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. â€śI think itâ€™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 Iâ€™d had this type of information when I was younger,â€ť 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. â€śI would like to have stocks,â€ť Brendan says. â€śI can invest in what other people own and make money off of it.â€ť
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. â€śMany of our kids are constantly surrounded by messages in the media that promote overconsumption,â€ť says Lanta Evans-Motte, founder of the Youth Investment Club and director of outreach, partner, and community programs for LIFE. â€śWe 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.â€ť Tiffany â€śThe Budgetnistaâ€ť Aliche, author of The One Week Budget (CreateSpace; $14.99) and developer of a financial game for youngsters called Real Life, agrees: â€śIf youâ€™re not responsible with your finances at 15, youâ€™re probably not going to be responsible at 35,â€ť 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.