Hope for Our Hopeless Financial Future

Physician's Money Digest, May 2007, Volume 14, Issue 5

Debt. Bankruptcy. Workinguntil the grave. Isthis the legacy that weare leaving our children?Financial literacyin the United States is deteriorating ata fast pace. And future generations willnot only carry the burden of parentswho can't take care of themselves,colossal educational loans, and a governmentthat has not protected programssuch as Social Security, but willalso meet these obstacles with little orno financial education.

Help Is on the Way

Physician's Money Digest

In 's continuingeffort to highlight financialfirms that strive to make a differencein the community they serve, we haverecently had the opportunity to discusswith A.G. Edwards representativesthe impact of their "Nest EggKnowledge for Kids" initiative, whichaddresses the crucial need to improvefinancial literacy among Americans,particularly children.

According to Justin Gioia, vice presidentand director of investor relationsand corporate giving for A.G. Edwards,the seed for this nationwide programwas planted in the St. Louis, Mo-basedcompany's "own backyard." This firstventure into the financial education ofchildren was aptly named "MoneyDoesn't Grow on Trees" and took placeat The Magic House, St. LouisChildren's Museum. After the success ofthis first initiative, A.G. Edwards decidedto expand the program, pairing upwith 17 museums across the countryand providing grants and volunteers.

Hands-on Approach

Although the program varies frommuseum to museum, it often begins inthe classroom, where teachers distributeand go over materials donated by A.G.Edwards that prepare the children fortheir interactive expedition at the museum.According to Christy Ziglar, afinancial consultant at A.G. Edwards inAtlanta, Ga, their variation on the programis titled "Pay Day, Play Day" andinvolves second graders receiving a $5"paycheck" in play money on theirarrival at the museum. The children arethen asked by the museum guides if theyrode the bus to the event and if theyplanned on eating lunch. The children,of course, answer in the affirmative andare disappointed to realize that theyhave to pay for such services with theirplay money. This is their first lesson intheir journey toward financial literacy.

The children are then asked if theywould like to save some of their moneyfor the future. Despite their unexpectedlydwindled finances, most of thechildren say "yes." "We've been pleasantlysurprised that most of the kids dowant to go ahead and save," Ziglarrecounts. Then, with their depletedfunds the children are led from roomto room and visit banking stationsmanned by A.G. Edwards volunteers.At these stations, the children areoffered items that they can buy withtheir remaining play money.

The volunteers do their best to convincethe children to buy, challengingtheir decision-making skills. Throughthis activity the children realize thatthey have limited funds and have tobudget and prioritize. As an addedtwist, once the children leave a room,they cannot reenter it, so if they passon a purchase they cannot go backand revisit it. This reinforces theirneed to make a decision. "There's alwaysthat moment where they gofrom the excitement of this handful ofcash to realizing the responsibilityinvolved in the decisions they make," Ziglar says.

Furthermore, the children's interactionwith the volunteer bankers givesthem a chance to speak with real financialprofessionals and encourages themto ask questions. Just talking aboutsaving and spending is a huge step formany of the participating children.They enter the program knowing thatmoney can buy them things, but theyleave realizing that spending moneyrequires planning and discipline. Theselife lessons can have a major impact ontheir future financial well-being.

A Number of Reasonsto Volunteer

With personal debt already spiralingout of control for so many Americans,there has never been a more importanttime to instill strong financial values inour youth. The following statistics painta grim reality for what today's childrenface in terms of financial education:

•Only 53% of US parents have everdiscussed saving and investing withtheir children.

•Two in five parents of 6-to 17-year-olds cite their child's age as a reasonthey have not discussed saving andinvesting with them, with 40% sayingtheir children are too young to understandor worry about it.

•27% of these same parents saidthat it never occurred to them to discusssaving and investing with their children.

•While 42% of parents have helpedtheir children open a savings account,only 19% require them to put a portionof their allowance in savings.

•According to the Federal Reserve,as of November 2006, Americans heldmore than $872.6 billion in revolvingcredit card debt.

(Source: The A.G. Edwards Nest Egg ScoreSurvey, conducted in March 2006by Harris Interactive)

The following are a list of museums participating in A.G. Edwards' "Nest Egg Knowledge for Kids":

•Boston Children's Museum (Boston, Mass)

•The Children's Museum in Oak Lawn (Chicago/Oak Lawn, Ill)

•The Children's Museum of Cleveland (Cleveland, Ohio)

•Children's Museum of Houston (Houston, Tex)

•The Children's Museum of Memphis (Memphis, Tenn)

•Children's Museum of Richmond (Richmond, Va)

•The Children's Museum of Seattle (Seattle, Wash)

•Cinergy Children's Museum, Cincinnati Museum Center (Cincinnati, Ohio)

•Fort Worth Museum of Science and History (Ft. Worth, Tex)

•Garden State Discovery Museum (Cherry Hill, NJ)

•Imagine It! Children's Museum of Atlanta (Atlanta, Ga)

•The Iowa Children's Museum (Coralville, Iowa)

•Kidspace Children's Museum (Los Angeles/Pasadena, Calif)

•The Magic House, St. Louis Children's Museum (St. Louis, Mo)

•Miami Children's Museum (Miami, Fla)

•Port Discovery, the Children's Museum in Baltimore (Baltimore, Md)

•Stepping Stones Museum for Children (Norwalk, Conn)