Teaching kids about money
When I got back to the US, I had $400 in my pocket. I don’t have any money saved for retirement, or a vacation, or even one of those groovy, flat screen televisions. I have, however, put aside enough for a rainy day that I’m not panicked about an unforeseen emergency, and that’s better than I’ve ever done.
Too many of us live from paycheck to paycheck. But even if we have a hard time saving money, ourselves, we owe it to our children to try–and to teach them about money. Encourage your children to save their allowances and special occasion money towards some greater goal, rather than blowing it all on candy and movies and such. If there is something they really want, don’t buy it for them. Make them save up for it. One way to make it work? Say you’ll match what they save. If they really want that iPod, then they will have to save up for it.
There was an interesting article in the Washington Post today (Mutual Funds for Kids Stress the Saving Lesson by Tim Paradis) that talks about mutual funds geared towards children…
I don’t know what a mutual fund is, let alone how to invest in one. I suppose, like what makes wind blow and why the sky is blue, this is going to be one of those things on which I’ll have to become more expert if I’m going to teach my kid about them. But I wonder… is it really such a good idea? Seems to me it’s a pretty sneaky way to encourage brand loyalty at a young age. Might just be a cynical marketer in me, but doesn’t it strike you as disingenuous that the investment portfolio includes McDonalds, Nike, Nintendo… you know, all those companies trying to market themselves to a younger and younger audience and cut out the parental middleman? Does this youth mutual fund initiative include incentives for green companies? Does it include wind power and companies on the cutting edge of truly beneficial technologies? The article specifically mentions the Monetta Young Investor Fund, whose slogan seems to be, “50% Index Investing 50% Stocks that Teens and Kids Recognize”. Huh. Sounds like marketing a sure way to get some brand loyalty… granted, to a very small — but potentially very savvy and affluent — market.
If you are curious about these things, you could start by checking out Al Gore’s financial-services startup, Generation Investment Management, with a portfolio of companies that fit GIM’s requirements for sustainability. Or check out Spectra Fund, who specialize in ‘green’ investments. Google ‘green’ ‘investment’ and ‘fund’ and you’ll be well on your way to investing in something more than just the market… and perhaps that’s a lesson worth teaching our kids.
Tags: investing, mutual-funds, mutual-funds-for-kids, saving, teaching-money
6 opinions for Teaching kids about money
FeeFiFoto
Nov 5, 2007 at 1:03 pm
Love your blog. I check in every day, and just linked to you again in mine: http://blog.feefifoto.com/2007/11/in-an-ironic-tw.html
FeeFiFoto
Nov 5, 2007 at 1:06 pm
BTW, I’ve been teaching my kids about investing by helping them buy stock through Scottrade. They each own three shares of this and four shares of that, and they’ve learned to check their progress every day. As far as I know, Scottrade has one of the lowest commission structures, so it’s good for kids, and owning shares in specific companies helps them visualize the process.
ratphooey
Nov 5, 2007 at 11:25 pm
I don’t think they mean to inspire brand loyalty, just to get kids involved by using stock in companies they’ve heard of.
When you get a new job? You really must participate in their 401k plan, at least enough to get the company match.
Keri
Nov 6, 2007 at 3:14 pm
Hi Christina,
Let me start out by saying that a mutual fund is basically, a pooling of money that is managed by an investment company with the objective of earning a good rate of return.
I grew up with the campaign “Give a hoot don’t pollute,” as a result, I’m well aware of the impact of pollution on our beautiful planet and I try everyday to do my part to help. In a perfect world everyone should take an interest in our planet’s health unfortunately, many believe it’s not their responsibility.
You are correct in saying that the Monetta Young Investor Fund is not a “green” fund but, one of its objectives is to teach financial responsibility to kids which leads to “green” responsibility.
The Monetta Young Investor Fund’s primary purpose is to teach kids the value of saving their money for their future. And using brands that children are aware of will help them understand this concept better. Being taught financial responsibility at an early age will help kids to make better decisions as adults on all levels, including caring for our planet.
I encourage you to give us a call so that we may answer any questions you may have.
Knowledge is power!
Keri
Monetta Mutual Funds
1-800-Monetta
http://www.monetta.com
http://www.younginvestorfund.com
christina
Nov 6, 2007 at 3:41 pm
Keri, thank you so much for writing!
Yes, I’ll probably ring you up some day and ask you to really explain this program and how it helps kids, and clueless moms, learn how to save. And then put it here for everyone’s edification. Thanks for enlightening me. Sometimes, I see the world through a cynical marketer’s eyes.
Got green in your portfolio? The King and I might just sign up!
christina
Nov 6, 2007 at 3:42 pm
Hey, Foto! I’m glad to see you every time you pop in. Your comments usually set my head straight.
Ditto to you, Phooey. I know, they aren’t marketing to kids, but sometimes… I see conspiracies everywhere
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