1. Entertainment
Send to a Friend via Email

Your suggestion is on its way!

An email with a link to:


was emailed to:

Thanks for sharing About.com with others!

Teaching Kids About Money with Suze Orman - Show Recap


Original Air Date:

Wednesday, October 22, 2008

Teaching Kids About Money - Frugal Teens Article:

Oprah was inspired to do this show, and first introduced the topic 5 days prior on the Friday Live episode, upon reading an article in the New York Times on frugal teens. The article explored how parents who always said yes to purchases for their children are now having to start saying no because of the financial crisis. This inspired Oprah to have financial expert Suze Orman help families talk to children about money and get them involved in the process.

Oprah first welcomed Wendy and Paul Postle and their kids Kaitlyn and Zach, who were featured in the NYT article

The family viewed themselves as living the American dream and openly admitted to overindulging their children, especially during holidays and birthdays. When the family's budget started to change, they needed to make adjustments in their spending in order to stay within the new budget. The Postle's started sharing their monthly bills with their children; son Zach first thought the monthly mortgage payment was a yearly number. The family started scaling back purchases and have said that it has brought them closer together - the children now understand what it takes to provide a comfortable life.

Teaching Kids About Money - Teens React:

A clip was shown from Gaithersburg High School in Maryland where teens shared their experiences during this crisis. The most common responses had to do with a fear of paying for college, parents being laid off, and having to go without many things they were used to having.

Suze responded to the clip by saying that there is no better time than now to start talking about money with kids. When everyone feels wealthy, parents said yes, according to Suze. Now that the bottom has fallen out, parents are starting to say no. Suze declared that a yes/no should not be based on the economy, but on values.

Teaching Kids About Money - How to Start:

Deirdre from Seattle had a question for Suze via Skype - her 3 young teen children make her feel like an ATM by the way they are always asking for more money once their allowance runs out, giving into them, she worries about scaring them if she tells them the truth or wonders if it's too late to start the conversation? Suze followed up with these tips: everything you do with money teaches your children; it's never too late to start a conversation about money; and you children do as you do, not as you say.

Teaching Kids About Money - Allowance:

Lori from California asked via Skype how she should respond to her 10 year old daughter wanting an allowance; also, what is an appropriate amount and should she earn it in some way? Suze stated that money has to be earned, even at 10. Suze's suggestion was for Lori to make a wage for her daughter based on the federal minimum wage - basically, $.10 and minute. Lori should sit down with her daughter each month and ask her what she needs the money for and figure out how much she needs to work to earn it. For efficient work, the wage can be increased - as well as decreased for work that is not up to speed or quality.

This will start to teach kids at 8/9/10 that good work equals good pay and job promotion, while poor work equals getting fired. Kids will start to learn the process of earning money based on quality performance. To start this, parents need to decide what kind of help or contribution they need from their kids around the house - it could be as simple as making their bed or helping with dinner. For Lori's daughter who asked for $20 a month, based on the $.10 per minute wage it would take her 4 hours a month to earn her allowance.

Teaching Kids About Money - Teen Credit Cards:

Erica from Washington asked via Skype if her daughter at 17 is responsible enough to have a credit card? Suze responded that each parent must answer that question for themselves. For a teen to have their own credit card, they need to understand that whatever they charge they must pay off in full at the end of each month; carrying no balance or minimum payment. Suze recommends: parents monitor a child's credit activity; make your child pay you in full 2 weeks before the bill is due as to not ruin their credit score; if they are responsible let them take over payments.

Teaching Kids About Money - Suze's Quiz and Tips:

Suze gave 3 questions that kids should be able to answer before having their own credit card:

  1. Holding a $1,000 balance on a credit card and paying the minimum payment, how long will it take you to pay it off? Answer: 16 years
  2. How much will you have paid in interest alone? Answer: $1694
  3. Which of these are possible if you miss a payment/are late for a payment/or go over your limit? Answer: all - trouble renting an apartment, getting a job, or getting a cell phone or student loan.

Suze's 5 Tips:

  • Start talking about money now
  • Teach kids to value money
  • Don't reward with money
  • Be an example
  • Teach kids how to prioritize

Teaching Kids About Money - A Letter From Dad:

Dan Kadlek, a contributing writer for Money Magazine, wrote a letter to his daughter Lexie before she went off to college about his concerns with her financial future. Dan shared that he feels kids should be prepared for reality in school - along with learning how to count and read. Lexie also appeared on the show via satellite from Miami University in Ohio where she is a freshman. Lexie shared that she appreciates the limits her parents have put on her spending and feels it will prepare her for the future when she has to support herself. Dan stated that great lessons to teach kids are how to live within their means and not treat credit cards as free money.

Teaching Kids About Money - Special Trips:

The final question to Suze came from Jean via Skype in Indiana. Jean wondered if she should take a loan out for her 5th grade son to go on a trip to Costa Rica with his class for their Spanish program. She shared that he has known about the trip since kindergarten, but that the family is over $20,000 in credit card debt and the trip would cost $2,500. Suze's final tip was to not tell your children that you can afford something when you can't. Food, shelter, medical care - basic needs are important for Jean to provide her son. If Jean does allow her son to go on the trip, she will be teaching him to live a financial lie because that will be the example she is setting.

  1. About.com
  2. Entertainment
  3. Oprah
  4. Oprah Show Archive
  5. October 2008
  6. Wednesday, October 22, 2008 Oprah Show Recap - Teaching Kids About Money with Suze Orman Wednesday, October 22, 2008 Oprah

©2014 About.com. All rights reserved.