May 2009
4-H Extension Corner

Financial Lessons for a Lifetime


Through the 4-H “$15 Challenge,” this young man from Pickens County has learned it doesn’t cost much to put together a stylish and comfortable wardrobe.


The Great Depression had a powerful impact on the economic habits of America’s "Greatest Generation," the men and women who came of age during World War II. Although we pray our current economic downturn will be a mere shadow of events of the 1930s, it is still having a dramatic effect on Alabama families. College and retirement savings have been severely diminished, job security has been challenged and many of our basic financial assumptions have been overturned.

4-H and Cooperative Extension have strong roots in the Great Depression. During the era of the family farm, we helped put food on Alabama’s tables by teaching the science-based approach to food production and preservation. For those of us who appreciate historic 4-H, it is clearly time to dust off those old gardening skills. Home-grown okra and heirloom tomatoes can be foundations for tasty, nutritious and economical meals. And rabbit, farm-raised fish and goat are finding places alongside traditional meats on Alabama menus. As my colleague Luci Davis has pointed out, 4-H and the Junior Master Gardener can be great resources in helping young people develop these resources.

During these tough times, 4-H and Extension can offer important support to Alabama families and youth. Your county Cooperative Extension Office has a variety of information on financial management. Many counties offer workshops directed toward family finances. 4-H has excellent educational programs on personal finance and being a savvy consumer. And one of the coolest new 4-H events is called "The $15 Challenge," in which young people hit garage sales and thrift stores in an effort to put together a stylish outfit on a shoestring budget.

Remember 4-H is itself one of the best bargains around. Membership is open to all Alabama youth in kindergarten through 12th grades. Membership is free, and all events and activities are either free or extremely inexpensive. For example, 4-H Summer Camp ( costs less than a trendy pair of athletic shoes and provides an experience kids will remember all of their lives.

Many Alabama young people learn about finances through their 4-H animal science projects.


There are, of course, important things parents and families can do to turn these tough times into lifetime economic lessons. Young people naturally tend to be fearful during times of stress or change. If the family is facing some rough spots, parents should make an extra effort to keep their kids informed. Involve them in budgeting, saving and reducing expenses. Just as important, every family can use this as a time to evaluate and discuss family values regarding materialism, helping others and deciding what is most important in your family’s lives.

Adults should serve as good examples of thriftiness and good planning. Even in flush times, it’s important to:

- Spend less than you earn.
- Avoid excess debt.
- Improve your credit worthiness.
- Plan for tomorrow while keeping pace with day-to-day needs.
- Save and invest regularly.
- Protect your financial identity.

Ages and Stages of Financial Education


4-H Summer Camp is a great bargain for Alabama families. The $85 fee includes housing, meals and fun-filled activities.

In 4-H, we are real sticklers for "age appropriateness," making sure kids learn at a level they can understand and appreciate. That holds true for financial education.

During the ages of two to four, children are absorbing information like "little sponges." You should let them see you shop, and maybe have them hand the clerk the money for small purchases. Have a piggy bank, and make a big deal about their saving for some future purchase. Let them start learning to recognize the value of coins and cash, like counting out pennies for example. They love to play store, so have pretend games where you and they buy and sell things.

From five to seven, children are ready to deal with small amounts of money and they begin to get the concept of credit. Around school age, kids should handle money on a regular basis so they get comfortable with cash. It may be time to start a small allowance with rules on what the child needs to pay for and how he or she might save. At this age, they begin to understand shopping for value, comparing the prices on toys or food. They also need to become familiar with credit cards, ATMs, on-line purchases and the relationship to bills and banks.

At eight to ten, children become increasingly interested in where money comes from, where it goes—and how to save it. Help them begin to see how their family earns money and start to introduce the notion of them taking on tasks for income. Let them get a sense of the family’s general expenses and income. This will provide an opportunity to start considering the difference between wants and needs. They can open their own bank or credit union account to start savings. Talk with them about how and why you (and they) can support the food bank or other worthy organizations in your community.

Pre-teens face pressure to follow fads. Offer them increasing independence in making financial decisions, but you should continue to provide insight and advice and you are still their role model. You will wish to increase their allowance, but also increase the child’s responsibilities for what they purchase. They will begin to learn about interest and some will begin to explore the notion of long-range investments. Perhaps buy a few stocks.

Teens who enter high school with a sound understanding of money management will be more financially self-assured and better able to deal with the pressures of materialism. They move toward adulthood with a better sense of what money can and cannot do, and how they can make the most of their financial resources.

As you consider ways to make your child more financially aware and savvy, remember you are helping them build skills for a lifetime. You are moving them toward making their own decisions, including learning from their mistakes and successes. If you raise your kids to respect the value of money, work for what they get and learn to save, you greatly increase the chances of them being good adult money managers. It’s knowledge that will pay off!

Amy Payne Burgess is a 4-H Regional Extension Agent for DeKalb, Marshall and Cherokee Counties.