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HELP YOURCHILD
AV
OID
FINANCIAL PITFALLS
D
OES TEACH–
ING
good
money hab–
its really matter?
How can you train
your child to better
manage bis or her
finances?
) n 19 8 1, po 11 s ter
Lester Rand of the
Rand Youth Poli found
that there has been a
steady erosion of a sim–
ple but vital monetary
habit called thrift:
making one's money
work its hardeSt.
Says Mr. R and:
" Our young used to be
told that a penny saved
is a penny earned, and
to save for a rainy day.
That is not the pervad–
ing philosophy today.
Young people in this country [the
U.S.) are being
raised
to
spend"
(emphasis ours).
In the 1981 poli, Rand found
that 65 percent of the 3,091 teens
he interviewed nationwide seldom
or never heard thrift discussed in
their homes. Only 25 years earlier,
a similar poli revealed that 69 per–
cent felt that thrift was mentioned
"a great deal" in their homes.
U .S. teenagers in 1980 spent
nearly $40 billion for records ,
tapes, cosmetics, stereos and other
goods and services. Mr. Rand's poli
revealed that 69 percent of these
teenagers felt that they were gull–
ible as consumers. Many found that
the purchases that they made were
simply unwanted later on. On the
other hand, only 41 percent of the
teens surveyed in 1956 considered
themselves gullible.
April
1983
by
Dan C. Taylor
What 's behind this change in
attitude? Part of the answer is an
inflationary psychology that was
built up worldwide over the past
half decade. In essence, teens- like
many adults-have developed a
spend-i t -now-because-it-won't-buy–
as-much-tomorrow mentality.
Its more basic roots lie in the
home with the parents' example or
lack of it. This is reAected in another
of Rand's questions. When asked if
their parents are thrifty, .67 percent
of today's teens in the United States
said no.
1
n 1956, 56 percent felt that
their parents were thrifty.
A major part of being frugal
involves wise budgeting. Budgeting
is merely estab1ishing a fixed- and
priority-spending framework.
One priority in any budget
should be savings. Mr. Rand's poli
results on the question of parental
thrift reveal a lot about
U .S. parents.
r
n a comparison of
savings as a share of dis–
posable personal income
in 1981 , the American
saver saved the least of
the six nations com–
pared. The average
American only saved
5.3 percent of his dis–
posable income, com–
pared to 10.9 percent
for the Canadian , 14.2
percent for the Briton,
14.9 percent fo r the
West German, 16.1 per–
cent for the Frenchman,
and 19.4 percent for the
J apanese.
The problem be–
comes worse when you
add another set of statis–
tics. In 1981 in the
U.S., 456,514 individu-
als filed for bankruptcy.
More than $6,000,000,000 was left
unpaid to creditors.
Couple poor savings habits with
the impulse buying habits that per–
vade U.S. consumerism and throw in
general money mismanagement, and
it is easy to see why the example put
forth by American parents does not
instill thriftiness in children.
How, then, can you teach your
children about managing money in a
way that will stand them in good
stead for the future?
Even while your children are
small- 3 to 6 years old- you can
begin teaching them about money.
On this point , the words of Solomon
ring t rue: "Train a child in the way
he should go, and when he is old he
will not turn from it" (Prov. 22:6,
N IV).
Take your children along with
you when you go shopping. Explain
37