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Those shoe boxes filled with rocks or stickers cluttering
up your child's already disorganized room are doing more than collecting
dust. They may also be giving your child a lesson in finance.
Having a collection of something -- baseball cards,
coins, comic books or, yes, even rocks or stickers -- helps children
and teens learn important math and money skills. In a time when
the financial literacy of children is dangerously low, collecting
is a hobby worth encouraging.
Bryan Lee, a Certified Financial Planner in Plano,
Texas, says that going from collecting to understanding financial
matters is natural. "Things that were complicated to some people
came easier to me because of my experience collecting baseball cards,"
says Lee.
Lee quickly learned that the ups and downs of baseball-card
pricing were similar to the pricing movement in the stock market.
"If it wasn't for my hobby of collecting, I'm not sure I'd
be a financial planner today," he says.
Other financial experts agree with Lee that a child's
treasured collection can create a learning platform for financial
skills. "I strongly favor children starting their own
business, and collecting is a small business venture," says
Peggy Houser, a Certified Financial Planner in Denver.
Houser, whose 15-year-old grandson has collected everything
from Pokemon cards to Beanie Babies, has learned good money management
skills and now sells the guitars he collects.
| Here are some important lessons your little collector is learning and how you can encourage ongoing financial literacy.
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| Lessons for little
collectors |
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Spending and saving
When children and teens use their allowance to buy collectibles,
they are learning valuable lessons in spending and saving. They
may have to ask themselves if they should go to the movies tonight
or save their money for rare comic books that will build their collections.
"One of the most important life skills is learning
about choices and consequences," says Jon Gallo, founder of
the Gallo Institute and co-author of "The Financially Intelligent
Parent: 8 Steps to Raising Successful, Generous, Responsible Children."
When your son buys a movie ticket on Friday night,
he is engaging in short-term gratification, but, if he has
a coin collection, he might just be motivated to save his allowance
to purchase a rare coin he's had his sights on acquiring.
Delaying gratification
With children being constantly bombarded with marketers seeking
to stimulate instant gratification, the concept of delaying gratification
for long-term benefit is a difficult one to impress upon children
and teenagers. Gallo agrees that being a collector can help
teach the value of delayed gratification. When children can't afford
their next collectible purchases, they have to wait until they've
saved enough allowance or earned additional income.
"Delayed gratification is an example of reflective
thinking," Gallo says. "And when a child has to think
about whether she should spend her money now or save it to buy another
item to add to her collection, she is engaging in reflective thinking."
Studies have established a direct correlation between
the ability to delay gratification and a youngster's lifelong success.
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