Giving Kids a Head Start on Financial Success

First, learn the basics. Then set a good example for your children.

Laura Levine is executive director of Jump$tart, a national coalition of organizations dedicated to improving the financial literacy of pre-kindergarten through college-age youth.

Do Americans have a good handle on their personal finances? The financial crisis opened consumers' eyes to how much there is to know and how important it is to pay attention. Many consumers took on obligations that they didn't fully understand, with a false sense of security that if the product was legitimate and the company well-known, nothing could go wrong. We need to protect consumers better, but consumers also need to be better educated.

What can individuals do to improve their financial literacy? It's their responsibility to learn the basics: Make savings a priority. Pay off debts. Do your research before making financial decisions. Seek out an adviser. Also find out as much as you can about the source of financial advice to see whether it's trustworthy. I don't think a financially literate consumer is necessarily an expert in all areas of finance. A financially literate consumer understands the basics and knows when to ask questions, where to get more information and when to get help.

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How can parents train kids to be financially savvy? Parents should talk to kids about money. Those discussions will vary, depending on the age of the kids and the comfort level of the parents. We don't have to reveal our complete financial statements to children in order to have a meaningful discussion about how some of our household decisions are made. The most important thing is to set an example. Even if we've made mistakes in the past (and who hasn't?), we can vow to do better, starting now. This can be as simple as creating a budget and trying to live within our means, or consciously setting aside savings. Kids of all ages will pick up on the effort.

Besides Kiplinger's, what are some good resources people can use? offers free, noncommercial resources. The clearinghouse at, for young people, reviews materials before listing them. Sites run by organizations that confer professional designations, such as Chartered Financial Analyst and Certified Public Accountant, can give consumers a sense of the advisers they might be using.

Jennifer Schonberger
Staff Writer, Kiplinger's Personal Finance