ATLANTA, March 18, 2013 /PRNewswire-USNewswire/ -- Crown CEO Chuck Bentley said that the nation's education deficit in personal money management is a crisis that is affecting the next generation. "Well over half of Americans live without the benefit of a household budget, and one out of five of us admit we have no clue how much we spend on such things as housing, food and entertainment," observed Bentley in a national column.
Part of the problem is that parents don't realize how important their role is in training their children in money management. The National Foundation for Credit Counseling's 2012 Financial Literacy Survey recently revealed that 44 percent of Americans learned the most about personal finance from their parents.
"Clearly, the ability to handle money wisely is one of the most important lessons you can pass along to your children," said Bentley.After more than 35 years of training individuals and businesses in sound financial practices that both establish a strong economic foundation and develop patterns of giving back to the community, Crown has developed a number of tools to accomplish financial education. But Bentley notes that there are five key principles that every parent should communicate to their children. They are:
- Delayed Gratification. This lesson is best taught from one year of age forward. To begin, parents must learn to say "no." From almost the moment of birth, kids are in a "me, my, gimme" stage. Teaching them to wait for something they want is crucial.
- Simple Allocation. This lesson, taught from ages three to five, is more visual than mathematical and it's designed to help kids establish a routine with money. By now they are receiving monetary gifts from grandparents or other family members, and from the earliest age must learn to divide and distribute these resources.
- Personal Responsibility. The very young child who wants to "help" a parent fold clothes or rake leaves is heartwarming, and that behavior should be encouraged. But by ages five to eight, a child should be taught to do routine chores simply for being a member of the family. An allowance should be earned for doing chores that benefit the entire family and are not personal responsibilities.
- Earning and Spending Money. This is an extension of the earlier simple allocation lesson and necessary from ages eight to 12 because the child is able to earn money by doing a variety of tasks around the house. Post "jobs" on the refrigerator with the price you are willing to pay, but be willing to negotiate within reason. You'll be surprised how quickly a young "contractor" bids on the work.
- Work Experience. From ages 12 to 16, your child's ability to earn money around the house and in the neighborhood dramatically increases. Once a skill such as leaf raking is mastered, the child can then offer the service to neighbors to earn additional money. By age 16 your child will know the value of working for someone else and earning money outside the home. It's now only a short step to filling out applications at nearby restaurants and other businesses for part-time work.