Investing in Our Kids. Should we give our children financial advice?


When we give children financial advice, what are we really teaching them?

by Maria Laurino

August 6, 2009



With our economy in a major meltdown, it’s no surprise that we’re being bombarded with advice about our personal finances. But in the past year, the emphasis of that advice has made a surprising shift: the media, schools and banks are all telling us that we need to teach our young children about money, before it’s too late.

Take “Fiscal Fitness,” a course for grade school children which teaches those “as young as eight the nuts and bolts of money management”: a former banker brings her multi-slotted piggy bank into classrooms to instruct children on financial skills like saving and investing. Or the newest attraction at Epcot Center, “The Great Piggy Bank Adventure,” a series of games in which players, guided by a talking piggy bank, “move levers to ride the currents and capture falling coins before they’ve been reduced in value by the evil wolf and his sinister inflation machine.” (This attraction is sponsored by investment firm T. Rowe Price; the bank ING is also getting into the action with its newly launched gaming website for kids, “Planet Orange.”) One recent news segment showed six-year-olds writing checks and swiping credit cards in an updated version of the classic board game Monopoly, which now comes with its own credit card machine. Is this how we teach our children well? At four they learn to wipe, at six to swipe?

I remember my first hesitation about introducing the concept of money to our son. As a two-year-old he was given a “dinosaur bank” as a birthday present. The mother handed the gift to me saying, “My kids just love watching the money go down and build up.” Our son would feed change into the blue mouth of the dinosaur. Each penny, nickel, dime, and quarter clanked its way down a long wooden neck carved like a corkscrew until reaching the plastic globe belly with a triumphal ping. The belly grew bigger as the loose change accumulated, and only a screwdriver could open the bank. The money was elusive – seductively piling up and ultimately out of reach.

I didn’t want my son to horde his money, savoring the pile at first, and then longing for all that change to buy some toy he had in mind. I felt that once such a mindset developed and the belly of the beast was finally opened to let the change flow out, no toy would ever compensate for the empty feeling he would have staring at the penniless plastic globe in the belly of the dino.

So I made a simple rule. Every Christmas season we would open the bank, count the coins, and put them into individual paper rolls – the most fun activity – in order to cash them at the bank. Then we’d donate half the money to our local soup kitchen and my son could have the rest to either spend or put in a savings account. Once we established that dino helped to create our holiday soup kitchen project, I felt better about its trickle-down neck, perhaps an intuitive reaction to my aversion to trickle-down theories.

The idea that we should teach young children more about finance and credit in a money-fixated culture seems to me like helping a shipwrecked passenger in the middle of the Atlantic by tossing out a noodle from the swimming pool. If we weren’t so obsessed with individuals making as much money as possible – rather than acting collectively to help improve the lot of the community – we might not be in the predicament we are today. So why not use the short and elusive time of childhood to teach the great virtues, not the little ones?