Children & money management: Spend some, save some and share

I don’t know about you, but I’ve been talking to my kids about the economy more in the past few months than I ever have before. Call it a crisis, a recession, a downturn of monumental proportions, the economy is taking a toll on all of us.

As difficult as these times are, we can use them to teach our children to be financially savvy and responsible, said Alex Mazloom, a father of two and the co-founder of Mind Treasures, a San Diego-based nonprofit that teaches money management to children as young as 5.

Mr. Mazloom’s message is a simple one: Spend money responsibly, Save it methodically and Share some with those less fortunate.

It was the last S - Sharing - that really caught my interest. Mr. Mazloom combines financial literacy with character education. Having one without the other is simply not enough, he said, regardless of whether you are talking about one person or the entire worldwide economy.

“We need to raise a generation that wants to be financially independent and then use their wealth to the benefit of humanity,” Mazloom said.

What better place to begin living responsibly than in our own homes.

Mind Treasures’ lesson plan is filled with words like moderation, patience, thankfulness, truthfulness and generosity. Students in Mr. Mazloom’s classes are asked to write down their virtues and describe how they can help them make wise financial decisions.

He also talks about the power of money. He likes to compare it to chocolate, telling students they can eat their chocolate all at once and wind up with a massive tummy ache, save all of their chocolate and get no enjoyment from it, or eat some, set some aside for later and share some with others.

Mr. Mazloom believes the best way to teach a child about money is to give him an allowance, one that fits your family budget, and then teach him to handle his money wisely. Do not tie the allowance in with doing chores. Kids need to learn to help around the house without pay, he said.

Rather than just giving your child money and letting him do with it what he pleases, here’s what Mr. Mazloom recommends:

Spend: Teach your child to keep half his allowance to spend if he wants to.

Save: Teach him to set aside some money for something he’d like to purchase.

Once he’s decided on what he wants, try to find a picture of it for him to keep as a reminder of why he’s saving for tomorrow rather than spending today. Find out how much the item costs, how much he wants to save and determine how long he’ll have to set money aside. Put the money in a piggy bank or savings account until he’s amassed enough. (Once children reach their pre-teens, Mr. Mazloom said they also need to learn about investing and then set aside money for that purpose.)

Share: Teach him about the importance of helping those less fortunate. Let him pick a charitable cause he’d like to get involved in, then decide how much money he’d like to donate. Of course, you and your family can go much further than is if you like. Mr. Mazloom said he and his wife have taken their two sons to Mexico to help build homes for needy families.

If all of these principles sound as if they are from a different era, they are. The impetus for starting the nonprofit was a conversation Mr. Mazloom and his wife, Nazilla, had several years ago about why so many people were drowning in debt.

Mr. Mazloom said he came here from Iran in 1986 with $160 to his name. His wife arrived with less than $200. Both finished college in 1991 debt free and even managed to put money away for a down payment on a house. Mr. Mazloom is an electrical engineer by training and works as a chief financial officer for Rapid Bridge, a microchip design company, while Mrs. Mazloom quit working to raise their sons.

Even during an extended period when he was out of work, Mr. Mazloom said he and his wife did not have to dip into savings. As they talked about their situation, they realized their financial decisions had been heavily influenced by their parents’ advice to work hard, live within their means, save for tomorrow and share with others.

Mind Treasures also has a for-profit side that offers workshops and one-on-one financial management advice.

Mr. Mazloom has taught enrichment courses at schools in San Diego County; the curriculum is approved by the California Department of Education. The lesson plan is also being taught at International School of Beijing, he said.

Mr. Mazloom is offering his seven-week course to a group of preteens at the Jacobs Center for Neighborhood Innovation in San Diego. The children each received a treasure box divided into four sections for saving, spending, sharing and investing. They use play money to put the principles they are learning into action. I visited the class the other night. It should come as no surprise what the students are saving for: cellphones, iPods and video games.

For more information on Mind Treasures, go to mindtreasures.com.

Here are some additional suggestions from Alex Mazloom:

Responsibility: Even young children can learn responsibility by helping out around the house. Assign chores, perhaps making their bed, cleaning their room or taking out the trash, and expect them to complete the chores to the best of their ability.

Moderation: Take your kids grocery shopping and have them help draw up a balanced shopping list before heading to the store. This will help them resist the temptation to buy unnecessary items.

Thankfulness: Teach your children to count their blessings. Have them create a list what they are thankful for. Then decide which ones they must have and which they could live without.