Even kids can get rattled by a recession.
Jordan Fox, 12, is a middle schooler in Rocklin, Calif. His parents earn steady paychecks, but he's seen the headlines and heard the stories of families who have lost their jobs or homes.
That's why Jordan, who wants a cellphone, is biding his time. "I want one, but I know that it is not a 'need' for me. ... We're in a not-so-good economy, and I don't want to make my parents spend more than they have to. So I don't pester them; I'll wait until they're ready."
That kind of financial sense is what Jordan's parents are trying to instill in trying times. His mom, Lynn Fox, signed up Jordan and his 9-year-old brother, Kai, for an online kids-and-money program tied to America Saves Week, which ended Feb. 28.
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"We wanted them to know the value of money," said Fox, a preschool administrator. "We both work and have jobs; our kids are not wanting. ... If we teach them to make wise decisions now, they'll have good habits to carry forward."
Fox said she talks with her boys about spending versus saving their $5 weekly allowances. She and her husband also match dollar-for-dollar any amount their sons want to invest, as they've done with Disney and Starbucks stock.
"Teaching children the basic rules of good money management -- like 'spend less than you make,' 'pay yourself first' and 'keep a budget' -- is key to their success as adults," said Karen Anderson, chairwoman of the California JumpStart Coalition, which promotes financial literacy. "The economic difficulties many families are dealing with ... are, ironically, also an opportunity to help kids learn these critical financial concepts."
Studies show that children, particularly teens getting ready to live on their own, are hungry for a little more financial education. According to a Capital One survey last year, half of high schoolers wish they knew more about personal finances.
That appetite is all too familiar to Karyn Hodgens, a Rocklin-based personal finance educator who teaches classes at elementary and middle schools. Last month, she launched "Beyond the Piggy Bank," a free 15-day money management program on her Web site, www.kidnexions.com. It sends a daily e-mail on topics designed to get kids and parents talking. About 30 families across the country are participating.
One topic is the classic: "needs vs. wants." Or as Hodgens puts it: "Shoes are a need, but are Nike Air Jordans? Clothes are a need, but are designer jeans? A cellphone may be a need, but does it have to be the iPhone?"
She says if the answer from your youngster is an emphatic "Yes!" then they should learn how to earn enough to pay for those "wants."
"We need to teach kids to live within a budget and make those choices themselves," she said. "It's learning life skills."
Sometimes, it's as simple as talking about your own choices. Eyeing a sweater at Macy's or a Target housewares item while shopping with kids can be a chance to ask: Do I need it? Can I afford it? Would I make the same choice a week from now?
Kai Fox, who's the family banker for himself and his brother, has nailed that needs vs. wants lesson. " Wants are things you would like to have but don't need to get on in life," he said. The fourth-grader has saved up about $140 for his wants: "Maybe a new Lego set or basketball ... or a laptop."
For financial teachers like Hodgens, managing money is not about how much, but how well you use it, such as giving to charity.
"Kids love handling money, and they love knowing you respect what they think," Hodgens said. She suggests talking as a family about ways everyone can pitch in to save, conducting a "money tour" of the house to find energy savings and letting kids choose less expensive family entertainment.
The country's economic downturn, she notes, has made talking finances with kids "more in vogue than it ever used to be." And it has given parents additional incentives to pass on hard-earned financial lessons to their kids.