Teaching Kids (and yourself) About Money

Not Your Parents’ Money Book by Jean Chatzky

 
Now that it is holiday season it’s the perfect time to teach kids about giving and money management. Most books about teaching kids about money are written for adults. But, Jean Chatzky wrote Not Your Parents’ Money Book: Making, Saving, and Spending Your Own Moneyfor children.
 

You will recognize Jean Chatzky as the financial editor for the Today show and frequent contributor to other talk shows and media. She draws on her expertise in personal finance, as well as research from a series of focus group interviews with middle school students, to write this crash course in economics and finance for children.
 

Many reviews of the book recommend it for young pre-teens and teens (about 12-years-old to 17-years-old) but my eight-year-old charge is reading it. Interestingly, the information at the end of the book, especially on how to spend smartly, how to use credit cards and debit cards correctly (avoiding high interest rates), investing, introducing stocks, bonds, and mutual funds, are lessons many adults have not yet learned. So, you may even learn a little when reading this with your charges.
 

The first chapter opens up the book by describing the economy at large, and particularly how the government influences the economy, from printing money to the basics of the Federal Reserve.

Chapter two looks closer at the basics of individual money management, noting some basic tips to do financially well in life.

Chapter three starts to cover the basics of earning money, from the importance of higher education in increasing your income prospects to the realities of taxes when you get into the work force. There’s also a list of possible ways for the target population to earn money besides baby sitting.

The fourth chapter looks at some of the ways young people can spend money after they make it, and includes ways parents can monitor the allowance they give their children. It also includes a table listing the average income for numerous professions.

Chapter five discusses how to spend less than you earn, providing ways to help control your wants and emphasizing the importance of saving.

Chapter six discusses the basics of banking, covering some of different types of banks, and similar organizations. It also provides some basic instructions on how to balance your checkbook.

The seventh chapter covers how to spend smartly, including how to comparison shop and other methods of saving while shopping. There’s also an introduction to credit cards and debit cards, both things people are using when they are younger and younger. There’s also a few warnings about gift cards, particularly the fact that they expire pretty quickly.

Chapter eight provides a crash course in investing, introducing stocks, bonds, and mutual funds, as well as providing some basic advice on how to invest given your time frame for needing the money.

Chapter nine finishes off the book by talking about the emotional aspect of money, particularly how it can drive people so crazy.

The book finishes with some advice on how to give back to charity. There are a few appendices at the end, including the history of money, how money is made in the U.S. today, and a glossary of terms used throughout the book.

I highly recommend this book for a brief, simple, easy-to-read and easy-to-understand resource for teaching youngsters (and some adults) about money.

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