Teach Kids Money                     Interview with John Lanza - Creator of The Money Mammals

In your opinion, what are the top mistakes parents make when they begin to teach kids money skills?

The top mistake parents make is not starting early or simply not starting at all. I tell parents to just get started on the basics.  Parents often feel so overwhelmed about the prospect of teaching financial literacy because they feel inadequate about their own finances or understanding of personal finances.  We've found that the simplicity of the Money Mammals message can help cut through those feelings and provide a basis from which parents can teach.  In fact, one of my daughter's preschool teachers tell me they began investing in a retirement program right after we did a live show for them. 

The characters of Piggs, Joe, Marmoset and Clara seem to be directed towards a young audience. In your opinion, what is the right age to begin the financial journey and teach kids money values?

You can start introducing your kids to basic messages at the age of two and I believe parents MUST start talking to kids before they enter kindergarten.  Research bears this out as well.  Young kids can get the basics - distinguishing needs and wants, making choices and sharing, saving and spending smart.  These are all topics that we cover in the DVD.

"Save, share and spend smart" is the motto of The Money Mammals. Can you recommend a couple of games that can help reinforce these concepts in young children?

We have terrific new teaching guide with activities and games that is designed to work with the DVD.  Although it's aimed at Kindergarten, 1st and 2nd grade, I've used the framework in preschool classrooms so I know it works and kids love it.  We also have a Kids Club program available at select credit unions across the country that features really fun online games for kids of various ages.  Ask your local credit union if they have The Money Mammals Saving Money Is Fun Kids Club program.  You can even try the games at one of our partner's sites,  http://roguefcu.clubmoneymammals.com.

At Preschools 4 All our philosophy is based on creating childhood experiences that will be meaningful and memorable. Can you recommend one or more activities that can help teach kids money skills?

Sure.  Set savings goals with your kids and make them very visible - paste a picture of the goal on his or her savings jar.  Young kids have a difficult time saving "for a rainy day," but in my experience, once a child is 4-years-old, he or she can save for goal and that can be very meaningful.  My daughter has saved over periods of four to eights weeks for various items, including a scooter.  Always be on the lookout for learning moments too.  When we went to purchase the scooter, for example, it happened to be on sale and my daughter was able to put three of the dollars she had intended to spend on her goal back into her savings jar.  Also make sure you use clear jars so that kids can see the money accumulate. 

Do you believe parents should give monetary rewards to their children for completing household chores? If you feel comfortable, please share with our readers if you use a chore chart with your own children.

Yes and no.  I believe that parents should start their children with an allowance by the time they are four- or five-years-old and I don't believe the allowance should be tied to chores.  Allowance is a tool for teaching kids about the value of money and financial literacy.  A certain set of core household chores (e.g. making the bed, tidying up the room) simply needs to be done because kids are part of the family.  I think it's ok to offer money for extra chores like raking the leaves or mowing the lawn.

How do you feel about giving kids allowance? At what age should parents begin giving their children an allowance?

I think it is imperative that parents give their children an allowance by the time they are five, if not earlier.  Experience with my own kids suggests that three is too young, but somewhere between four and five is ideal.  Allowance is the primary tool they should use to help their kids become money smart.  David McCurrach has developed a time-tested allowance system in his terrific book, Allowance Magic.  I love this book because the system is simple and affordable.  We sell the book on our website www.themoneymammals.com by itself and as part of a Family Financial Fitness kit that includes the DVD and three jars for Sharing, Saving and Spending Smart.  It's very important to set up a three-jar system with clear jars and, at least for the first few years, require kids to put some money into the Save and Share jars each time they receive their allowance.  The balance can go into any of the three jars.  Also, consider some type of matching incentive for any money that goes into the Save jar.  For example, we give our daughter an extra quarter for every dollar she puts in the save jar.  This helps build a behavior of saving and starts to teach them that their money can grow more by saving.

What is the most important lesson parents should pass to their children when they teach kids money values?

I think it's incredibly important for parents to help kids distinguish the difference between needs and wants.  Interestingly, because kids tend to do what you do and not what you say, this involves adjusting your own behaviors as a parent so that you're not sending mixed signals.  For example, if your iPod breaks, don't say, "I need to get a new one," but instead, "I want to get a new one."  As much as we might enjoy some of our gadgets, most of them are still wants, including iPods.    You can read more about my thoughts on financial literacy on my blog, http://teachkidsmoney.blogspot.com.

What is the most important personal lesson you learned about money? Did you learn it from your parents?

My grandfather grew up in the depression and took me aside in my early twenties and said, "If you understand the power of compound interest and live beneath your means, you'll be fine."  I wish I had heeded his advice much earlier, but I suppose it's better late than never.