Allowance Expert Warns Parents that Financial Literacy Alone Will Not Help Children Avoid Mistakes

April 2, 2009 - PRLog -- (New London, WI, April 2, 2009) – No one can predict the financial future. As parents look at the fallout from the current economic turmoil they see troubled economic times ahead for their children. But when everyone is perplexed as to what to do, how can parents prepare their children for what lies ahead?

In today’s economic climate, it is even more important for our children to grow up to be financially independent as adults. Children who learn to manage money will be able to survive in an uncertain financial future. Parents who help their children learn financial competency through hand’s-on practice at home will not need to bailout their adult children, thus protecting the parent’s own savings and retirement funds.

The author of "The No-Cash Allowance" (http://www.walnutrow.com/), a Mom's Choice Awards® Recipient, Lynne Finch shares her thoughts on the topic, " We somehow believe that teaching financial literacy will save our kids from economic pitfalls. Knowing about financial matters will not help our children learn to manage their own money. " Also adding that, "Literacy is knowledge. Competency is skill. Financial competency requires practice, something that cannot and does not happen in the classroom, simply because children don’t own money in the classroom. To become competent in managing money a child has to practice with real money."

Lynne challenges parents to transfer to each child a regular amount of money. She advises parents to say to their children, “This is your money. You are responsible for certain expenses. And, by the way, if you manage your money well you’ll have more to spend for fun. You are in total control. You will make good and bad decisions and sometimes will wish you had made different choices. As your parents, we can offer advice if you want it but don’t look to us to bail you out. Learning to manage money is an important responsibility.”

“Parents need to give up control,” said Lynne.  She reminds parent to remember when they removed the training wheels from the bike. Parents expected some falls and scrapes, but with practice they knew their child would succeed. She continued, “However, when it comes to money, most parents won’t or can’t give up control. Just like learning to ride a bike, your kids will not learn how to manage money as long as you remain in control of money decisions. “

Managing money is a combination of knowledge and practice. One without the other is ineffective. The ability to control one’s money provides the power to make choices. “The No-Cash Allowance” gives parents the guidelines they need to set up an allowance system where kids can put financial literacy (knowledge) to practical use so they can develop financial competency (skill.) She concluded, “When our children develop financial competency through hand’s-on practice, they will be ready to navigate the economic challenges that lie ahead.”

About Lynne Finch

Having published "The No-Cash Allowance" in 2004, the advice she shares is still going strong. In 2006, the Mom's Choice Awards® (http://momschoiceawards.com/) made Lynne a Mom's Choice Awards® Gold Recipient.  The seal that they give to products they find to be family-friendly and of a good quality is what separates "The No-Cash Allowance" from other books on the market.

Not just an author, Lynne also appears frequently on "Money Sense" which can be found on station WISN AM 1130 in Milwaukee.  She also writes an article for their quarterly newsletter (http://www.ellenbecker.com/newletters.html).

Contact:

Lynne Finch, author of
"The No-Cash Allowance:
A Practical Guide for Teaching Your Children How to Manage Money"
http://www.walnutrow.com/
E-mail: LynneFinch@walnutrow.com
Phone: 920-982-1475
P.O. Box 25
New London, WI  54961

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Walnut Row creates books for children, books for life. “The No-Cash Allowance” by Lynne L. Finch is a parenting book that received a national award. This book provides a hands-on financial education for children.