Friday, April 5, 2013

What does it really take to effectively help children learn the skills they'll need to create financial independence in today's world? One expert says there are some very strong similarities to learning another well-known type of skill.

"Learning a sport always starts with basic skills, which are built upon with practice over time. Whether you're talking about baseball, football, hockey, dance or golf, each sport involves dozens of skills that must be learned and mastered before they become habitual. There are both mental and physical lessons learned, and competence is developed with practice. Money skills work the same way," says Nancy Phillips, mother of two young children, and founder of DollarSmartKids Enterprises. "Personal financial success is not about academic theory, understanding the stock market or complex mathematics. It is about the simple yet critical decisions we make each day, and the planning and understanding behind those decisions. Another crucial factor is the ability for a person to execute their values based decisions under pressure, whether it be from peers, the media or some other source. Learning to make good financial choices requires hands-on experience so children can learn from their successes and disappointments, and apply that knowledge in the future."

Phillips comments on why teaching kids money skills should be like teaching them a sport:

*Both consist of basic skills, or building blocks that need to be practiced and should ideally be mastered before advancing.

*An individual must practice the skills and gain hands-on experience and understanding themselves; no one else can do it for them.

*It's easier to start learning the skills at a young age – there are no bad habits to deal with and no fear of "I can't" or "I'm not smart enough."

*A child has the opportunity to learn from their mistakes so they can improve over time and with practice. "Success breeds success."

*Developing personal and financial responsibility increases the emotional feeling "I'm capable," and helps increase the child's self-esteem and overall confidence. It also significantly decreases the attitude of entitlement.

With these concepts in mind, Phillips created an audio program and workbook for parents to help them teach their children the most critical financial skills according to age and experience, including a visual roadmap to simplify the steps. "Rather than feeling intimidated about all the theoretical concepts we need to teach our children about financial education, we can give a big sigh of relief knowing that what we really need to do is teach simple, age-appropriate, real life skills during daily life."

Repetition, personal relevancy, simplicity and consistency are key, not complexity, says Phillips. "Keeping things simple and fun and based on personal and family values will lead to success through building good habits and memorable learning experiences. The great thing about teaching money skills is that, unlike athletic lessons, teaching our kids these skills is free, and they can be easily incorporated into the daily schedule - no driving or equipment required! These are life lessons that our children truly need to lead happy, fulfilling futures. Millions of parents make the time to take their children to athletic training; we need to be equally dedicated to creating daily conversations and practice times to learn about life success skills including money management. A few minutes a day can significantly impact a child's long-term financial wellbeing and success."

Moms and dads can use the framework and information in the audio program with children as young as preschoolers right through to teenagers. Phillips comments, "parents need to be aware of these universal skills and when to teach them. This way their children have the opportunity to get hands-on practice at key developmental stages."

Some of the topics addressed on the audio include:

*The Number One Trait in Children that Predicts Future Financial Success in Adulthood and How to Enhance It

*Why It's So Important to Start Early, How to Get Started and What to Teach When

*Damaging Mistakes All Parents Should Avoid When Talking about Money

*The Mom Effect

*Values Based Goal Setting

*What to Say to Your Teens During the Credit Card "Talk"

*Habits the Wealthy Use

There are many benefits of these discussions to the parents as well, says Phillips. "They feel relief because they know they are teaching their children critical skills necessary for success and happiness, skills they will use every day of their lives. Parents experience decreased daily stress because there are less requests for money and 'stuff,' and they feel great pride when they see how capable their children are of making their own decisions."

The audio program and accompanying workbook How to Teach Your Children the Most Critical Financial Life Skills is now available globally at www.zelawelakids.com/store/