Financial Advice

Back-to-school shopping a way to introduce children to money

Sharon Lechter, co-author of Rich Dad Poor Dad, urges parents to teach financial literacy PHOENIX (August 29, 2007) – Back-to-school shopping affords parents a great opportunity to begin teaching young children important life-long lessons about money that will one day save them the debt and lack of financial literacy that plagues many of today’s young professionals. “I am often asked when you should start teaching children about money,” says Sharon Lechter, co-author of the international best-selling book Rich Dad Poor Dad. “My answer is to ask another question. At what age do you think a child knows the difference between a one dollar bill and a twenty dollar bill? Most people say anywhere from four to six years old and that is when I would start the teaching process.” Back-to-school shopping provides parents the perfect chance to start teaching their children money management. A simple and effective way to begin teaching children the value of a dollar is to provide them with a list of supplies they have to buy and a $25 budget with which to do so. This exercise can not only be fun for children, but will begin them on a path towards financial literacy and responsibility. However, parents often balk at the idea of introducing their children to money at such a young age, fearing they will become greedy or start spending more money and accumulating debt earlier and faster in life. Nevertheless, with the influence of television and the Internet in today’s society and added pressure from their peers, kids already know how to spend money by the age of six. They may understand the value of what money will buy , but they do not know how to make it, keep it or invest it. Providing them with a back-to-school budget is a great way to set them on the right track. “Your children are fast learners when it comes to spending money,” said Lechter. “They see you spending money all the time, just in the course of daily living. The problem is, however, your children are not typically with you when you make your money. They don’t see the effort that goes into earning a living. They may see you leave the house and come home at night, but they probably don’t understand what you are doing all day.” Lechter adds, “The problem often stems from what parents unintentionally teach their children. Over 94 percent of young people surveyed say they learn their financial habits from their parents, especially poor credit card management.” In this generation, credit cards have become the payment of choice. Purposely or not, children have learned instant gratification through the actions of their parents. How many times have your children told you to ‘just charge it’ when asking for something new? By succumbing to ‘just charge it’ impulses, parents are teaching their children the wrong message. For parents who prefer a ‘just charge it’ mentality, there are still ways you can teach your children these life-long lessons. When your next credit card bill comes in, review it with your children. Discuss what it felt like when you bought something. Are you still enjoying it? Do you still have it? How does it feel to pay for it after the fact? Is it as much fun paying for it as it was buying it? Providing children with low-limit credit or debit cards, under supervision, can help them avoid years of debt and poor money management in the future. Parents who already supply their children with a weekly or monthly allowance should start placing that allowance on the child’s card. When the bill comes in, parents can sit down with their children to help them understand where their money was spent and how they can better manage their personal finances in the future. “Sharing the ‘paying’ side of life will educate your children about both sides of the money equation,” says Lechter. “Knowledge is power. This school year provides a great new opportunity for your kids to gain the financial responsibility that will help propel them to success later in life.” About Sharon Lechter A life-long education advocate, Sharon Lechter is co-author of the international best-selling book Rich Dad Poor Dad and the Rich Dad series of books. She is a CPA, entrepreneur, philanthropist, educator, international speaker and mother. Over 27 million copies of Rich Dad books have been sold in 50 languages in 108 countries and Rich Dad Poor Dad has been on The New York Times Best Sellers List for 328 weeks. She has been a pioneer in developing new technologies to bring education into children’s lives in ways that are innovative, challenging and fun, and remains committed to education – particularly, financial literacy. A committed philanthropist, Sharon also gives back to the world’s communities as both a volunteer and benefactor. She is an active member of Women’s Presidents Organization and serves on the national board of Childhelp. In 2002, Childhelp honored Lechter and her husband, Michael, as recipients of the Spirit of the Children Award. In 2004, Sharon and Michael were recognized as an Arizona “Power Couple”. Sharon was honored as a 2005 Woman of Distinction by the Crohn’s & Colitis Foundation of America. She serves on the Dean’s Council 100 of the W.P. Carey School of Business at Arizona State University and is also a member of the advisory Board of the Spirit of Enterprise at the W.P. Carey School of Business. MEDIA CONTACT: Matthew Dutile Gordon C. James Public Relations602-274-1988

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