WASHINGTON - April is both the Month of the Military Child and Financial Literacy Month, so it’s a good time to shine a spotlight on teaching children financial responsibility, said Barbara Thompson, the Pentagon’s director of the office of family policy/children and youth in a joint interview with American Forces Press Service and the Pentagon Channel.
"These are life skills that you don't want to learn when you're in trouble as an adult,” Thompson said. “We think financial readiness is one of those life skills that, the sooner you start, the more prepared you are as you enter adulthood.”
Children as young as 3 years old can start learning about the value of money, the importance of saving for something special and how to differentiate between wants and needs, she said.
“When you start to get those perceptions at an early age, it's easier as they grow up to make those decisions, to make wise financial decisions,” Thompson added.
She said statistics on retirement preparation are startling, noting, “People have not been saving at all.”
According to the results of a 2012 survey by the Consumer Federation of America, just 49 percent of working Americans have sufficient retirement savings to provide for a “desirable standard of living.” Just over a third of low- and moderate-income households had savings or money market accounts.
“Right now, it's a tough time,” Thompson said. “We're facing some financial uncertainty, and so it's hard to save. But you have to start small and make it a regular habit.”
Some child development centers, youth programs and schools are using activities to teach children about financial readiness, she said.
“For example, in our dramatic play areas in our child development centers, sometimes they set up a grocery store, and children learn about money and that you have to have money to buy products,” Thompson said. “What's important is that they start to see that money just doesn't shoot out of the ATM machine, that you have to earn it, put it in the bank and then use it to pay for what you think is of value.”
Thompson said learning to save is the foundation of financial responsibility.
"You save for a rainy day. You have an emergency fund [and] you save for something that you want. You don't go into great debt just because you want it right now; you start to save for it, and you do your research before you buy something. I think those are really important concepts,” she said.
“We want to make sure that [children] have good skills for their futures,” Thompson said, “whether it is recognizing their sacrifice or providing them the tools to be strong adults.”
Thompson said a variety of resources are available for educators, parents and children to learn about financial responsibility. Resources include:
- Military OneSource, which offers free face-to-face or telephonic financial counseling, savings and investment information and educational resources for young people
- Personal financial managers at installation family centers are certified financial counselors that can help families develop their budget, set their financial goals and can provide classes for military children at youth centers, child development centers or schools
- SaveandInvest.org can help adults learn financial management skills that they can teach to their children
- Jump$tart provides good resources for educators and bankers
- Financial institutions that operate on military installations are required to offer financial management resources
- Money as You Grow provides information for children ages 3 and up to help them make smart financial decisions
- Military Youth on the Move includes financial tools for younger children, tweens and teens