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What are some creative ways in which parents may use allowances to educate their children on financial matters?
The DoughMain survey shows that 38% of parents match the deposits made by older kids in their savings account. This helps to
Parents can teach kids about working for money by giving them an allowance as compensation for chores and sometimes requiring them to save some of that allowance.
show older kids that their savings can grow, giving them further incentive to save. Since many teens are given responsibilities such as paying for cell phones, music, and entertainment, they will become more accustomed to and interested in saving.
The study also showed that although 63% of families have opened savings accounts for their kids, only 43% of parents ever look at those same account statements with their children, and only 28% of children have ever looked at their account statements online.
A quick search of the Internet reveals dozens of books related to children and financial literacy. Some popular titles include: Robert T. Kiyosaki's Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money—That the Poor and Middle Class Do Not! (2011); Nancy Holyoke's A Smart Girl's Guide to Money (American Girl Library) (2006); Eno Sarris and Masaaki Aihara's My First Book of Money: Counting Coins (2007); Gail Karlitz and Debbie Honig's Growing Money: A Complete Investing Guide for Kids (2010); Larry Burkett's Money Matters for Teens (2001); Katherine R. Bateman's The Young Investor: Projects and Activities for Making Your Money Grow (2010); Brette McWhorter Sember's The Everything Kids' Money Book: Earn It, Save It, and Watch It Grow! (An Everything® Series) (2008); and Hollis Page Harman's Money Sense for Kids (2004).
What are some interesting websites that parents may use to help educate their children about financial literacy?
According to experts at the non-profit Alliance for Investor Education, parents can benefit by visiting several websites that introduce children of varying ages to financial matters. Some of those sites include 360 Degrees of Financial Literacy at 360 financialliteracy.org/; Gen i Revolution at genirevolution.org (Council for Economic Education); Tips for Teaching Students About Saving and Investing at sec.gov (SEC); and Great Minds Think atfederalreserveeducation.org (Federal Reserve Board of Governors).