September 28, 2020

Your Money: Too Young for Finance? Think Again

Until recently, however, few people made much effort to get children this age to think hard about money. Why go all pecuniary on a child who has barely mastered counting?

In the wake of the financial crisis, however, and the realization that individuals share at least some blame for the bubbles, a number of people and organizations have taken up the cause of helping the next generation of grown-ups form better habits at an earlier age.

The JumpStart Coalition for Personal Financial Literacy recently expanded its target age group to include the pre-kindergarten set. A new book called “Pretty Penny Sets Up Shop” tells the story of a young girl who sets up a “small mall” in her grandmother’s attic to pay for her grandmother’s surprise party.

And then there’s Sesame Street, which has a broader reach than any nonprofit group, publisher or even the Head Start program. This week, Sesame entered the fray, too, with a series of videos and other material aimed at teaching its audience about spending, saving and sharing.

There is no definitive proof that any of this will make a lasting impact. “It would be 20 years before we would know the results,” said Laura Levine, JumpStart’s executive director, who served on Sesame Street’s advisory panel.

But the beauty of watching young children absorb these lessons and answering their questions is that it can make you more aware of the financial examples you set. Every shopping trip and holiday gift can become a teaching moment about hard choices, patience and generosity.

So here are how the lessons break down:

SAVE The title of Sesame Street’s package of videos also serves to sum up its component parts: “For Me, For You, For Later.” The literal representation of it are the three labels that come with the DVD in a kit that you can pick up free at any PNC Bank, which is Sesame Street’s partner in the project. You can also download the labels and other print materials on the Web; I’ve linked to the Sesame and PNC sites from the online version of this column.

The three labels read “Spending,” “Saving” and “Sharing.” Children are supposed to affix them to three clear plastic jars where they can drop their coins and bills.

None of this is particularly new. In fact, a company called Snigglezoo Entertainment has been using puppets called the Money Mammals for years. They sing about the virtues of saving, sharing and spending, the very same terms that Sesame Street uses.

John Lanza, Snigglezoo’s self-described chief mammal, said he was still processing the similarities and declined to comment further. Jeanette Betancourt, Sesame Workshop’s senior vice president for outreach and educational practices, said it had been aware of Snigglezoo’s (and many other) trademarks around the terms and noted that the words were in wide use. Nevertheless, she added that Sesame used the words in a unique way for its own specific purposes.

But only Sesame has Elmo, and millions of children are very likely to try to mimic his behavior. In the video, he’s trying to save $5 to buy a “stupendous” ball from a street vendor. At one point, he turns down ice cream so he doesn’t lose ground on reaching his ultimate goal.

This moment goes by in a flash, but it is a crucial one. It isn’t easy for a child (Elmo is perpetually 3 1/2 years old) to give up something pleasurable in the moment in exchange for something bigger and better later on.

If you need evidence of this, pop some corn, grab the family, flip on YouTube and search for the (absolutely hysterical) marshmallow tests. Researchers put the confection in front of small children and tell them they can have one now if they’d like, though if they leave it on the table they can have two later on. Then, they leave the room and flip the switch on the camera to see what the children do.

Many devour the marshmallow before the tester even leaves the room, but that doesn’t have to be a permanent condition.

“I think there is a lot about this process that is a learned skill,” said Russell N. James III, who teaches in the financial planning division at Texas Tech University. “It’s like soccer or other physical skills, where you can coach them. And you want to give them opportunities where they can exercise those skills.”

That’s where the piggy banks and the jars come in. And when Mr. James’s 6-year-old daughter coveted the Nook e-reader that her older sister got for Christmas, he told her that if she did not touch the holiday money she had received from her grandparents for 30 days he would give her the rest of the money she needed for the Nook.

“A year would be too long,” he said. “Because you want them to practice a lot and do it several times under different circumstances.”

SPEND This is the easy part for children, at least at first glance. What’s much harder, however, is determining what different things are worth.

Article source: http://feeds.nytimes.com/click.phdo?i=e9dce0d237b4cf529605c9cbd540b656

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