Kids and Money by Jayne A Pearl Book Summary
Kids and Money, Giving Them the Savvy to Succeed Financially by Jayne A. Pearl
Recommendation
Jayne A. Pearl shows you how to give your children financial roots and wings. By roots, she means good financial information, values, and ethics. By wings, she means encouraging kids to be confident, independent financial managers. While Jayne Pearl’s information is thorough, some of it is specific to U.S. taxation laws and economic structures, which makes the book less useful to an international audience. getAbstract recommends this book to parents who are concerned about their children’s financial well being, and to those who need a refresher on good spending habits.
Take-Aways
- Kids face an entirely different set of challenges and circumstances in the job market today than you faced when you were growing up.
- Issues they must learn to manage include: divorce, peer pressure, heavy advertising, and a volatile job market in a fast-paced material world.
- Give your children financial roots by teaching them good values and ethics.
- Give your children wings by encouraging them to be confident, savvy, and financially independent.
- Counter the influence of advertising by watching it with your children and talking openly about its messages.
- Teach them to shop wisely by comparing different brands for quality and price.
- Allowances can hinder rather than help if you have children who won’t do chores out of a sense of responsibility or even for the money.
- Help your children visualize their wishes and set attainable goals.
- Include children in your own financial choices, both successes and failures, even when being honest may feel uncomfortable.
- Be involved with your children as they identify their interests.

Kids and Money Book Summary
Kids Face Complex Financial Issues
Kids face a number of complex issues these days. Divorce causes financial and emotional stress. Advertising bombards them from all directions. Credit card companies recruit them at college and give them too-easy access to large amounts of money. Your children won’t learn adequate financial skills or responsibilities unless you teach them. As a parent, you must guide them through the complexities of the material world. Show your children how to make wise financial decisions. Teach them basic financial skills, including a good work ethic, strong financial values, and sound financial management.
Allowances and Consequences
Allowances may teach kids the value of earning their own money, but they can also have negative consequences. An allowance may send a message that a child shouldn’t do anything just to be kind or helpful. Kids who expect to be paid for chores may “nickel and dime” you for everything you ask them to do. Follow these allowance guidelines to avoid some of these problems:
- Be consistent in how and when you give an allowance.
- Agree with your spouse or ex-spouse on rules about money. Avoid giving your children mixed messages.
- Do not give loans and advances except in very rare, appropriate circumstances.
- Set up clear terms in advance if you lend your children money. Include repayment plans.
- Consider allowances carefully before you equate them with chores, behavior, and grades.
- Give a base allowance without any conditions or strings attached. Put chores under “extras,” or duties they can perform for extra money.
- If you own your own business, hire your kids.
- Encourage them to have an entrepreneurial spirit.
How to Save and Invest
Children should get into the habit of saving money. Teach them how to decide what amount they should set aside from their income. Help them focus on short-term, attainable goals. They can figure out how much they can save in a week, or a month, to get something they really want. Then, they can work up to larger, long-term goals. Post a photograph that represents their goals to keep them enthusiastic about saving. Do not be surprised if your kids’ savings plans go off-course from time to time. In fact, expect a failure or two and use that productively. Try these tips to set up a successful savings plan with your children:
- If your children have difficulty saving money, offer to match the amount they save.
- Make saving fun. Give them a new bank or a coin sorter.
- Share your financial decisions. Tell your children your successes and your mistakes.
- Help them imagine or create a simulated investment in a company that interests them.
- Set up a place for your kids to keep their money. Try a transparent container so they can see the money accumulate or, for older children, open a bank account.
Accountability and Budgeting
To help your kids make a budget, ask three questions: How much will they save, spend, or give to charity? How much money will they earn and spend in an average week? What have they been doing with their money until now? Use these pointers to teach children to keep track of their money, and to create a budget:
- Show them keep how to keep a record of their money, either on paper or with a computer.
- Help them make a budget showing income and expenses.
- Help them track their expenses for a month, so they can see where their money goes.
- Find ways for them to adjust their spending habits or to make more money if necessary.
- To teach your kids a good attitude towards taxes, point out when you use a government service, for instance, the library. Show them how to make use of government services and tell them the benefits they are entitled to receive.
- When they are old enough to get jobs, show them how to plan their taxes.
- Show them the difference between discretionary and non-discretionary income.
Block That Commercial
Advertising bombards kids relentlessly during the average of 25 hours of television they watch each week. You can counter some of the impact of advertising by taking these steps:
- Watch commercials with your kids. Talk about them. Does the food really look like that? Can a shampoo make you happy?
- Teach awareness of what is false and what is real.
- Make a game of conducting your own product tests at home with different brands of the same item. Find out if the advertising claims match your results.
- Show kids how to examine labels.
- Teach them to comparison shop.
The Material World
Children have a huge influence in the marketplace. BusinessWeek estimates that U.S. children younger than fourteen influence $200 billion of their parents’ spending and have $20 billion a year of their own to spend. However, they are not necessarily spending it wisely. To help them cope with the material world, you need to:
- Set limits on what they spend.
- Say “no” when necessary.
- Give and show them the importance of giving.
- Teach them to be responsible with money.
- Be a model for good spending habits.
- Honestly discuss spending issues with them, even if it make you uncomfortable.
- Teach them that not all money is for shopping or entertainment. If they make a significant amount of money, be sure they are saving some of it.
- Demonstrate resistance to impulse spending.
- Wait for sales.
- Use coupons only for products that you would buy anyway.
- Allow them to make their own, small instructive mistakes.
- Involve them in purchasing decisions so they learn to budget.
- Involve them in charitable decisions so they learn to give. Help them identify with good causes. Teach them that volunteering time is as important as giving money.
- Keep your eyes wide open to any possible financial difficulties your child may be having, such as, gambling, shoplifting, or over-spending.
Wings: When Your Kids Leave the Nest
Your children need a sense of financial confidence, independence, and savvy. That will help them succeed in independent living. Age 16 or 17 is a good time to teach your kids how to use a credit card. Put an extra card on your account, so you can monitor what they spend. Or, get them a debit card with limits on how much they can spend from an existing account. Let them participate in evaluating the features a credit card offers. Does it meet their needs? Is there a grace period? What is the interest rate? Follow these credit card pointers:
- If you co-sign for a card, negotiate with the credit card company. As an established adult customer, you may be able to obtain lower interest rates or annual fees.
- Teach your kids that credit is not free. Explain fees and interest. Show them how costs can mount up and surprise them. Show them how to keep track of credit card purchases, save receipts, and review their statements to make sure the bills are accurate.
- Make sure your teenagers keep charge balances lower than 10 to 20 percent of their monthly income.
College Costs
If you plan to send your children to college, it is never too early or too late to start saving money. Although your kids can cover some costs through scholarships or grants, plan on spending cash for at least one-third of college expenses. Don’t be discouraged by daunting amounts; just save as much as you can. When you are finished spending money on diapers or day care, put that amount in your children’s college fund. Keep the savings in your name until the child starts college. Remember:
- The most expensive college is not necessarily the best one for your child.
- To cover costs, you can borrow from your pension or take out a home equity loan.
- Consider community college for the first two years. Community colleges are far less expensive than four-year universities. If your children want to go to a larger institution for their junior and senior years of college, community college credits are transferable.
- Don’t feel guilty about having your children take out student loans. Just be sure they carefully plan the details of their loans. Help them determine what monthly payments they will have after graduation, and what careers would enable them to cover the cost.
Job Hunting
Before, during or after college, your children will enter the working world. You can help them find the jobs that best suit their needs. The job market today is entirely different from when you entered it, so be aware of how the rules and circumstances have changed. Avoid giving advice that might be inaccurate. When your children have big dreams, be careful not to shoot them down. They might not be the next Bill Gates or Oprah Winfrey, but their drive, ambition and role models will propel them to success. Dreams have their practical side because companies today look for passion and enthusiasm in potential employees.
“Financial success is not just the result of how much money a person earns, but how well she manages what she has.”
If your children cannot decide what they want to do, help them create a “job circle” of their interests on a piece of paper. Start with their main interest in the center, then work outward in a circle as you brainstorm possible jobs that match their interests. Identify areas of the job market that have a shortage of qualified people. In terms of constructive guidance, you can:
- Help them practice by setting up interview scenarios.
- Encourage them in their endeavors and discuss any fears they may have.
- Explore career options with your children.
- Encourage them to try work-study programs, internships, and summer jobs.
- Coach them as you would a client. Treat them with respect and work together.
- Help your kids learn about the companies they are interested in advance.
- Self-employment is an option for people with appropriate skills.
- Using the resources in a college career center can minimize the cost of a job search.
- Other resources include employment centers, job fairs, classified ads, the Internet, job banks, and networking.
- Help your children make the connection between the jobs they want and the skills they have, or need to learn.
“How do you glue financial wings on your young slacker who has only vague, if any, plans beyond the college graduation party? You may not be able to inject ambition into your kid’s veins, but at least you can avoid supporting his doing nothing.”
One way to prepare for the job market is the “ready, aim, fire” approach. This is a three-step process of discovery. For “ready,” ask your children to write down all their goals and dreams. For “aim,” help them find and research careers that relate to their passions and interests. And for “fire,” show them how to tailor resumes to individual employers. Customize each resume to a particular job. Avoid fancy and hard-to-read fonts and use key nouns (titles, skills, and experience) that will be noticed. Target only those companies which truly interest your children. Help them prepare for information-gathering meetings as well as job interviews. If they want to explore a field before committing to it, help them arrange an informational interview.
About the Author

Jayne A. Pearl has twenty years of experience as a business reporter and editor. She worked for Forbes magazine and for a syndicated business news program on American Public Radio. She co-launched Family Business magazine and was the editor of Tom Peters’ newsletter, In Search of Excellence.
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