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When It Comes To Money Advice, Tried-And-True Is Best

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The Tampa Tribune

Published: September 23, 2007

KANSAS CITY, Mo. - For more than seven years now, I have relied on a trusted companion just an arm's length away to help me decipher some of the complexities of children and money.

It's my sun-faded, hardbound copy of 'The Time-Life Book of Family Finance,' circa 1969.

This encyclopedia of money matters - a collectible on Internet auction sites - has had a permanent place on my bookshelf ever since I started writing this column.

The book was a gift from my neighbors. It had served them well over the years, and they thought I could get some use out of it because it included a section on allowances, saving and college tuition.

I'm happy that it found a new home. Despite its advanced age, the 430-page reference tool still offers thoughtful advice about how to help children develop money smarts.

It reminds me that while the dollar signs have ballooned over the last 40 years on the college tuition lug, and the savings options and tax technicalities have multiplied too, much of the basic advice still rings true.

'The Book of Family Finance' was one of the bibles of personal money management before the explosion of self-help books by Wall Street hotshots and the like, and long before the Internet became a font of information just a few keystrokes away.

In some of my head-scratching moments, I'll peek at the 'Book of Family Finance' for a reminder of a key point or two that needs to be made. (For the record, I also keep a more current reference tool - 'Kiplinger's Practical Guide to Your Money' - on my bookshelf.)

In terms of style, the 'Book of Family Finance' is not flashy or written with attitude and wit. Its forte is context and common sense advice in step-by-step chunks.

Let's start with the author's suggestion on how preschoolers can develop healthy attitudes about money before they even learn to count: 'In the early years, children form attitudes toward money and habits of handling it that will do much to determine whether they grow up to be responsible members of the family ... or extravagant and always in need of a bit extra.'

How can parents help bring out the best money skills in their 3-year-old?

Start with the supermarket, the authors said. 'Give your child a nickel to spend and explain that it will buy a piece of candy, or a toy, but not both. Money management involves choices.'

The chapter on children and money addresses the college crunch and how badly many families 'neglect plans' for paying for higher education. Hmmm. Parents decidedly unthrifty?

It also looks at options such as junior colleges, work-study programs, and tuition installment payment plans to keep families from going too heavily into hock on the college tab.

'Though borrowing is justifiable and economical, it should not often be necessary - if some starting funds have been laid in earlier years. Being prepared to pay for college, as much as solving any other financial problem, depends on careful, long-range planning and difficult decisions on personal values.'

Of course, the selection of financial products available 40 years ago to build a college nest egg - think stocks, savings accounts and U.S. Savings Bonds - were limited. But the book's advice about living within your means and using credit cards carefully should be heeded today.

I think everyone should keep a trusted source or two handy when they need advice on thorny money issues with children. I'll stick with the 'Book of Family Finance.'

Columnist Steve Rosen can be reached at (816) 234-4879 or at The Kansas City Star, 1729 Grand Blvd., Kansas City MO 64108.

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