finances and investing so they have an idea of how money works. It would have made a difference in my life if I’d had this type of information when I was younger,” the 49-year-old says.
The program Brendan attended, the Youth Investment Club, is jointly run by the Lanham, Maryland-based Literacy Institute for Financial Enrichment and Reid Temple AME Church in Glenn Dale, Maryland. Brendan and about 24 other students received a crash course in saving, budgeting, and debt management. But the sessions on investing have the entrepreneurial-minded sixth grader thinking even bigger. “I would like to have stocks,” Brendan says. “I can invest in what other people own and make money off of it.”
In the wake of the recent financial crisis and Great Recession, a growing number of parents and educators are increasing their efforts to teach children the rudiments of money management. “Many of our kids are constantly surrounded by messages in the media that promote overconsumption,” says Lanta Evans-Motte, founder of the Youth Investment Club and director of outreach, partner, and community programs for LIFE. “We wanted to provide an early introduction to the complexities of the financial world, so they could develop a healthy attitude about money and avoid financial struggles later in life.” Tiffany “The Budgetnista” Aliche, author of The One Week Budget (CreateSpace; $14.99) and developer of a financial game for youngsters called Real Life, agrees: “If you’re not responsible with your finances at 15, you’re probably not going to be responsible at 35,” she says. Studies show that financial education is sorely needed. According to a 2010 study by the University of Michigan Retirement Research Center, fewer than 33% of young adults have a basic understanding of concepts like inflation, interest rates, and risk diversification.