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Kids learn $$ facts at home

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Just when I think I've handled every possible question on the subject of kids and money, someone throws me a curve.

Recently I heard from Jennifer Radcliffe and Paula Caballero, two reporters for the Fort Worth (Texas) Star-Telegram, who were writing a story about financial education in public schools. A number of parents had expressed reservations about the idea.

"I'm very leery of someone else coming in and teaching my children about that," said one mother.

"It's kind of like sex education," said a dad. "It's a loaded gun."

What did I think about those responses, the reporters wanted to know.

My initial reaction was surprise. Most reports I've seen indicate that parents overwhelmingly support some type of financial education in the schools. But I had to admit I could understand the parents' concern. Money is a loaded issue, and parents may question whether teachers will emphasize what they consider to be appropriate values.

But parents needn't worry. As I told the Star-Telegram, there isn't enough financial education going on in the schools to pose a threat. Surveys show that, by wide margins, kids say their parents are their primary source of information about money.

Besides, kids have so many gaps in their knowledge that even small lessons from teachers and parents could yield a big payoff. And both schools and parents share an interest in teaching kids about deferred gratification, planning for the future and responsible spending.

Schools have the advantage of being able to use a classroom situation to explain such concepts as compound interest, life insurance and pensions, or to play a computer-based stock-market game. Any interactive tool scores points with kids.

For example, a friend of mine had great success teaching high school students about the cost of living by letting the kids compare how much they'd have to earn in different cities to maintain the same lifestyle — see the salary calculator at Homefair.com.

Parents, on the other hand, have an edge when it comes to teaching day-to-day money-management skills and focusing on their own family's values, whether that means long-term investing or giving to charity.

Have a question about kids and finances for Dr. Tightwad? Write to Dr. T at 1729 H St., NW, Washington, DC 20006. Or send the good doctor an e-mail message (and any other questions for this column) to jbodnar@kiplinger.com.