Parents and teachers often believe that financial education is not important for young people until they reach 11^th or 12^th grade in high school. While this might seem logical, consider these facts from a 2007 article by Marketing Charts that says, according to The Teens Market in the U.S. report by Packaged Facts:

• Teen spending was $189.7 billion in 2006 and would be $208.7 billion in 2011. This is despite a 3 percent decline in the 12- to 17-year-old population over the same time period.
• 12- to 14-year-olds have an average annual income of $2,167; teens in the 15- to 17-year-old age group generate an average annual income of $4,023.

While this accounts for the pre-teen population, what about preschoolers and elementary-age youth?

According to estimates in The Kids' Market, a report from market-research publisher Packaged Facts, U.S. children, aged 3 to 11, held a collective $18 billion in purchasing power in 2005. The report projected that the kids' market would see significant growth over the following four years, reaching $21.4 billion in [discretionary spending] "disposable income" by 2010. This means that even our young children are involved in high amounts of consumerism in today’s society.

A CBS news article also writes that “kids have huge control over the flow of parents' spending, statistics show: 8- to 12-year-olds spend $30 billion of their own money each year and influence another $150 billion of their parents' spending.”

These facts underscore how important it is for young people to learn good buying, spending and saving skills. Businesses tailor a great deal of their marketing to young people, especially children, so equipping them with the tools to understand money, how it works and how to be a smart consumer and saver is an important practice. The truth is that young people have access to a great deal of money throughout their “growing-up” years and, like eating, exercise or study behaviors, can set financial habits that will either benefit their future lives or cause challenges when they are adults.

There are simple ways to help them develop positive money-management behaviors, too! For instance, you can help children understand money-management principles through an allowance. The allowance can be placed in three categories: savings, personal use and sharing/donating. These are the three big “S” words to teach youth: Saving, Spending wisely and Sharing.  (Investing is often a fourth component to teach, as well.) Many more ideas on how to teach financial education to the young people in your life can be found in various MSUE news articles and on the Michigan 4-H Money Management site.  Start today—it is a wise investment!