Experience Is The Best Educator For Teaching Teens How To Handle Their Finances

Teaching our children how to handle money begins in the home. A new study shows that the majority of teens prefer to learn through experience rather than education, but are they being heard?

New London, WI (June 4, 2008) - Everyone has their own formula for what helps them learn, the most universal being experience. When you fall down, you get back up. Then you keep going while reminding yourself that you shouldn't make that same mistake twice. Some of those falls may be worse than others, but the lesson is the same. So why shouldn't that apply to financial education?

A recent survey released by The Charles Schwab Corporation (http://www.aboutschwab.com/community/financial-literacy/teens-and-money.html) has shown that teens want to take on the responsibility of learning first hand. The survey, which states that around two-thirds (64%) of teens would prefer to be guided in the ways of money through experience, is a new stepping stone in convincing parents that they need to teach their children the important basics before they leave the home.

The author of "The No-Cash Allowance" (http://www.walnutrow.com/), a Mom's Choice Awards® Gold Recipient, Lynne Finch shares her thoughts on the topic, "Schools can’t teach real money management because they can’t provide money, hence real experience. Only parents can do that." Also adding that, "Parents know that kids will make mistakes while learning to walk or ride a bicycle, yet they don’t want their kids to make mistakes with money. This results in parents retaining control, telling and directing, not realizing that they are depriving kids of the chance to make their own decisions and learn from the results."

In her book Lynne shares ideas on how parents can work with their children to help them become more responsible with their money. With ideas for children starting as young as pre-school, her book gives parents the guidelines and information needed to help their children reach money management success.

"It does not require financial expertise but rather the willingness to give control and responsibility for money to the child." said Lynne, when asked to comment about her no-cash system, "In this system a child control all funds received from parents through a written credit-type account with adults acting as bankers. The account balance shows the amount of money or credit available to the child. A no-cash allowance gives kids a “big picture” view of their money and shows that each decision affects the balance."

Allowance Expert Warns Parents that Financial Literacy Alone Will Not Help Children Avoid Mistakes

 Teaching children financial literacy is important, yet it is not the complete solution. The only way children can avoid making mistakes with money is by becoming financially competent, a skill that is not developed in the classroom.

 (New London, WI, April 2, 2009) – No one can predict the financial future. As parents look at the fallout from the current economic turmoil they see troubled economic times ahead for their children. But when everyone is perplexed as to what to do, how can parents prepare their children for what lies ahead? 

In today’s economic climate, it is even more important for our children to grow up to be financially independent as adults. Children who learn to manage money will be able to survive in an uncertain financial future. Parents who help their children learn financial competency through hand’s-on practice at home will not need to bailout their adult children, thus protecting the parent’s own savings and retirement funds. 

The author of "The No-Cash Allowance" (http://www.walnutrow.com/), a Mom's Choice Awards® Recipient, Lynne Finch shares her thoughts on the topic, " We somehow believe that teaching financial literacy will save our kids from economic pitfalls. Knowing about financial matters will not help our children learn to manage their own money. " Also adding that, "Literacy is knowledge. Competency is skill. Financial competency requires practice, something that cannot and does not happen in the classroom, simply because children don’t own money in the classroom. To become competent in managing money a child has to practice with real money." 

Lynne challenges parents to transfer to each child a regular amount of money. She advises parents to say to their children, “This is your money. You are responsible for certain expenses. And, by the way, if you manage your money well you’ll have more to spend for fun. You are in total control. You will make good and bad decisions and sometimes will wish you had made different choices. As your parents, we can offer advice if you want it but don’t look to us to bail you out. Learning to manage money is an important responsibility.” 

“Parents need to give up control,” said Lynne.  She reminds parent to remember when they removed the training wheels from the bike. Parents expected some falls and scrapes, but with practice they knew their child would succeed. She continued, “However, when it comes to money, most parents won’t or can’t give up control. Just like learning to ride a bike, your kids will not learn how to manage money as long as you remain in control of money decisions. “ 

Managing money is a combination of knowledge and practice. One without the other is ineffective. The ability to control one’s money provides the power to make choices. “The No-Cash Allowance” gives parents the guidelines they need to set up an allowance system where kids can put financial literacy (knowledge) to practical use so they can develop financial competency (skill.) She concluded, “When our children develop financial competency through hand’s-on practice, they will be ready to navigate the economic challenges that lie ahead.” 

About Lynne Finch 

Having published "The No-Cash Allowance" in 2004, the advice she shares is still going strong. In 2006, the Mom's Choice Awards® (http://momschoiceawards.com/) made Lynne a Mom's Choice Awards® Gold Recipient.  The seal that they give to products they find to be family-friendly and of a good quality is what separates "The No-Cash Allowance" from other books on the market. 

Not just an author, Lynne also appears frequently on "Money Sense" which can be found on station WISN AM 1130 in Milwaukee.  She also writes an article for their quarterly newsletter (http://www.ellenbecker.com/newletters.html). 

Contact: 

Lynne Finch, author of "The No-Cash Allowance: A Practical Guide for Teaching Your Children How to Manage Money"
http://www.walnutrow.com/
E-mail: LynneFinch@walnutrow.com
Phone: 920-982-1475
P.O. Box 25
New London, WI  54961

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Don’t Pay Your Child With Cash

(New London, WI – August 20, 2004) In today’s world of virtual money, parents may be unsure how to teach their children about money management. In the book, The No-Cash Allowance, Lynne Finch solves that problem by showing parents how to give their child experience spending money that never exists in the form of cash.

The No-Cash Allowance: A Practical for Teaching Your Children How to Manage Money describes a proven method of teaching children how to manage money using cash and cashless transactions. This day-to-day money management experience includes activities that enable children to learn about debit card spending, ATMs, electronic transfers and credit spending. Activities and concepts are included for children from pre-school through high school.