Q&A WITH SHANNON RYAN, CFP®
Financial Advisor, Mom and Author of “The Heavy Purse”
What is so newsworthy about children’s financial literacy?
The root cause of the latest financial headlines—the average household carrying more than $7,000 in debt, 57 percent of children living below the poverty line, and household savings rates hovering around 3 percent—is a lack of education about prudent money management. While many of our nation’s financial woes are beyond the control of one family, every parent has the opportunity and obligation to teach their kids how to save, spend and share their money wisely.
Where did your passion for children’s financial literacy come from?
At age thirteen, my father began teaching me about money. He not only taught me how to save, spend and share my money, but he also taught me that money is emotional. Many people live their entire lives with negative thoughts and habits around money. He taught me that “money smarts”, as he would say, comes from our ability to create joy for ourselves and others by using our money in alignment with our value system.
What is reasonable to expect a child to understand about money?
It is my belief that kids begin to understand money around age three by watching their parent’s habits with money. They may not know that four quarters add up to a dollar or what that dollar can buy, but they start picking up on your emotions around money. One of the first places this occurs is in a store when Mom says, “No. No. No. You can’t have that today because we don’t have enough money.” Now you’ve planted a seed of fear in your child, and they begin worrying about money. Will we have to move out of our home? Do we have enough money to buy groceries? Their emotions around money form at a young age, and we need to help shape how they view money.
What is the process that you developed with your kids?
The concept of save, spend and share is simple yet effective. I taught my daughters every time they earn or receive money they have three choices to make: they can save it for something really special; they can spend it on something right now; or they can share it with someone they love. Every year, they set save, spend and share goals, putting them in control of how they use their money which eliminates most store aisle tantrums. They still see things they want in the store, but most often decide whatever they just saw is not worth forgoing their original goal. I still get a kick out of them making their own decisions, owning it and not having to say no all the time.
Do busy parents really have the time to teach their kids?
Over the last 20 years, I’ve spoken with a lot of parents. The issue they face is not time. They are scared to teach their kids about money because they don’t know how. That’s why I wrote “The Heavy Purse”—to help take some of the weight off their shoulders. Teaching children about money doesn’t need to be scary or difficult. In fact, it should be easy and fun. Parents would never say that they are too busy to teach their kids how to read. Yes, it’s tough, but we make it fun! Using my book, “The Heavy Purse”, parents can start these conversations with a fun picture book and bedtime story.
What do you suggest schools do to change the problematic trend?
I would love to see financial literacy become a part of our school curriculum as our children are failing in this area. A study conducted by The National Financial Capability Challenge indicated that high school students are receiving a D+ in financial literacy. The study, now in its third year, annually tests 80,000 students on bank accounts, credit cards, taxes, and other age-appropriate financial concepts. Unfortunately, with more programs being eliminated than added, it’s unlikely that financial literacy will be integrated into our schools. It will continue to rest on the shoulders of parents, which is why I wrote “The Heavy Purse”. At our website, www.TheHeavyPurse.com, I’ll be blogging and posting videos to help parents teach their children how to handle money.
What’s next for you, Shannon?
I’m developing a Facebook/YouTube community where I’ll post short video lessons to teach parents how to implement save, spend and share into their families. More importantly, I want to give parents a place where they can connect with one another and share their troubles and successes.
ABOUT SHANNON RYAN
Shannon T. Ryan, CFP® is a noted financial advisor, author, mom and committed advocate for financial literacy. She has helped families in Manhattan Beach, California for over 20 years in finding the most productive ways to invest money for short- and long-term goals, managing the finances of small businesses, and developing retirement income strategies. Children’s financial literacy, though, has been Shannon’s passion for years. She has just released the title book in the series, “The Heavy Purse,” meant to help families start a conversation about money management and goal setting.