This special series is part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick on a series of short interviews, videos, and tips. In this installment, movie producer and entrepreneur Mark Wolfe, cofounder and former CEO of LeVar Burton Kids (the home of Reading Rainbow), tells Renick some of his childhood money memories and shares advice for teaching kids about money.
Sam X Renick: What is the most important money habit you learned as a child? Please share the story of how you learned the habit. Tell us about the impact it has had on you throughout your life.
Mark Wolfe: When I was young, my mom used to let me help her balance her checkbook and pay her credit cards every month. I had a calculator, which was a very new toy in the 1970s, so I had incentive to use it for something.
What I learned from helping Mom was to pay bills on time every month. Seems like a “duh” lesson, but it was important. I have paid in full everything I owe for all my adult life. I don’t run a balance on my credit cards, and that has helped me get loans and have a great credit score. So always pay your debts!
Further Reading: “How to Get a Perfect Credit Score”
Renick: If you could teach a child only one money habit, what would it be? Please explain why.
Wolfe: Spend less than you earn. If you get an allowance, have fun spending it on fun things, but always save some of it. That way you learn to not spend too much.
Renick: What was your biggest money mistake as a child or a teenager?
Wolfe: Not understanding the value of money. That means I didn’t really know if $10 was a lot or a little money. Once I started working, the statement, “It’s only $5,” suddenly meant a lot more because I knew how long I had to work to get that $5.
Renick: What was one of the smartest money decisions you made as a child or a teenager, and why?
Wolfe: To save and watch the money grow in an account with my own name on it.
Further Reading: “Battle of the Best Savings Accounts”
Renick: A variety of surveys indicate that it’s a challenge for parents to talk to kids about money. What would you say are one or two of the primary reasons parents find teaching kids about money to be difficult? And if you have a suggestion on how they can overcome the obstacle, please share that as well.
Wolfe: Many of us were raised with the notion that money is a private matter. How much we earned as parents was no one’s business but our own. In many ways that’s true.
However, talking with your children about the cost of things and the effort it takes to earn that cost is invaluable.
For many kids, Mom’s and Dad’s work just means they leave the house in the morning and come home at night. That’s true, too. But it also means that outside a child’s vision, hard work happens in order to afford every need, such as food, and want, such as toys. Rather than give your kids an allowance that requires no effort on their part, make even the smallest kids take out the trash, clean the kitty litter, and so on in exchange for the money. Then get them to save for something they really want.
Further Reading: Cary J. Green dishes on the importance of saving.
Renick: Why do you believe there is not more personal finance being taught in schools? Do you think personal finance should be taught in schools? Why or why not?
Wolfe: We still have an antiquated agrarian system of teaching in schools. Back in the days when home life was primarily agrarian-based, kids naturally understood that work equals products equal value equals wants equal needs, because they all worked at home for the good of the family. There was no need to teach that in schools. Schools were for knowledge that they wouldn’t get at home, like history. Now that kids are removed from agrarian teaching, finance and trade/exchange needs to be actively taught at home and school.
Renick: Cambridge University research indicates that adult money habits are set by age 7. What if the research is wrong and adult money habits are formed earlier, perhaps around the age the “give mes” set in? What does this mean for families, schools, and the financial education industry?
Wolfe: Finance should be taught no differently than all the other life lessons that come with every age. Just as manners, responsibility, or homework habits are taught according to the natural ability of a child’s age, finance should be, as well.
Further Reading: Learn about nation-wide efforts to improve financial literacy.
Renick: Are there any additional thoughts you would like to share or questions you would like the audience and me to consider?
Wolfe: If you believe that there is no free ride in the world, teach your kids that lesson early. Hard work is rewarding and valuable.
Have a family discussion and decide on one item in the family budget that you can eliminate or spend less on.
To learn more about Mark Wolfe, check out his LinkedIn profile.