TEENAGERS IN AMERICA might know their way around a mini-golf course, Dairy Queen menu and the "Twilight" trilogy, but they are far less familiar with basic financial concepts such as how to calculate interest or balance a checkbook.
An international survey of over 29,000 15-year-olds in 18 countries released last month found that American teens are merely average – behind their peers in China, Estonia, New Zealand, Poland and elsewhere – when it comes to practical money skills. (Americans did score better than teens in Russia, France, Slovenia and a handful of other countries, however.) About 18 percent of American students did not even achieve a basic level of financial proficiency in the survey, suggesting they would struggle with everyday financial tasks, from managing spending decisions to understanding an invoice. The survey found that those with strong math and reading skills tended to have a better grasp of financial concepts. The most advanced students, who came in among the top 10 percent of those surveyed, could grasp complex financial tasks, including calculating a bank account balance and understanding income-tax brackets. The survey, known as PISA, or the Programme for International Student Assessment, is conducted by the Organization for Economic Co-operation and Development and collects the data through an hourlong written test. Unique in its international scope, the findings offer insight into cultural and educational influences on financial know-how: Some of the countries introduce students to financial literacy through coursework, while others, including the high-performing China, teach students math skills but not necessarily financial ones. More financial literacy courses for students, as well as teacher training, could help enhance financial education in this country, says Ted Beck, CEO and president of the National Endowment for Financial Education. Parents play an even more important role, he adds. “Talk to your kids about money in a nonconfrontational way. Culturally, we don’t talk about it,” and that’s a problem, he says. Parents can explain to even young children that money is in the bank account because of their job, for example. Beck also says parents can role model a disciplined approach to shopping by waiting to purchase tempting items. “Things don’t seem as shiny the next day,” he says. One of the biggest questions within the field of financial literacy is how to make such lessons stick. Previous research suggests that when high school students learn budgeting and credit management skills in class, they don’t necessarily remember those lessons when they need them years later. That’s why Alexander Gonzalez, president of California State University–Sacramento, said at last month’s release of the PISA data at George Washington University that it’s important to learn practical skills when you are also applying them to your life. For example, when you sign up for your first bank account or get your first student loan, that might be the best time to learn about managing money. Indeed, students who reported having bank accounts already, at age 15, tended to report higher levels of financial literacy in the PISA survey. (That advantage, though, disappeared once researchers adjusted for socioeconomic differences.) While 7 in 10 U.S. students in the highest socioeconomic brackets had a bank account, just 3 in 10 students in the lowest quartile did so. In the U.S., many of the 15-year-olds in the survey also reported other financial experiences, including earning money or working in a family business. Teens in the U.S. were slightly less likely than average to hold bank accounts. In New Zealand, for example, the vast majority of 15-year-olds reported already having a bank account, while about half of U.S. teens have one. U.S. teens were also less likely than their peers in other countries to already have prepaid debit cards. Shanghai teens, the same group that scored highest on the financial literacy test, were the least likely to have prepaid debit cards. Gonzales noted that while 3 in 4 of his USC students receive financial aid, many of them arrive on campus unfamiliar with basic financial concepts. “Many of them have not even seen a checkbook,” he said. It’s not entirely clear how colleges can best impart this information, he added, and whether it should be done through a series of required personal finance courses or some other means, like one-on-one counseling in the careers or financial aid office. Even parents familiar with financial concepts, like Gerald Rosenfeld, a fellow at the American Academy of Arts & Sciences and investment banker, say they struggle to impart money lessons to their children. “Even though I work in financial services, [my daughter at age 15] wouldn’t have known the difference between compound interest and a compound fracture,” he said at the conference. Parents who want to start their own dinner table conversation with their teenagers about money can peruse sample questions from the PISA website. They include making sense of a subway map to determine the most efficient location to meet a friend; deciphering sales data from a graph; and understanding the purpose of a retail invoice. If parents don’t know the answers to the questions themselves, they can rely on the extended explanations offered on the site – a helpful cheat sheet for parents whose own financial literacy skills are a little rusty. Being a parent its your duty to focus on teaching money management for children.
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While learning budgeting skills is not likely to be a high priority for most teenagers, teaching teens about money is as essential to raising kids as reminding them to brush their teeth and eat their vegetables. If the financial crisis taught us anything, it should be that everyone needs to be smarter about money.
While some school systems have added financial literacy to their curricula, many have not, and in the end, responsibility for ensuring your offspring are ready for adult financial life is on your shoulders. Fortunately, there are plenty of ways you can add to your teens' practical knowledge. Start with a game. Websites like PracticalMoneySkills.com and Learn4Good.com have free games that teach teens about money management. For example, on the Learn4Good site, teens can play "Record Shop Tycoon" or "Burger Restaurant" to learn about running a business. The Practical Money Skills site has "Financial Football" geared to teens who must answer questions about money to move on the football field and "Road Trip to Savings" to teach them about why they need to save. Put them on a monthly budget. If you haven't already started your kids on an allowance, you should consider the benefit of a monthly infusion of cash into your teen's pocket. Instead of handing out $20 bills when they're heading out with their friends, you can teach them to control their spending by limiting them to a specific amount each month. You'll need to be ready to say no when they ask for more money after they spend all of the allowance in the first week, but that's the only way for them to learn. Pay them for choosing to save. Train your kids to pay themselves first by putting at least 10 percent of any gift money or anything they earn into a savings account. You can even offer to match the savings as an incentive for them to save more. Your teens will learn more if they do the research themselves to find the account with the lowest fees and highest interest rate. Teens who already have jobs may be ready for a checking account with a debit card. If so, warn them about the risk of racking up fees if they opt for an overdraft protection program, and consider arranging an automatic transfer from a savings account to cover overdrafts instead. Sponsored Links Give them a clothing allowance. Instead of paying out-of-pocket for each pair of jeans, have your son or daughter come up with a list of needs for each quarter or season. Figure out a practical budget and then put that money on a prepaid debit card. This gives them the power to choose between blowing their budget on a pair of sneakers or spending more carefully and having enough for an extra pair of jeans and a couple of shirts, too. Teach them the art of thrift. Teach your kids to appreciate "vintage" clothing for style and savings. Thrift stores and flea markets can be a great resource for gifts, books, and DVDs. Your teens can get a lot more out of their limited spending power if they learn frugal shopping techniques. Give them a budgeting project. Whether you need a new cellphone plan or are planning a vacation, ask your teen to do the research. A teenager may be better than you are at wading through the various mobile phone options, and will have a vested interest in boosting the availability of data for her iPad or smartphone. A teen can also help look for deals for a family vacation for hotel rooms, flights, or car rental and develop a spending plan based on your budget and destination. Encourage them to get a job. Nothing teaches money skills faster than getting a paycheck with all the taxes . Before that first paycheck arrives, make a plan with your son or daughter for saving part of every check. Depending on your teen's level of maturity, determine whether the rest of the income will go toward a specific financial need such as car insurance or whether your teen will have full control over the money. Talk about college financing. According to recent research by FICO, the average amount of student loan debt was more than $27,253 in 2012. Talk to your high school student about their options for college and what your expectations are for their financial contributions during their college years. Giving your teens information about the cost of college and about the burden of student loan debt can help them make decisions about working during college and where to attend. Warn them about identity theft. A 2012 study by AllClear ID, an identity-theft protection company, showed that minors are 35 times more likely than adults to have their identity stolen. Warn your teen about the importance of safeguarding their Social Security number, name, and bank account information. Teaching your teen about money matters can not only help them in the future, but it may help your own money management, too. When it comes to finances, it’s never too late to start focusing on teaching kids about money management and savings. It’s been known that children learn at a rapid pace in their early years, and financial literacy is one of the skills that should be taught to kids early on.
Investing in your kids’ future isn’t just about making sure they receive a great education or have successful careers, but it’s also about how they should invest financially to ensure that they’ll have money not just for the present but for the future. Below are four easy ways to teach kids about money management and financial literacy: 1. Take advantage of the piggy bank. Growing up, many kids had piggy banks in their room whether it was for the purpose of actually saving their coins or just for decoration. Now that I’m in my early 20s, I realized the importance of the piggy bank during my pre-teen to teenage years. Although we all think that pennies, nickels and dimes are worthless, we forget to realize that those coins add up. It doesn’t take that much for an accumulation coins to reach a dollar. It’s essential to teach kids that whether they have a penny or a $20 bill each type of currency is worth substance. It also teaches kids the importance of saving and gives them the visual representation of witnessing their money build. It’s a great feeling once you witness it. 2. Teach kids how to work off commission. It’s never too early to start your kids off doing chores and establishing their work ethic. If you grew up in a similar household that I grew up in, there’s plenty of chores to do around the house. Some chores include taking out the trash, mowing the lawn, washing dishes, raking up leaves and washing dishes. With all five chores if you get paid $5 for each, you’ll already have $25. It’s important to teach kids that hard work is not given, but earned. It’ll also show them that hard work pays off. 3. Show kids the reality of purchasing items. The best way to learn is through real-life experiences. One way to show kids the importance of managing money and deciding when to spend it is taking them to the store to purchase items with their own money. Those days of kids getting mad about not getting fast food on the way home or getting those extra snacks from the grocery store will be long gone once they have to pay for it on their own. They’ll realize that that happy meal wasn’t worth those $3 to $5, and could’ve used it towards items more important like clothes. It just takes that one trip to learn that lesson. 4. Set up a bank account for your teen. Kids should learn responsibility early on and having a bank account can teach them how to be responsible with their money. Setting up a bank account can be one of the most effective ways to teach your older child about money management. That’s when they’ll be able to learn the difference between a savings and a checking account. It’ll also teach them how to save money. One important lesson you can teach your kids, is based off the amount of money they are paid, take 10% of it and transfer it to their savings account. But be careful, now that they will have access to a debit card, it may be harder for them to keep track of their money and influence them to continue to swipe their card without really knowing how much money they have in their account. If this concern may arise, make sure to have access to their account to help manage their accounts. As you can tell from the points above, money management is very important for kids to learn as early as possible. Actually, during the holidays is probably the best time to teach them about how to handle their finances. Especially when their aunties, uncles, and grandparents are giving them money. Once they’ll learn the significance of how to manage the money that they do have, they’ll start to become more frugal and stop spending frivolously From 14 to 20 March, the world celebrates Global Money Week. To mark the occasion, the Australian Securities and Investments Commission (ASIC) has released some practical tips for parents that will help children to develop good money habits in later life. And also focuses on making parents aware of the importance of money management for children.
The traditional way of teaching kids about money — counting coins, saving in piggy banks, the board game Monopoly — are becoming increasingly irrelevant as we march indomitably towards an all-digital currency. It’s entirely possible that real, tangible money will be antiquated by the time our children reach adulthood. With cash playing an increasingly invisible role in financial transactions, new teaching methods are needed to set kids up with the money skills they need for life. As we kick off Global Money Week, ASIC has released some financial literacy tips for 21st century kids. Many of these methods simply involve talking to your children about everyday money situations as they happen. The key is to communicate how money works at an early age — according to ASIC’s research, over 80 per cent of 15-year olds in Australia already have a bank account, so it’s important to teach them about budgeting and planning before bad habits set in. In no particular older, here are ASIC’s top tips that should see your offspring grow into financially responsible adults:
Without question, we want the best for our kids. The highest rated schools, the safest cars and even the healthiest lunches. We want to know they are prepared for life after high school or college. But financial education for kids isn’t included in most student curriculums. Do you know if your kids know how to budget their money?
If you want your children to go to college one day, or even just have a financially sound life, prepping them for a world of real household finances should be started early. Plus, if you think your kids will go to college one day, you don’t want them to be a part of the rising student-loan default debt in the country. They might be brilliant writers, but a Creative Writing major probably won’t ever be able to pay off that $100,000 tuition bill without shelling out a significant chunk of interest payments as well. Don’t want your kids to suffer? Start teaching them these 7 lessons about money today. 1) LESSONS IN BUDGETING: AN ALLOWANCE No child is too young or old to learn how to budget and an allowance is an ideal starting place. But before you hand over your hard earned cash, think about what you want your kids to learn from earning an allowance. For instance: How to Make a Money Notepad
Should your kids come to you and want to make a major purchase, make sure they understand the ramification of doing so. For example, they might be completely broke for the rest of the summer if they buy themselves a tablet. Would they rather go to the movies and hang out with friends or have a tablet? If you have younger children, a clear jar system might work out even better. Instead of using a traditional piggy bank, use a minimum of two clear jars for their change, birthday money and allowance. You can label them “Savings,” and “Spending.” The Savings jar is for their long-term goals, while “Spending” is for that bit of candy they can’t live without. 2) LET THEM MAKE MISTAKES This might be the hardest lesson of all. You can guide your children only so much. Sometimes, it’s best to let them make a mistake, especially while they’re still living at home and you can provide some post-error guidance. If you’ve gone over the pros and cons of a major purchase, and you know they’re about to make a huge mistake, they’ll remember the lesson even more strongly once they’ve messed up. 3) BRAND NAMES ARE ALWAYS BEST (HA!) Because they’re much more affected by mainstream culture and pressure to conform, this might seem like an impossible lesson. If they don’t have the latest iSomething, they’re suffering will be so immense that we as parents can’t possibly understand. It’s ok to roll your eyes. Start small — don’t think you’re going to wake your kids up to new (cheaper) tech. Try clothing first. Stores like H&M provide alternatives to more expensive brand name clothing. Their allowance will go much further here than at a store like Lucky Brand. Even better, teaching your children a love of second-hand shopping will serve them well in the future. If they can’t stand to not wear brand name clothing, it might be time to teach them to scour eBay and consignment shops. 4) EXPLAIN CASH VS. CREDIT Credit seems magical to a kids — heck, I know some adults who haven’t quite grasped credit yet. All you have to do is swipe a plastic card and you take home your heart’s desire. Nip that ideal in the bud as soon as possible. Interest rates lead to doom. Cash should always be a primary method of payment, with credit reserved for extreme emergencies. There are many sites that offer free online lessons for kids to learn about their finances. Mint.org offers games and lessons for kids, teens and even parents. Don’t let your kids step out of high school and into debt. 5) SET SAVINGS GOALS Even without a tangible object in mind, it’s important to establish savings goals. It’s easier to establish a reason for a savings goal, especially with younger children if there’s a toy coming onto the market in a few months they really want. Delayed gratification is an important lesson – particularly in a generation so accustomed to instant gratification. Your best bet with smaller children is to make savings fun. Use a chart or a white board in their room to track how much money they have and how well they’re saving. It will keep them involved with their goals. For older teens, investigate Google spreadsheets. 6) GROCERY SHOPPING 101 The television show Guys Grocery Games is a guilty pleasure of mine. Occasionally contestants will get a small sum of money with a coupon flier and they have to make a gourmet meal with $5. When you’re counting pennies, and most college kids do count pennies at the grocery store, this game will come in handy. This is another opportunity to show them where brand names matter and where they don’t. Personally, there are some brands I prefer over others when it comes to food. Teach them what’s actually important. There’s a balance between maintaining a well-kept household and frugality. Also, teaching your kids how to cook will enhance their ability to budget their money, because eating out is expensive, plus, it’s one heck of a marketable social skill. 7) DISCUSS UTILITY BILLS Another hard lesson to learn is how much housing costs. As adults, we know that an $800 a month rental unit will cost a good bit more than that once utilities are added in. A frank discussion with your kids will help them understand just how much it costs to maintain a house, and why you’re always nagging them to turn off the lights when they leave the house. The hope is this will affect how they manage their finances in the future, but it might also help you rein in water and electrical costs in your own household now, too. Set your children up for financial success. Learning these life skills on the fly as adults opens up too much room for error. It’s too easy to swipe a card or sign paperwork that leaves you in debt for decades. Follow these basic teaching principles and send your children on their path to a secure financial future. Think about how your child experiences money. She may have a piggy bank, and be saving up her dollars and quarters for a toy. But does she understand how to create a budget? Does she understand the effort it takes to earn a dollar?
Many parents avoid teaching teens about money, a possible side effect of our society’s belief that discussing money is impolite, says Neale Godfrey, chairwoman of the Children’s Financial Network, author and financial literacy expert. “The only things kids ever see us do with money is spend. They don’t see us pay bills, give to charity or save,” says Godfrey. The danger, she says,is that we’re raising a financially illiterate generation. The solution, however, is staring us in the face: “Get the kids involved!” says Godfrey. She explains why talking about money with your kids is so important—and how to do it right. Talk about Money (Really!) “There’s no way for us to expect our kids to be financially literate if we keep them out of the topic totally,” says Godfrey. If you avoid talking about money, she says, they will learn about it eventually—just not from you, and perhaps not until they hit financial trouble. “Explain that when you use the credit card, you pay for it at the end of the month. Show them the electric bill. Empower them to come up with ways to reduce it,” Godfrey says. “Explain that there’s a real cost if we open the windows when the heat is on. Kids don’t know that.” By demystifying your household expenses and daily financial practices, you’re teaching them good money habits. Learning Earning When your kids are very young, Godfrey recommends introducing the idea that the only way to get money is to earn it. “Set up a very simple allowance system,” she says. Kids should do chores to contribute to the overall household work and not be paid for them. Beyond that, you can designate chores that will earn the kids money. Create Budgets and Goals Just like adults, kids should budget their earnings. Part can be spent right away, while part goes to charity and the rest is given over to medium- and long-term savings goals. “Get the kids understanding at a young age that you don’t spend all the money you get,” Godfrey says. Rather than making them feel deprived, your children will learn the satisfaction of earning and saving. “Kids love the system because it’s empowering,” she says. For long-term goals, Godfrey says you should introduce a 401(k)-style matching program. Say your daughter has her eye on a new bike. “You don’t want the kid to be 43 before she gets the bike,” says Godfrey. For every dollar she saves, add a dollar to her account. And make sure other family members are on board with the system. No bailouts from Grandma and Grandpa! Teach the Value of a Dollar Learning about money can be fun. Godfrey recommends using games and hands-on experiences to teach financial concepts. “Make the world your classroom,” she says. When your kids are little, let them go up and down the aisles of the grocery store with a list of items and a set amount of money to spend, to help them learn what things cost. When they get older, Godfrey recommends teaching relative value. For example, set up a high-end purchase in terms of what it will take to earn the amount of money needed. Say your son wants a pair of designer jeans: Ask him how many weeks it will take him to earn the $150 needed for the purchase, Godfrey says. If it’s 10 weeks, now pose the question: Is it worth 10 weeks of work to buy the jeans? In that way, “there’s no value judgment on the jeans. It’s just: Is it worth it?” says Godfrey. Share Your Financial Goals, Too You should also clue your kids into your long-term financial goals, says Godfrey, whether those are saving up for a new home, taking a luxurious vacation or retiring. Even when her kids were very young, she says, she would let them know that she was saving for their future college educations. Start Debit and Credit Cards with Training Wheels Kids should be taught the basics of good credit practices—don’t have too many cards, and always pay off your balance every month—as well as why a credit score is so important (and the effect bad credit can have on your life). By the time they are in their early teens, kids can start spending, Godfrey says. Create, for example, a quarterly clothing budget with your teenager. Then load a debit card with the funds. Your child will have agency over the budgeting and spending—but also can’t dig too deep of a hole if they don’t use the card responsibly. Godfrey recommends a similar strategy for college kids. Load up a debit card with monthly expenses—not the full semester’s expenses—then have your college-age kid pay their own monthly bills. Once they’ve shown they can handle the responsibility, you can help them open credit cards. Learn Their Spending Style “We are all born with a financial personality,” Godfrey says. “You’re a saver or spender.” In Godfrey’s experience, a family can—and most often does—have a mix of financial personalities. So you may be a religious saver and end up with a little shopaholic for a child. Help your kids balance out their instincts, so they save smartly and spend wisely: “Balancing saving and spending, and to be joyful when you do save and reach your goal.” Kids & Money
You can start teaching kids about money, how to count it, earn it, and keep it with these tips. Let’s be real, they don’t teach about handling money in schools. Unfortunately, parents don’t teach it in most homes either. Kids are forced to learn from afar inheriting their parents’ bad money practices. But no more excuses. This is your child and you want what’s best. Let’s stop this cycle of passing our bad money habits to our children. Let’s secure them with the confidence they need to practice positive money habits and ensure an abundant future. 1) Teach the basics.Kids need to know the difference in the value of each item of currency. Teach them about pennies, nickels, dimes, quarters, dollar bills, etc. There are many tools available to help with this. For children 0 to 5 you can use our memorable educational song Quarter Dime Penny Nickel that teaches how to count by 25s, 10s, and 5s with ease. The cool thing about this is you can have the song playing during car rides or around the house leaving it to teach valuable lessons without officially teaching. For children 5 and up, you can get a super deluxe play-money set that includes over $5500 in realistic looking fake bills and coins. ABCya created a fun online money game, but you can also use money worksheets to create worksheets on-the-fly and select which bills/coins to include. 2) Give them an allowance. The best way for kids to learn about finances is for them to actually have cash of their own that they can use. An allowance for kids covers this pretty nicely. You get to choose the amount and frequency, but one idea is to give them their age in dollars every week. If they are 5, give them $5 a week. You can even throw in bonuses for chores, good behavior, and excellent scholastic achievement. 3) Teach them the importance of saving money (or paying yourself first). Make it mandatory that your kids pay themselves 10% of their weekly allowance. For instance, if a child receives $10 a week, they should pay themselves (or save) $1 per week. This means they cannot spend this money unless it’s used to make more money. So any business ideas your kids have (ie lemonade stand, candy merchant, etc), these savings should be their seed money for it. Over time these savings will accumulate to something big. The bigger the savings, the bigger the money-making opportunity. With the habit of saving in place, it would be an easy transition during adulthood for your child to put away a percentage to prepare for retirement in vehicles like a 401(k) or an IRA. 4) Teach them the value of helping others (or giving).Instead of just making it mandatory that they pay themselves 10% of their weekly allowance, also make it mandatory that they set aside another 10% for helping those less fortunate. With this practice they will learn to live below their means removing the impulse to buy, lease, or rent unneeded items in the future. As an added bonus, they will become charitable and will learn the joy involved in helping others. 5) Keep good records.Give them a notebook to track all income and all spending. Better yet, use a free online spreadsheet from Google Sheets. They will learn computer skills and responsibility. You can easily double-check the numbers from time to time and even threaten not to give an allowance if this is not done properly. Remember kids learn through sight as well. If they see you working with your very own budget, your children will be tempted to do the same. This will help you be responsible for money just as much as it will help your child. 6) Teach about debt. Nobody wants to talk about it until it’s too late, but teach your kids about debt early. Let’s say your kid wants something now that he or she can’t afford with their 80%. Explain how much it will cost and display (via a notebook or spreadsheet) how long it will take for them to save the money for it. Then give them a choice between:
Really take the time to show them how much more money they will pay over a period of time if they buy now with interest. If they choose this option, you can immediately take that amount from their allowance but only after they set aside their 10% to themselves (must pay themselves first) and 10% to give away. With the decrease in weekly funds, they will quickly learn of the added stresses that debt can bring. If you’re teaching this lesson, be strong. Don’t cave when your child is begging for money. This could be a great time to introduce the value of work and make your child work more around the house to earn that extra money. 7) Teach how to protect their riches. None of us ever wants to lose money, ever. This sucks balls. This is an extension of lesson #3 on saving). For that 10% that the kids pay themselves, protect it. Store it in an extra good hiding place or a secure bank. Do not allow your child to waste these savings on any business venture that is not well researched. For instance, you wouldn’t give your cousin money to start a clothing business if he didn’t know where to buy clothes from or how to sell them at a fair price. If there are currently no business ventures available, the money should be stored in a reputable bank’s savings account so that it will acquire interest until your child is ready to multiply it further. This way your child just increased his or her earning power by doing nothing. The Final Value We all know the value that the world places on money. Let’s give our kids this knowledge early so that they can have more practice than we did and make better decisions. Money doesn’t have to be a serious thing. Make a game out of it (who can save the most, who can come up with the best ways to invest, who can earn more from $5, etc). As a parent, I recommend Charles Conrad’s The Richest Man in Babylon — Six Laws of Wealth. It goes into more detail on some of these principles and will give you an objective look over your own finances leading to financial literacy. I was at a friend’s house last week and her daughter was so excited for her new toy. Her mom bought her a toy cash register at the store and she (3 years old) wanted to play store with everyone at the house.
Without any direction, I watched her take the cash register out, round up the play coins, paper money and oh yeah the play credit and debit cards. The play cash register also came with play products like milk and cereal which she piled into the tiny play grocery cart it also came with. She had us bring our products up to the register and she rang them each in one by one and gave us a total to pay. Of course, her math was a bit off but hey she is only 3. Each transaction was different, sometimes she would swipe our credit cards and open the register to give us the paper cash back as change and sometimes she was having us pay in cash. That moment prompted me to wonder, when should we start teaching money management for children and what are some of the best ways to go about it? At only 3 years old my friend’s daughter was already picking up on how transactions work. She was absorbing all the things she saw on trips to the store with mom. No one had to tell her a thing when she was playing with her cash register. She just opened up the register and started doing everything she knew about registers, shopping, and money. You may or may not be surprised to learn that we should start teaching our children about money when they’re just two years old! While your child may be older than that right now, the experts say that it’s important to get started teaching them about money as soon as possible. BUT it’s never too late to begin so no matter the age of your children, there are concepts we can still teach. So let’s take a look at the concepts that we can teach our children at every age. Teaching Preschoolers About Money At this age, we can teach our children about the concept of money – in other words, what money is and what it does. We can talk to them about the value of different coins and bills. We can also teach them that money is used to buy things and also to save and give. Playing store is an easy way to begin teaching the concept of money to young children. You can see that in the story I shared with you above! An inexpensive register is a great affordable way to learn. Early Elementary School At this age, it’s a great time to start teaching children about the difference between a want and a need (because we know they sometimes “need” things at the store). Children can help with the grocery shopping and begin to participate in decision making. This is also a great age to begin showing your children how to use a piggy bank and to introduce the concept of an allowance and working for money. By the end of elementary school, they should understand saving money to buy things that they want. I remember I had a piggy bank (which was a jar) growing up and I really think that helped me be the saver I am today. I saved every penny I received and put it in my piggy bank. Junior High School At this age children are more than ready to begin earning money. You can tie allowance to extra chores or give them opportunities to earn money around the home. It’s also a good time to teach them about saving for their future and for things that they want to buy in the near future like a new pair of sneakers or sports gear. This is a great time to introduce a system like FamZoo to the family. If you haven’t heard of FamZoo you’ll definitely want to try them out. It’s basically a family “banking” system designed to teach kids to earn, save, spend, and donate money wisely in a safe, friendly environment. Parents are the “bankers”. Kids are the “customers”. High School By this time your child should have learned some financial independence. Hopefully, they’ve had the opportunity to work for money and they have learned about saving for both short-term and longer-term goals. Once your child is in college they will be well on their way to financial independence. Sure, you may be paying for college and helping them manage their finances. However, they should also be able to handle the majority of their financial decisions on their own. A great way to have your children be involved in college planning is by having them look at the cost of colleges with you and having them apply for scholarships as well. If the scholarship process scares or overwhelms you, you should check out The Scholarship System which is a course that teaches parents and their children how to apply for multiple scholarships and secure thousands for college. It’s a great way to involve children in the financial process. It’s never too late to begin teaching our children about money, saving, giving and investing in their future. Let’s check out some teachable moments. Teachable Moments Teaching our children about money takes more than one conversation. Using real-life situations and examples will help them pull the concepts together. They’ll learn not only from our words but also through our actions. Here are a few ideas and opportunities to talk to your child about money. When They Receive Monetary Gifts When our children receive gifts for their birthday or another holiday, it’s a great time to talk to them about saving some of the money. We can even help them plan how they’re going to save and what to save for. When You Visit the ATM To our kids, the ATM is a magic box that spits out money when you enter a secret code anytime we need it. Don’t we wish! But that’s what our children might think if we don’t talk to them about what the ATM is and how it works. It’s a great opportunity to talk about earning, saving, and making spending decisions. When You’re Shopping Chances are that your child goes with you when you go to Target or the grocery store. This is an ideal opportunity to explain to our children about budgeting. We can talk about how different items cost different amounts. We can even ask our children to help us compare prices and find the cheapest priced item on the shelf. This can make saving money fun for them. Creating Your Monthly Budget Many adults intentionally don’t talk about money in front of their children. However, in many cases, that’s a mistake. When children are aware of the family finances and understand about income and expenses, it helps them see the big picture. It’s also a good opportunity to talk to our children about different ways to save money and why they might want to save money. For example, we can talk about turning the lights off when they leave a room and using any energy savings to put toward something fun for the family like a vacation. Of course, we don’t want to create added stress for our children if there are financial difficulties. However, involving them in discussions about your budget helps them have a better understanding of money. Allowance Time If you give your child an allowance, it’s an opportunity to talk about their decisions and what they’re going to do with the money. Depending on your child’s age you may have requirements for their allowance. For example, you may require them to donate some and save some as well. You also want them to work for their allowance and do things in addition to their regular chores. Their regular chores should be expected because when they become adults they will still have them and won’t be getting paid to do them. With busy lives, it’s easy to overlook opportunities to teach our child about money. However, they’re present almost every day. Take advantage of them from time to time and involve your children in your financial decisions and responsibilities to help them learn, both through words and actions, about money. As parents, we have the important task of preparing our children for adult life. Sometimes that’s done through example. Other times, it’s done through teaching moments. Teaching kids everything they need to know is an overwhelming reality that you and I will probably never fully achieve before they grow up and leave our care.
While we teach our kids their ABCs, how to be polite, how to make friends, how to root for the home team (that’s a good lesson, right?!), and how to ride a bike, there’s one area that many of us forget to talk about: money. As a blogger and freelance writer focused on personal finance, you would think our kids would be well on their way to financial success. That’s hardly the case, though. It’s actually through us dropping the ball in this focus area that I’ve learned the importance of teaching kids about money. We’ve done our kids a disservice in this area. We’re working hard now, while they’re in their teen years, to make sure they are well prepared when they enter the “real world.” You may have seen North Carolina in the news recently, where personal finance classes were added as a graduation requirement state-wide. This is great news and should be implemented across the country, honestly. Like many life lessons, learning healthy personal finance practices should start at home first. Teaching kids about money will look very different depending on age, your own views on money, and their learning style. With that said, here are some quick ways to teach your kids about money. The three jar method It seems simple, but using three clear jars to teach kids about money is super effective. Label the jars “Save,” “Spend,” and “Share,” and as your kids earn money, they divide it up into all three jars. This allows them to spend money on something they want, save for bigger, more expensive financial goals, and give money to someone in need. Don’t limit giving to just charities or church. Allow them to help out a friend or sibling if they want. Open a bank account for your kids As your kids get older and outgrow jars or piggy banks, open a savings account for each of them. These will be custodial accounts, which have their name on them but are under your care. Most banks offer these types of accounts, which take money management to another level. Find an account with no minimum balance requirements and no monthly maintenance fees. Having access to view the account online is great, as well. If you have high school students, you may also want to open a checking account. This allows them to learn how to balance a checkbook. It also can give them access to a debit card, which can come in handy, especially if they are driving and need to stop for fuel. Help them set money goals Everyone should have money goals. Our goals are going to look different than the goals our kids set, and that’s OK. Even if it’s just saving up for the latest video game, it’s still a goal and requires planning and saving. Help them track their money, so they watch as they get closer to hitting their goals. Play games Playing a board game like Monopoly introduces kids to basic principles of personal finance. From saving and investing to passive income (owning hotels), kids learn valuable lessons as they make their way around the board. To give an allowance or not? One of the most debated topics when talking about kids and money is whether or not to give kids an allowance. An allowance is a set amount of money that kids receive for a set period of time, typically weekly or monthly. Some people tie tasks to allowance, like completing household chores or getting good grades. This is more of a commission-based model. Whatever you decide to do will communicate a lot to your kids. If you give an allowance with no expectation of any kind, they may think they deserve money no matter what they do. If you pay them for chores, they may expect to get paid anytime you ask them to do anything around the house. If you want to build an expectation in your household that everyone pitches in, this may not be the best way to teach that. One way around this would be to give everyone specific chores they are required to do as part of the family. Then, offer other opportunities for kids to earn money with special projects and chores outside of the norm. You can also encourage your kids to pursue entrepreneurial opportunities to make money instead of just giving them money. Make them use their own money to pay for something There’s something about using actual cash to pay for something when you’re at the store instead of a credit or debit card. It makes the purchase more “real.” If your child is saving up for something they want, instead of ordering it on Amazon, take them to the store and make them pay for it with their own money they’ve saved. Include kids in financial decisions Involving kids in day-to-day money decisions allows them to be a part of the process in your household. Plus, they get to see how intertwined finances are in our lives. I’m not talking about big decisions, like how much money to put in your IRA or which credit card to get. Every trip to the grocery store involves tons of small financial decisions. Start there first and work your way up to more important decisions. Teach kids about interest Paying and earning interest can be a difficult concept for kids to understand. That doesn’t mean we should avoid it. One way to talk to your kids about interest is by sitting down with them and showing them your credit card bill. If you have any loans, those will work too. Show them exactly how much is borrowed, how much you pay monthly, how much interest is charged, and any other details that help explain how interest works. You can also offer them loans anytime they want to buy something and don’t have the money. If they want to buy something that’s $30, lend them the money and have them make installment payments, with a small interest fee attached. We also want to teach our kids the good side of interest, too, which is the power of compound interest. Using the jar method above, you can add interest earning to your child’s savings jar slowly over time to show how earning interest works. Another great way to teach the concept is by using this free Compound Interest Calculator from the U.S. Securities And Exchange Commission. Create real-life scenarios, fill in the blanks, and click “calculate.” Teach kids by example Perhaps the best way to show our kids how to manage money well is for us to be the example. If we have a healthy view of money, there’s a good chance our kids will see that first hand. Make it a point to have conversations as you are paying bills, balancing your checkbook, investing, or completing other weekly or monthly financial tasks. Let them help fill in the monthly budget. Show them how to make change. Any task involving money can be turned into a learning lesson. Great resources for teaching your kids about money There are so many great resources to teach kids about money. Here are some of my favorites: The Learning Center and Money Museum Located in the Federal Reserve Bank of Cleveland, this free museum is full of interesting exhibits that teach several basic money concepts. It’s also a great history lesson on how money was invented. FamZoo is a family finance app for parents, teens and kids to use. It uses prepaid cards and allows you to teach kids to have an experiential financial experience. Track chores, manage allowance, track spending, and much more. Kids have access to accounts, but parents can set specific rules within the program and have complete visibility and control. Dollars & Sense H&R Block created Dollars and Sense to give parents free financial literacy resources for kids. There’s a series of lesson plans and activities on topics like budgeting, savings, loans, 401(k), and more. Practical Money Skills If your kids like playing video games, why not use them as a way to teach financial concepts? Practical Money Skills offers several online games for kids to enjoy while learning personal finance skills. The Mint The Mint is another great website full of financial literacy resources for kids, teens, parents and teachers. The site is full of games, tips and tools to learn vital money skills you’ll need from childhood to adulthood. Savings Spree Savings Spree is an award-winning financial literacy mobile app (available on iOS) from Money Savvy Generation. There is a cost associated with this app. Within one day of using it, though, you’ll start to see the value of a tool like this. Smart Money Smart Kids For a book on teaching kids about money, check out “Smart Money Smart Kids: Raising the Next Generation to Win with Money.” Written by Dave Ramsey and his daughter, Rachel Cruze, this book teaches common sense ways to approach financial topics with kids and teens. Some of the topics include debt, hard work, spending, saving, giving, paying for college, and living responsibly. It’s the perfect book to add to your reading list. College Scorecard If you have teens who are starting to look at colleges, the College Scorecard is a great tool to use in their search. It allows you to compare college costs, and get a snapshot of employment prospects and student loan debt information for students who attend those schools. Next Steps We can either choose to let our kids learn about managing money from the world around us or take the initiative to focus on teaching teens about money management. No matter the age of your kids, it’s not too late to start investing in their financial literacy. It could end up being the best financial investment you and I ever make. College keeps getting more expensive. According to the College Board, in 2016-17, the average cost of a year at a public four-year college – including tuition, fees, room, and board – was $20,090 for in-state students and $35,370 for out-of-state students. At private, nonprofit colleges, the average cost was a whopping $45,370 per year.
At those prices, it’s no wonder a 2015 Gallup poll found that over 70% of parents say their single biggest financial worry is how to pay for their children’s college education. But perhaps all those parents are worrying about the wrong thing. Maybe the question they should really be asking is whether they should pay to put their kids through college at all. Between the high price of a degree and the uncertain job market, some parents these days are questioning whether a college education is worth the cost. And even when parents do choose to send their kids to college, some experts say the students are more likely to succeed if their parents don’t foot the bill for it. Advantages of Paying for Your Child’s College Many parents assume that putting their kids through college is the best way to start them out on a successful, prosperous life. And indeed, there’s a lot of evidence to show that a college education has big benefits. Here are a few of the arguments in favor of paying for your kids’ college education:
Disadvantages of Paying for Your Child’s College Although a college education offers many advantages, it also comes with a high cost. And surprisingly, picking up the tab for your children’s education poses risks not just for you, but for them as well. Here are some of the drawbacks of paying your kids’ way through college:
Alternatives to Consider Many parents struggle to pay for their kids’ college, but they don’t see what the alternative is. They think that a college degree is the key to success for their children, and they don’t see any other way to make sure they attain it. However, there are many ways students can carry the cost – or at least part of the cost – of their own education. There are also career paths that can allow them to go to college for free, or even skip college completely. Here are a few alternatives to consider before deciding to foot the bill for your kids’ education on your own. Work Through School Students can pay a big chunk of their education costs by having a job in college. Many colleges offer on-campus jobs through work-study programs, but there’s a limited number of jobs to choose from, and most pay only minimum wage. Some students find they can make more with a part-time job off campus, such as waiting tables. Students can also earn money through a side business, such as tutoring, which lets them set their own work hours. It’s unlikely students can earn enough to cover all their college costs while also studying full-time. Experts generally recommend that students work no more than 10 to 15 hours per week. At the federal minimum wage of $7.25 an hour, that comes to between $2,175 and $3,622.50 over the course of a 30-week school year. However, the net price of a year of college – that is, the total cost of tuition, fees, room, and board, minus any aid from grants and scholarships – is much higher than that. A 2016 study by Demos found that the average net price of college for low-income students ranges from $6,152.25 per year in Hawaii to $13,489.75 per year in New Hampshire. So, at best, a student’s earnings can only cover a little more than half the cost. Fortunately, there are ways for students to increase that income. For one, they can earn more money during the summers. If they work 40 hours a week for 13 weeks, a summer job can bring in an extra $3,770, even at minimum wage. Adding that to their earnings during the school year could get them over the net price for college in some states. Another alternative for students is to work more hours and take classes only part-time. According to the U.S. Department of Education, 22% of students at four-year colleges, and 61% at two-year colleges, are part-time. The obvious drawback of this approach is that it will take longer to earn their degree. On the plus side, it offers at least a chance of paying all the bills out of their earnings and graduating debt-free. Financial Aid Students can also contribute to their own college costs through financial aid, which makes college more affordable. Financial aid comes in two main forms: Gift aid, including grants and scholarships, is money the college gives you that reduces the amount you pay; self-help aid just makes it easier for you to pay for college with your own money. Gift aid can reduce the cost of college quite a bit. The College Board reports that in 2014-15, the average in-state price for a four-year public college was $9,410 per year. However, the average net price, after gift aid, was only $3,980. Self-help aid, including loans and work-study jobs, can pay for the rest. Aid can also be need-based or merit-based. Need-based aid, such as grants, depends on how much your family can afford. If your income is low, you can get more financial aid. Merit-based aid, such as scholarships, usually depends on the student’s abilities. Students can get scholarships for having good grades, high test scores, or some special talent, such as art or sports. This means your children can help pay their own college costs by working hard in school, getting good grades, and honing their talents. Free and Affordable Colleges Students can also keep their college costs down by choosing a school that’s more affordable. One common choice is to go to a community college for the first two years. At these schools, Demos found, the average net price is typically lower, ranging from $4,188 to $15,149 per year. Students can lower their costs even more by living at home while attending a community college. That way, they only need to pay for tuition and fees, which cost an average of $3,440 per year, according to the College Board. That’s well within the amount students can earn through part-time and summer work. Some colleges aren’t only affordable; they’re actually free. All across the country, there are colleges that offer free tuition – and sometimes room and board as well – to students who meet their strict criteria. The best-known free colleges are the military service academies, such as West Point and the U.S. Naval Academy. At these government-funded schools, all students attend free of charge. In exchange, they pledge to serve five years in the military after they graduate. Other free colleges, such as Berea College in Kentucky and the College of the Ozarks in Missouri, require students to work on campus in exchange for tuition. Still others offer free tuition to students who want to train for a specific field, such as music, the ministry, or naval engineering. And in several states, community colleges offer two years of education for free to any student whose grades are good enough. Alternative Careers Parents often knock themselves out paying for college because most high-paying jobs these days require a college degree. However, there are some notable exceptions to this rule. According to the Bureau of Labor Statistics, fields that can offer a high salary without a college degree include:
Most of these jobs require only on-the-job training. For a few, such as elevator installation and repair, you must complete an apprenticeship – a period of intensive training lasting one to six years. During this time, you earn only a modest wage for your work, but it’s still a lot cheaper than paying for four years of college. But all and all being a parent you should focus on teaching kids about money management and the real value of money as, it is the most important lesson they need throughout their life. How to Teach Kids About Money
As a parent, you may be wondering how to teach kids about money. There are several different educational money games that are not only beneficial in the academic sense but also fun enough to keep your child's attention throughout the learning process. So when do you introduce your child to these educational money games? I believe that you should start these lessons during the preschool years. The introductory level money games will help your child to identify the different coins and their values. Once they master these skills, you can move on to the secondary games which allows the child to test his or her new knowledge while having fun with role play. My experience with my own children has always shown me that they learn best when they are playing games and having fun. Below is a list of fun and educational money games that I used with my own boys to teach them the different aspects and fundamentals of money.
Educational Money Games for Kids - Secondary Games Once your child masters the introductory money games, you can move on to the secondary games. Your child will enjoy figuring out what kind and how much money they will need in this pretend play world. Here are three more fun and educational money games to play with your child.
Which educational money game is your favorite?
The Importance of Teaching Kids About Money Teaching your kids about the fundamentals and value of money can be fun and educational at the same time. Start out slow and work your way to the more challenging games. Keep the learning going by allowing your kids to pay for the bill at the restaurant or having them make the deposit at the bank. By playing these types of educational games with your kids and letting them participate in real life situations, you are teaching them the value of money and the important role it plays in our everyday world. I hope you have found some fun and educational games to start teaching your kids about money. Do you have any other games or fun ways to teach children about money? Feel free to leave your ideas or any other comments in the section provided below. I worked throughout college, and firmly believe it’s important to hold down a job while in school. But over the years, I’ve met people who never worked a day in college, and I clearly recall one person telling me he didn’t plan to get his first job until after graduation. While this isn’t a strategy I recommend, it’s definitely a popular one.
Working while completing a degree isn’t easy. It’s a juggling act, and if you have student loans or scholarships that cover the cost of tuition – plus your parents footing the bill for your living expenses – you may reason that you don’t need a job. But aside from monetary need, there are lots of reasons to maintain employment while in school. Benefits of Working While in College 1. Reduces College Debt For some coeds, student loans are the only way to afford the cost of tuition. But, like any other type of financing, student loans – whether federal or private – must be repaid. With the annual cost of tuition, room, and board at public colleges averaging $13,600 according to the National Center for Education Statistics, it’s no surprise that many students look for ways to save money. In many cases, a job won’t replace the need for student loans, but it can offset the amount you have to borrow by covering the cost of room, board, books, or other supplies. And while student loan repayment isn’t required until after graduation, a job could allow you to make regular interest payments while in school, significantly reducing how much you owe post-graduation. 2. Increases Cash Flow If your parents give you money for living expenses, it’s probably just enough to get by. If you need extra cash for clothes, trips, or other entertainment, you may find yourself begging or borrowing to fund your fun. Extra expenses are going to pop up, and your parents may not be able to dip into their wallets at every request. A part-time job can supplement the cash you receive – plus, earning your own money gives you a measure of independence. Too often, college students apply for student credit cards, then use these cards to bridge financial gaps. However, with extra money in your pocket from a part-time job, you don’t have to rely on plastic. You can avoid high-interest debt while still enjoying your college experience. 3. Provides Money Management Skills Nobody learns how to manage money overnight and money management for children is the most vital thing in a child's life. Postponing your first job until after graduation may give you extra study (or party) time, but delaying entry into the workforce may not contribute to a strong familiarity with personal finance. If you never earn a paycheck or pay a bill during college, do you really think you’ll be a natural when you’re on your own? No one is asking you to fully support yourself while in school, but if you take responsibility for personal expenses, such as cell phone, transportation, and entertainment costs, you’ll learn how to manage your money. Once you move on to the “real” world, these money management skills compound so that the transition to life as a self-supporting adult comes more easily. Having a job while in school also encourages simple budgeting. Budgeting is the practice of creating a spending plan for your earnings – tracking how much you bring in versus how much you pay out, striving to keep your expenses less than your income. When you budget, you’re deciding how to spend each dollar to avoid overspending, grow your savings, and keep your personal finances in check. 4. Develops Time Management Skills After graduation you may find yourself in a fast-paced, demanding position. When deadlines pile up, it may seem impossible to do everything on your to-do list in a single, eight-hour workday. Surviving in the workplace requires good scheduling and time management skills – skills you can develop while working in college. Holding down a job while in college puts a lot on your plate – you can’t just go with the flow and hope for the best. Every hour of every day must be scheduled, and if you don’t organize, prioritize, and take control of your time, you may end up dropping the ball. It’s better to make these adjustments while in college, rather than struggling with life’s realities after you graduate. 5. Puts You Ahead of the Competition Gaining work experience while in college puts you ahead of the competition. Even a simple internship, whether paid or unpaid, shows potential employers that you know your way around an office. This helps to set you apart from other new graduates who are also seeking jobs. Of course, employers need to know you did well in school, too – particularly if you’re seeking a job related to your degree. If you manage to graduate at the top of your class while holding down a job (or at the very least, graduate with good grades), potential employers are bound to be impressed. Many families are being hit hard by the recent economic recession, and will likely celebrate Christmas a little less extravagantly than usual as a result. This might mean making cheap homemade Christmas decorations and ornaments or buying dollar store items, using more frugal Christmas holiday gift ideas, and starting Christmas shopping early to save money and reduce holiday stress.
You may be able to relate. Perhaps your kids are expecting the normal mounds of presents on Christmas day, but this year, it’s just not in the budget. So what are you to do? Certainly you can’t disappoint the kids, but at the same time you can’t afford to live beyond your means either. One answer to this predicament is to simply be honest about your financial state with your kids. Below are 8 key reasons why this may be a good option in order to teach your kids about money. 8 Reasons to Be Honest with Your Kids About Finances 1. Be A Good Role Model If you’re like me, you always want to be a good role model for your kids in all aspects of life. However, we often struggle as a nation to show our children how to respect and handle money in a proper way. If you’re struggling financially, you can be a good role model to your kids by showing them that you refuse to live beyond your means even when it’s holiday time. Buying gifts is not a good reason to use credit cards and pile on consumer debt, and teaching kids not to borrow money whenever possible is an important lesson. Demonstrate to your kids how you handle and budget your money responsibly. This could be a priceless learning opportunity for them that leaves a lasting impression even into their adult lives. 2. Avoid Overspending If you are honest with your kids and tell them upfront that they will not be receiving as many gifts this year, it should help avoid overspending and minimize some of the disappointment. It is hard not to buy your kids lots of gifts, but if you discuss the situation with them, and they know what to expect, it’ll be much easier for you to stick with your budget and prevent any overspending. This might also be a good time to teaching teens about money and also to save by creating a piggy bank or by using an online family allowance management tool like ThreeJars. That way, they can still earn some of the toys and items that they were hoping to get for Christmas by saving up on their own. 3. Teach Honesty The best way to teach your kids virtues is by being virtuous yourself. As the saying goes, you must practice what you preach. In order to be honest, you not only need to tell the truth, but you also cannot withhold the truth. This of course includes information concerning your difficult finances. You may think that it’s better to keep your kids in the dark with some issues (and there are some instances where this is true), but finances have a large impact on your kids’ everyday lives and they should understand what’s going on. 4. Bring The Family Closer Together Life isn’t always easy, but it’s more manageable when you focus on the good in a situation. One of the positive things about any difficult situation is that it brings people closer together. So why not use bad for good by building stronger bonds in your family during the holiday season! 5. Get The Kids’ Help Kids are very smart. They question everything and think outside the box. I’m not saying that you should rely on your kids to come up with ways to get you out of a sticky situation. What I am saying is that it’s okay to ask your kids what they think they can do differently to help the family. Although parents are ultimately responsible, this is a great way to teach kids responsibility as they jump in to contribute. 6. Show Your Kids The Real World In the real world, money does not grow on trees, and sometimes, money is tight. By being honest with your kids, you have a springboard to talk to them about being realistic in regards to money. Many families go through hard financial times, and it is nothing to be ashamed of. Help your kids realize that they can’t always get what they want and that there are more important meanings of holidays than just gifts. That’s great financial advice you can give as a parent. 7. Help Them To Avoid Making the Same Mistakes If you are in a difficult financial situation because of no fault of your own, this doesn’t apply to you. However, if you made some poor decisions, let’s say in regards to credit, then this is a perfect time to teach your kids about about your mistakes and how they can avoid the same traps. They will see the consequences of poor decisions and irresponsible spending first hand and be much better off because of it. 8. Be Optimistic Show your kids that despite challenging times, you are still hopeful and optimistic about a wonderful Christmas and a fruitful new year. Be an example of how to take a tough situation into your own hands. And if you are a religious family, demonstrate to your kids that you still have faith despite the fact that you are perhaps not being blessed financially. Should You Be Honest With Your Kids About Having Lots of Money? Consider now the flip side. What about families that have lots of money? Should they also be honest with their kids about their financial situation? Absolutely! Show your kids that having money doesn’t mean you can go on an all-out shopping spree. You still need to be responsible with your money even if there seems to be a large supply now. How to be Honest With Your Kids About Money It can be difficult to discuss a stressful topic like money with your children. Here are a few tips to make it a little easier:
There are two general schools of thought in regards to paying kids an allowance: Kids should earn money in exchange for doing chores, or kids should not be paid for regular contributions that are expected of every family member. In the latter case, kids are either regularly given money unconditionally, given money as needed, or they must earn it some other way.
There are pros and cons to every method of administering an allowance to children. However, the ultimate point of the allowance, regardless of how it is given, is to teaching kids about money management skills. It is apparent that the skills necessary to manage money effectively are not being learned in school, but must begin at home. A 2008 survey by Jump$tart Coalition for Personal Financial Literacy found that college students who had taken financial management courses in high school fared no better in money management than students who had not taken such a course, while a June 2010 study by Capital One Financial Corporation found that almost half of graduating high school seniors didn’t feel competent to handle their own finances. Interestingly, the 2010 study also found that the more frequently kids talked to their parents about money, the more capable they felt in managing their own finances. What this suggests is that simply providing your kids an allowance isn’t enough. According to Lewis Mandell, Ph.D. and author of the 2008 Jump$tart survey, an allowance must be combined with regular discussions about how to manage the money. Types of Allowances If you do choose to give an allowance, there are several options to consider. 1. The Unconditional Allowance The unconditional allowance consists of giving a regular amount of money without requiring the child to earn the money by doing chores. On the plus side, any allowance given weekly, biweekly, or monthly gives your child the opportunity to manage money on a regular basis in a way that’s similar to a paycheck. It’s easier to apportion funds for specific purposes, and the child can plan ahead based on expected future income. The downside is that this method doesn’t teach your child that pay is compensation for a job well-done. This is especially true where the weekly allowance is supposed to be based on the child doing chores regularly, but there is no effort on the part of the parents to make sure that the chores are done – meaning the money is essentially free. This viewpoint is borne out by Mandell’s research. According to a 2000 Jump$tart Coalition survey entitled “Improving Financial Literacy – What Schools and Parents Can and Cannot Do,” kids who received an unconditional allowance had the lowest rates of financial literacy and were more likely to have a poorer work ethic. 2. The “Pay as Needed” Allowance With a “pay as needed” allowance, kids don’t regularly receive a set amount of money, but instead ask their parents for money as they need it. On the negative side, the kids haven’t necessarily done anything to earn this money, and if it is in fact contingent on the assumption that they are regularly doing chores, the correlation is neither immediate nor strong. This allowance structure also doesn’t provide money consistently, which makes it difficult for a child to save for future expenditures. However, it does necessitate frequent discussions about money, as each request must be evaluated on its merits. Ideally, under this scenario, if your child wants an e-reader, an aquarium, or a new bike, and there is no major holiday or birthday in sight, he or she would ask you for the money and you would determine whether your child has earned the money or what she or he can do to earn it, or a portion of it. This scenario forces both you and your child to consider money management each time a situation arises. This method may be suitable for parents who don’t feel kids should earn money for doing chores, but should rather receive the funds simply by virtue of being a member of the family. 3. The “Earn Money for Chores” Allowance This is the most common type of allowance. Kids are expected to do certain chores around the house in exchange for money. This is often a set amount of money for a list of chores that must be done each week. The benefits are that the child sees a direct correlation between effort and the money he or she receives. But for this to be effective, there must be consequences when the chores are not done; this, in turn, requires parents to keep track. And if there are several children in the household, that may be difficult. An alternative is to have a list of chores with a set price per chore. You might require your child to choose a minimum number of chores, or leave it up to her or him. More involved work pays more money, while quick or easy tasks pay less. If your child doesn’t do the work, then he or she should not be given spending money. 4. The Hybrid This is the method I and many other parents use. As a contributing member of the family, my 13-year-old son is expected to do certain chores around the house for free. He can earn money for tackling larger tasks, many of which he can choose, some of which he cannot; the amount he earns depends on the difficulty of the task or how long it takes. This forces us to discuss money each time he takes on a larger task. My son shovels snow, does light yard work, empties the dishwasher, makes his bed, takes care of his pets, and does some light housework, all without pay. For bigger jobs, such as heavy cleaning, a big yard project, or a great deal of shoveling, he gets paid per job. When he wants to earn extra cash, he knows he can ask me for a job or project, and I can always find something. I went with this arrangement because my son would like to own his own business someday, and this is a way of teaching him that the harder he works, the more money he makes. It’s a lesson he’ll learn eventually in the working world, but why not start now? However, this model is not without its drawbacks. When I have a big job that I need help with (like cleaning the basement), if it’s something he’s opposed to doing, no amount of money can entice him to help. In that case, I remind him that he can work for pay or work for free – but either way, he’s going to work. Be Flexible It’s important to allow yourself some flexibility. The method you end up using may not be what you started with, as your child may not respond to positive or negative reinforcement as initially expected. Ultimately, you could find that you need to change your method to get the best results. What Is the Going Rate? If your child comes home from school with stories about the exorbitant amounts of money his or her friends get for their allowances, consider this simple guideline before caving in to demands to “keep up with the Joneses.” A general rule of thumb is to pay $1 per year of age on a weekly basis, so a 10-year-old would earn $10 per week, a 14-year-old would earn $14 per week, and so on. If this seems high (or low) to you, you can come up with whatever seems reasonable based on how much work gets done (if you link the allowance to chores), how many children you give an allowance to, what your allowance budget is, and what type of allowance system you use. If a straight $5 or $10 per week (or even per month) makes more sense to you than paying a dollar per year of age, then pay what works for you. The point is to teach your kids money management and the value of money. If you pay them too much, even if their friends “earn” this amount, you may encourage them to feel entitled to money as opposed to instilling the desire to work for it and the pride in earning it. Where Does the Money Go? It isn’t enough to give kids their own money and expect them to learn responsibility. We as parents must also teach them to manage it, because when left to their own devices, few kids will manage money well. A 2012 survey by the American Institute of CPAs found that the average American child makes around $780 per year from his or her allowance, or $65 per month. However, only 1% of parents said their kids actually save any of their allowance. Instead, most of the money is spent on toys and while hanging out with their friends. Teach Kids to Apportion Funds Just like we earmark (or are supposed to earmark) a percentage of our paychecks toward savings and retirement, we should teach our kids not to blow all their money as soon as they get it. A portion of each allotment may be utilized for immediate spending, but a portion should also go into savings. Teaching kids the importance of building up a savings fund is extremely valuable. You may also want to encourage children to reserve a percentage of their earnings to donate to charity. Having them choose the charity of their choice will make them more likely to set aside the money. Just like we give to charities that matter to us, children also need to give to a charity that matters to them, or they won’t be motivated to do it. A simple three-jar method can be an effective means to help kids distribute their money and watch their savings grow. Get three large jars and label accordingly: spending, saving, and charity. Older teens, especially those with part-time jobs, should also be encouraged to save some of their money for future expenses, such as college, a car, or a trip. Allow Them to Spend Part of teaching money management is allowing kids to spend their hard-earned money on something they truly want. My son keeps numerous tanks of pet fish, and as long as he takes care of them, it doesn’t matter to me if he wants to spend his money on purple gravel or more aquarium plants. Kids also need to learn that work merits rewards. With age comes greater responsibility, and that includes being responsible for personal spending money. Younger teens, especially those that might make money doing odd jobs such as cutting grass, raking leaves, or babysitting, might be expected to pay their own way at the movies or when they go out to eat with their friends. Older teens may be expected to pay for gas or contribute money toward the family cellphone plan, as well as pay for some of their personal expenses. Different Chores for Different Ages If you’d like to link your child’s allowance to chores, how early should you start? Kids as young as the age of three may not fully grasp the concept of an allowance, but they can start learning family responsibility by performing a few easy tasks. Here are some appropriate chores for kids of all ages:
While these are general guidelines, you are the best judge of your child’s maturity level. You don’t want to force kids to perform chores (such as lawn mowing) that they aren’t capable of performing well or comfortable doing. On the other hand, I found that it doesn’t hurt to ask them for ideas. My son, when he was not yet handy with a lawnmower, surprised me by offering to trim the bushes with the hedge clippers. I was hesitant, but he proved to be very capable, and actually enjoys doing it. My son also enjoys snow shoveling, so that job gets left to him with my blessing. If kids are allowed to concentrate on chores they like or don’t mind doing, they are more likely to be consistent with helping out. They must, of course, have to do chores they don’t like, but I’ll often give my son a choice. Knowing that he hates cleaning the bathroom, I’ll give him a choice of that or vacuuming, knowing he’ll choose the latter and figure he got off easy. As long as work gets done and I have help around the house, I’m not going to be too picky about which chores he does. Chore Tracking If you are going to use chores to keep track of what your kids earn, you might find it helpful to use a chore chart or house cleaning schedule. You can find many types of charts on the Internet for free, such as those found on KidPointz.com. This is especially handy if you must keep track of chores for more than one child. You can also create your own chart. A chart provides a good visual for kids of all ages. Young kids might like to put stickers on the chart once they’ve completed a chore, as it gives them a sense of pride and accomplishment. Older kids can easily see which chores they have completed, which chores have yet to be completed, and (if you pay per chore) how much money they can expect to receive for the week or month. As a parent, a chart allows you to keep track of what you owe, especially if under your allowance system you subtract from your child’s allowance for chores that weren’t done, or add payment for chores that are completed in addition to the regular work you expect to be done. Other Ways to Teach Money Management Giving an allowance isn’t the only way to teach your kids about money – and there is no rule that says it can’t be fun. You can also teach your kids money management skills by playing board games like Monopoly and The Game of Life. Kids can learn about money and investments, and it provides you with an opportunity to have financial discussions with them in a way that doesn’t turn them off or bore them to tears. To begin to teach young children and toddlers the value of money, set up a pretend store and show them how to pay for things and how to save for things they can’t afford. There are also online money games available for kids of all ages, like those found at DoughMain. Sesame Street offers several multimedia programs for younger kids about spending and saving, including one called “For Me, For You, For Later.” Final Word There are different schools of thought as to what type of an allowance is appropriate – but regardless of what kind of system you use to funnel money to your kids, the most important component is to have frequent discussions about how they manage their money. It’s so easy to get caught up in the bustle of our daily lives and forget the long-term consequences of our actions (or of our inaction). As parents, our primary job is to prepare our children to successfully handle life in the world by teaching them crucial skills, and money management is certainly one of them. Imagine what the world would look like if kids learned at a very early age not only how to handle money, but how to make the most of it. I imagine a diminished U.S. national debt, paid off cars and mortgages, and no such thing as credit card debt.
But that education would have to start early, and since not many of us had the luxury of learning the ins and outs of money while we were still young, that kind of world is still a pipe dream. Today’s kids, however, have the chance to be the generation that builds a more money-smart society. Kids are already learning from educational software programs and kids websites for money management, and fortunately, a few of the best finance apps are designed specifically for kids and their needs. Free and low-cost apps offer great help when you’re teaching kids about money. Sign up for a BBVA Online Checking account by 8/21/2020 and get up to a $250 bonus and no monthly fees.Below are some of the best apps for devices like the iPhone, iPod, iPad, and Android smartphones. Top 5 Money Apps for Kids 1. P2K Money Price: Free Available for: iPhone, iPad, iPod Touch Features:
P2K is specifically geared toward kids’ simple financial needs. It teaches children to keep track of income like an allowance or payments for doing chores. It also offers cute motivational features such as the ability to include photos of wish list items and an option to view a history of purchases and decide whether they were worth the cost or not. 2. Kids Money Price: Free Available for: iPhone, iPad, iPod Touch Features:
Kids Money, by Apps Rocket, teaches your child about saving and planning for long-term purchases. When your kid finds a bigger-ticket item that they want to buy, like a bike or guitar, he or she will input the price of the item along with expected earnings. The program will help your kids evaluate – and meet – their goals. For instance, if your child wants to buy a $200 bike item with a $20 weekly allowance, the app will report that it’ll take ten weeks of no spending to save enough money. And when other expenses come up, the program will subtract that amount and provide a new estimated purchase date. 3. Save! The Game Price: Free Available for: iPhone, iPad, iPod Touch Features:
Mass Mutual developed Save! The Game to teach kids the difference between needs and wants. In this 3D virtual fantasy game, kids collect money and have to avoid losing it all to the “I wannas.” Conveniently, the game fits in well with Mass Mutual’s Time for Kids website, which has plenty of valuable money lessons for kids. 4. Bank of Mom Price: $1.99 Available for: iPhone, iPad, iPod Touch Features:
Designed by Gomu Gomu, the Bank of Mom app will teach your kids about lines of credit. You can give your kids a cash credit for their allowance or to pay them for chores. When they want to make a “withdrawal,” they request one from their “bank,” which you control. In addition, kids can bank time for leisure activities like watching TV, playing video games, or going to the mall with friends. For instance, if your child raked the leaves, he or she can bank that time and then withdraw “credits” to use for time at the movies with friends. You can manage multiple accounts with the app, and even email transaction details to your kids. Final Word Teaching kids about money doesn’t have to be boring. In fact, with the right apps and games, money management can become your kid’s favorite subject. As high school students prepare to make their grand entrance into the “real world,” one of the many valuable lessons they need to learn is how to manage their money. You may have said to them, “Money doesn’t grow on trees,” but learning how to handle their own finances goes beyond that time-honored saying.
Money management for children is about planning, analyzing and assuming responsibility for one’s finances. Whether your teen is going to attend college in the fall, start their career, travel the world, or simply hasn’t made up their mind about life after high school, an understanding of money beyond the “Bank of Mom and Dad” is important. According to the Consumer Financial Protection Bureau’s report, Building Blocks to Financial Capabilities, establishing good financial decision-making habits in the teen years helps people better navigate their day-to-day financial lives as adults. They are better able to set goals, control impulses and follow through on financial decisions. Here are four ways to get started: 1. Talk with your teen about wants, needs, and tradeoffs According to a 2016 study by T. Rowe Price on parents, kids and money, only 56% of parents said that they have held conversations about money with their kids. So still nearly half of all parents have room for improvement! Brian Page, educator and financial literacy leader at the Reading Community School District, suggests that there are certain financial values that can only be instilled in teens through their parents. When it comes to money, he says it boils down to values. “The most important conversation to have with your son or daughter is on what your values are and why it’s so important to spend your money on what you value,” says Page. Tell your teen why you’re spending your money on a college education or on memorable experiences, rather than on stuff. Discuss the difference between wants and needs to help teach them about controlling impulse-buying. Talk to them about making tradeoffs to help them choose less expensive alternatives. For example, if your teen wants to see a movie, urge them to consider renting it and watching with friends, splitting the cost that way. Page encourages parents to talk with their kids about money decisions so they can learn how to use it as a tool to build wealth. 2. Get them to start budgeting When it comes to budgeting, Page says the focus should be on cash flow management, or the ability to monitor, analyze and adjust one’s personal budget. That knowledge can help create financial security, even when times get tough. “Life is not oftentimes as simple as one line after another, it’s more of a rollercoaster,” he says. When you create a budget, Page recommends first picturing what you want your life to look like. It’s sort of like mapping out your life, but through your finances. Once you begin budgeting, you will be able to track your spending and see where your money is going, and see if it is helping fulfill that initial image. Page says that when you pass this skill on to your teen, they should be able to see how their financial choices impact their dreams and goals. A good way to get your teen into the habit of tracking their spending is by having them print out their bank statements. Susan Beacham, CEO of Money Savvy Generation and co-author of Official Money Guide for College Students, says that when students highlight and jot down what they are spending their money on, it helps them get an idea of how they can budget better. She encourages parents to hold meetings with their teens to go over expenses, budgets and expectations to ensure that they are set up to succeed. 3. Save, save, save The more young people save the more cushion they will have. Saving allows them to have money, even when they don’t need it, as opposed to needing it and not having it. Another way to encourage them to save is by discussing financial goal-setting. Tiffany Aliche, Founder of CLD Financial Life LLC, says, “When young people save for something, it changes their thinking about how they spend their money.” Just like with any goals, saving can be for the short, middle, or long-term. 4. Talk with teens about credit and credit cards If your teen hasn’t received a promotional piece of mail from a bank with a credit card offer, they will soon. Page says that it’s best to talk to kids about credit cards and about the importance of building up a credit score before they have a physical card in their hands. “Building credit is a wealth building strategy,” says Page. Your credit score is essentially how trustworthy financial institutions think you are based on your prior credit experience. Meaning if they give you money, are you likely to pay it back? It’s how banks decide if they will loan you money and the total amount they’ll give you to spend on your credit card. Often, for young people who have no credit history, a parent or guardian can add them to their credit card to help them build a credit history. If your teen does decide to open a credit card account, the best way to manage their accounts is to keep their credit card use low. Building good credit involves not using all the money that is available to you on the card. 30 percent is the ideal usage to maintain a high credit score. So if they have a limit of $200, they should only have $60 worth of charges. Paying the balance in full every month also helps build a stronger credit score, since it shows that you are able to repay the loan. Here is a list of credit scores and how they rank:
Also make sure teens know the importance of paying their bills on-time and in-full in order to avoid interest charges. Interest is a loan expense charge that borrowers pay lenders. If you have a credit card, that’s basically a loan the bank gives you on a monthly basis. The interest amount is calculated as a percentage of the unpaid amount of debt. So if you only make a minimum payment and don’t pay off the credit card in-full each month, they will charge you interest on the remaining amount of charges. Therefore if your teen buys a cheeseburger on their credit card for $6 and they don’t pay their credit card, and their interest rate is 19-percent, that burger actually costs them $7.14. Credit cards also often charge late fees if no payment is made on time, which is a charge on top of interest charges. As mentioned above, teens just starting to build their credit can often use the help of parents or guardians. Aliche recommends “credit card piggybacking.” Credit piggybacking, also referred to as credit sharing, is when a parent or guardian adds a teen as an authorized user to a credit card account to help them establish and build credit. Aliche says that it works best with secured credit cards. A secured credit card is a line of credit that is secured by a deposited amount of money into an account by the card issuer. Therefore, if a parent deposits $500 into the account, the student will have a spending limit of $500. The money in the account ensures that your teen does not over-spend. You can help them manage their spending by tracking their spending since they will be on your account. Think of money management as a tool. Aliche says, “It is like a hammer, therefore you can build or destroy with it.” Remember also that your kid takes their cues from you, and it is important at this stage to show them how to build. Each year, nearly 70 percent of high school seniors attend college in the fall following graduation. And regardless of their backgrounds, academic preparedness, and college choice, nearly all will experience some level of anxiety associated with the transition from high school to college. As a parent, you probably want to make this transition as smooth as possible. But knowing where to start can be a challenge. Common Freshmen Thoughts According to a national study, Your First College Year (YFCY), the transition from high school to college is no easy task for most 18-year-olds. In fact, the YFCY study, which was designed specifically to track first-year students, found that not all new college freshman can make the adjustment. Only about 75 percent of students at a four-year college make it to the second year and just over half of students at two-year institutions will return their second year. These figures are cause for concern for parents, especially if they are forking over thousands of dollars to help pay for college or co-signing on huge loans. So, what can concerned parents do to alleviate some of the stress and anxiety their son or daughter is experiencing? Most college administrators suggest starting with an understanding of the concerns plaguing many college freshmen today. According to the YFCY, these worries include paying for college, struggling with homesickness, feeling overwhelmed by their responsibilities and coursework, trying to meet new people, adjusting to the social scene, and balancing social pressures with academic demands. What Parents Can Expect As a parent of a college freshman, people have probably already warned you to expect the unexpected. What makes this even harder, though, is that freshman year is the time in a student's life when you have to allow them to become autonomous and self-reliant. And while you can’t always rush in and fix things for them, you can be a source of support and encouragement. In fact, a survey conducted by the Jed Foundation found that parents are the primary source of support for 63 percent of college students experiencing emotional distress. The key is knowing when to help, when to offer advice and when to let them figure it out on their own. Here are the top things parents can expect to witness during their student’s freshman year and what you should do in response. They Might Feel Overwhelmed In the YFCY study, students frequently reported feeling overwhelmed by all that they had to do. Keeping up with their homework, completing assignments on time and pulling in decent grades often plagues students, especially those that are used to performing well in school. Keep in mind that the college workload is different from high school and professors may approach teaching much differently. When students are feeling overwhelmed, it is important for parents to help them break things down into more manageable parts. Looking at a long list of reading assignments, papers that are due and lab work that needs to be completed can be overwhelming. But talking to students about how to manage these things day-to-day can help ease their mind. They Might Be Lonely or Homesick If your freshman is homesick, do not worry—they are not alone. According to the YFCY study, 66 percent of first-year students report feeling lonely or homesick, especially as the newness of the college experience wears off and the fall days turn into winter months. What’s more, students who had a strong social network at home can be frustrated by the fact that they have to start all over. They may miss their high school friends and the comfort those relationships brought them. While it can be difficult to listen to your child talks about missing home, you do not want to rush in and offer to fly them home right away. Many times, students just unload their unhappy thoughts and feelings on you because you are a safe person. Then, the next minute, they're rushing off to dinner with their dorm mates without a care in the world. Wait to see if these feelings are ongoing or just come and go as your student adjusts to life away from home before you attempt to address the situation. They May Have Roommate Issues It should come as no surprise that many freshmen struggle with roommate issues. Whether it is the fact that they have a stranger living with them or something more significant like a bullying roommate, roommate issues are bound to happen. After all, some students are morning people and others are night owls. Likewise, some are clean freaks and others are total slobs. The key is to give students the skills they need to handle these bumps in the road. For instance, if the roommate is a bully, students need guidance not only on how to handle the situation but how to take a stand against the bullying as well. They May Have Trouble Adjusting to the Social Scene When it comes to the pressures of balancing going out with the demands of their coursework, many students struggle to exercise self-control when they have so much freedom. In fact, partying is a common activity among new students. And quite possibly for the first time ever, these students are struggling to make decisions without their parents’ restrictions. Many students report that the freedom that comes with college is often way too much for them to handle. At first, they think, “Wow! This is going to be great.” But many students quickly realize that too much going out can really take a toll on their studies and their grades. They May Struggle With Time Management For many freshmen, this is the first time in years that they have had free time. Many of these students had maxed out schedules while in high school. They were often taking difficult classes and involved in a number of outside activities like sports and school groups that left very little time for anything else. But now that they are in college, they have three classes early in the day and then nothing else on the schedule. Too much free time can lead to procrastination and poor time management because they falsely believe that they have all the time in the world to complete their work. But then, before they know it, the day is gone and they still have 50 pages of reading and a term paper to write. Ideally, parents will work with their students prior to college to establish time management skills. Strategies for Helping You play a significant role in helping your freshman transition to college. And while it may feel like one of the most emotional, confusing, and overwhelming roles to date, the importance of what you have to offer cannot be overstated. Here are some suggestions on how you can help your college freshman transition from high school to college life. Also before entering college you should focus on teaching teens about money management, as it will going to help them throughout the life. Turn Off Your Helicopter There is no place for helicopter parenting at the college level. Remember, every time you step in to rescue your student, you are inhibiting their growth and development as an independent person. You also are sending them the message that you do not think they are capable, resourceful or strong enough to handle this situation on their own. What’s more, you are denying them the opportunity to develop critical problem-solving skills. Some research suggests that overparenting kids can hinder career opportunities and work behaviors, especially if they never learn to do anything on their own. Cut the Cord Sooner Rather Than Later Before students leave for college, it is important for parents to allow them an appropriate level of independence. In other words, allow them the space to make decisions about how they are going to spend their time, especially the summer before college. In fact, some students have indicated that having a significant amount of freedom the summer before, while still living at home with parents to offer guidance, helped prepare them for the freedom they had at college. Foster Resilience and Mental Toughness Believe it or not, mental toughness, or the ability to bounce back after something difficult happens, can be learned. Look for opportunities to coach your child on how to persevere through the ups and downs of college life. Whether it is a failing grade on a paper or a lost student ID, as a parent you have the opportunity to guide your child through these challenges. And, if they are struggling with the concept of mental toughness, encourage them to research some of the services at their college or university that could help them hone these skills. Learn to Recognize When Something Isn’t Right Loneliness, depression, suicide, substance abuse, and sexual assault are very real issues that plague college students. In fact, many mental health issues present themselves during the college years. Therefore, as a responsible parent, if you suspect that something is not right, you need to take action. If you are having suicidal thoughts, contact the National Suicide Prevention Lifeline at 1-800-273-8255 for support and assistance from a trained counselor. If you or a loved one are in immediate danger, call 911. Contact your student’s resident assistant, the Dean of Students, the student health center, or another resource and have them check on your student if you're concerned. And if they do not listen to you right away, keep asking for help until you find it. These types of concerns should never be ignored. Instead, be sure issues like this are addressed right away. Preparing Your Teen for the Risk of Mental Health Issues in College Listen to What They Have to Say It is important for parents to talk with their students and ask them how they are feeling. Many times, simply expressing what is bugging them or talking through what they are facing is enough to ease the stress and anxiety they are feeling. At this age, it is important for parents to start to take on the role of advisor or coach. And instead of telling their kids what to do, they coach them instead so that they are making the decisions on their own. Encourage a “College Survival” Class, If Offered Many colleges and universities offer a special course for their first-year students. Often dubbed a college survival seminar, this class teaches everything that is needed for transitioning into college life. Many times, the topics include everything from study skills, time management, and personal development, to self-awareness and career exploration all rolled into one. Negotiate How Often You Will Communicate Before your freshman heads off to college, it is important that you know how often you will talk with one another as well as what means of communication you will use. For instance, will you talk on the phone or Skype? Do you plan to text? What about emails? It’s important for parents to stay connected to their students. And it is important that college students need to respect the fact that parents need them to check in from time to time. Discuss Expectations for Visits Home Parents are almost always thrilled when their college freshman makes that first visit home. But that joy often fizzles when they realize things have changed. Too many times, parents expect their kids to behave the same way they did before they left, including being in bed at a reasonable hour. Meanwhile, their students are used to having complete control over their schedules, including when they go out, when they come home, what time they eat, and what time they go to bed. With this in mind, parents need to have an honest discussion about what they would like things to be like when their student is home on break. The key is to be willing to negotiate with the student without the expectation of having total control. Likewise, students need to realize that while parents are often willing to give them some freedom, they do have to be considerate and respectful of the rest of the family's needs. A Word From Verywell Remember, transitioning from high school to college does not have to be a challenge, for you or for your child. With the appropriate guidance and support, parents can make a difference in how their freshmen handle the first year of college. And, with a little patience and perseverance, you will be able to watch them grow into conscientious young adults ready to take on the world. When schools closed in March 2020 due to the spread of the novel coronavirus, most parents prayed it would be a short-term problem. But as time went on, the majority of states closed their schools’ doors for the rest of the school year and you likely found yourself adjusting to schooling at home and online.
You also may have been looking for ways to fill your days. After all, there's only so much time that can be spent watching YouTube videos or doing worksheets. Now, as the 2020–2021 school year approaches, you're probably wondering what the future holds for your kids. Back to School in a Pandemic: What Families Can Expect This Fall Will they be in school full-time, part-time, or not at all? No one knows for sure yet, and the situation will be very different depending on where you live. In fact, according to a survey by AASA, as of June 2020, the School Superintendents Association, 94% of superintendents were not ready to announce their back-to-school plans. Regardless of which back-to-school model your child's school will follow, it's important to be prepared—especially if your kids’ will be distance learning again this school year. No doubt COVID-19 has created a difficult situation, but you can turn this time into something moderately useful if you start thinking outside the box. No matter how old your school-aged kids are, there are life skills that need to be taught. And this school year just might be the perfect time to teach them. After all, you’re officially a "pandemic parent" now—time to start thinking like one. Where to Begin In the words of Queen Elsa, Let. It. Go. School at home doesn’t need to look like a typical classroom, with everyone circled around the kitchen table raising their hands. Traditional schooling is designed to accommodate the needs of 25 kids at a time; your “classroom” probably only has one, two, or three kids in it and can be much more flexible. Plus, the experts are clear: Kids learn best through play, exploration, and hands-on activities. That means they’ll benefit more from a third-grade math lesson that takes place in the kitchen, over a boxed mix of brownies, than one that happens in a textbook. So, as you’re adjusting your own ideas about what learning means for your kids, it’s time to start thinking for real about the gaps in your kid's life skills education. Do they know how to sort laundry? Chop an onion? Recycle cardboard boxes? Sure, they’ll need to know these things eventually—but learning them now means that you can dovetail some of these street smarts with all the book smarts you’re teaching them, too. Here’s a breakdown of some of the best life skills you can teach your kids during school closures by age group, along with suggestions for how you can tie many of them to academic life. Family Activities During COVID-19 Preschoolers (Ages 2–4)Some of the life skills for this age group can be independent ones, but some will still require your assistance or supervision. It’s important to teach them anyway, though, so your kids can keep improving as they get older. Cleaning Up Put your child’s sorting and identifying knowledge to work. Ask them to put their toys in the appropriate bins after they’re done playing, sort their books by color on the shelf, or line up their stuffed animals on their bed by size. You can even invite them to help you sort the laundry. Knowing Emergency Numbers Does your little one know their numbers? Teach them your home and/or cell phone numbers, as well as how to dial 911. Also see if they can memorize their street address, town, and state. You want to be sure they know how to contact close family members or friends should an emergency arise. Keep a list of numbers in a prominent place and have them practice with your supervision. Picking Out Clothes Only in the mind of a 3-year-old do polka dots coordinate with plaids, but you need to choose your battles here. Learning how to get dressed appropriately involves checking the weather and talking about what the day’s activities will include, which is a great way to do a little morning circle time. Setting the Table Looking for an easy way to introduce numbers, counting, and symmetry? Look no further than a table setting, which offers a chance to lay out matching sets of silverware, plates, and cups along with spatial and procedural memorization. Also, allow them the freedom to add a few custom touches to the table like handmade place cards or little pictures for each family member. They will feel proud of their work and look forward to dinner time. Little Kids (Ages 5–7)This is the sweet spot for helpers at home because kids this age love to feel like they’re doing grown-up jobs. Plus, they can actually do stuff. The trickiest part is figuring out when to step in and help, and when to step back and let kids problem-solve on their own. Unless they could create a potentially unsafe situation, err on the side of stepping back. You’ll be surprised at what they can handle. Empowering kids at this age is particularly important during the pandemic. So much of their lives feels uncertain and out of control at times. Providing structure and basic chores will help them feel more in control of their life and situation and hopefully minimize some of the fear they may feel. Performing Basic Cleaning Tasks On top of wiping down sinks and light vacuuming, ask your child to help sort the trash and recycling. Learning which materials are recyclable leads to good conversations about climate change, taking care of the environment, and not producing too much waste. What's more, your kids might get really excited about finding things that are recyclable and making sustainable decisions. Preparing and Sorting Laundry Teach kids how to separate light and dark colors. Ask them to empty out pockets before putting something in the washing machine, and talk about why that one red sock will turn an entire load of whites pink. Aside from helping you with a never-ending chore, you're teaching Properties of Matter 101! Making the Bed This skill is often overlooked during the school-year rush to get out the door in the morning, but you may have more time on your hands now to teach your kids how to make their beds. You could even develop a morning routine that involves making the bed as part of getting ready for the day. Incorporating this chore on a regular basis instills a lifelong habit that will benefit them for the rest of their lives. Developing Cooking Skills Stirring, mixing, shaking, whisking—all these activities are hugely popular with kids. Also popular? Cracking eggs, using the blender (with supervision), and making peanut butter and jelly sandwiches. Look for ways for your kids to help with making meals. And, consider allowing them to assist in the meal planning for the week. How to Teach Kids Kitchen Safety Big Kids (Ages 8–10)Kids in this age group can manage most kid-friendly tasks. But it’s time to think beyond “Can my kid pour the right amount of kibble into the dog’s bowl?” and ask yourself if they can do it at the same time every day without being reminded. They can also begin to take on some of the tasks you didn’t quite trust them with at six or seven—like cooking over a hot stove—as long as you feel they have good judgment and safety knowledge. Long days at home doing online learning without much interaction with their peers can be challenging for this age group. So, be creative in how you get them involved around the house. Even if your kids are back in school this fall, these are important skills for them to learn at this age. Mastering Intermediate Cooking At this age, you can probably teach your kids to scramble eggs, boil water for pasta, and make pancakes. But you can also teach them fractions by setting out measuring cups and asking them to double, triple, or even quadruple an easy recipe. And, if your kids are particularly skilled at this age, allow them to make a family meal (with your supervision of course). Learning to Garden Gardening is one of the single best ways to blend life skills with science. For instance, talk about how much sunlight tomato plants need to grow. You could even work in a discussion about photosynthesis if you're feeling really adventurous. Also talk about the different types of soil and what is best for plants to grow. And make sure you talk about those creepy crawlies invading your garden and eating all the zucchini. Using Common Tools Hammers, screwdrivers, wrenches—most of these tools require physical coordination. But they also require some element of math or physical science in the form of angles, force, momentum, and speed. Look for opportunities for your kids to help out around the house using tools. For instance, have them tighten the screws on the towel rack in the bathroom or help hang a photo in their room. Loading the Dishwasher Believe it or not, you need some spatial intelligence to be able to load a dishwasher so everything fits and actually gets cleaned. Tell your kids it’s just like playing Tetris. Plus, making the task of loading (and unloading) the dishwasher a regular chore shows kids the importance of contributing to the efficient operation of the household. Tweens and Teens (Ages 11+)Okay, time to break out the big guns. Tweens need to learn how to be responsible for their time, money, and personal hygiene; teens should be focusing on the life skills they will need to live independently one day, like balancing a bank account and performing basic household maintenance. So, while it's normal for them to feel a little discouraged about COVID-19 and want to binge on Netflix—especially when they cannot see their friends—take this time to help them refocus their attention and stay positive. Learning new skills can help them feel empowered and confident as well as help them avoid developing a sedentary lifestyle. Managing Money This is math, obviously—and while it’s important to teach money management for children and how not to overspend on their monthly income/allowance, they also need to know several other related skills. This might be calculating interest payments on credit cards and loans, comparing prices on purchases, establishing a budget, and filing a tax return. You could even give them a set amount of money they can spend each month and encourage them to establish a budget on how to spend it. They will quickly realize that money does not go very far. Learning Household Maintenance Can your teen change a light bulb? Pump gas? Unclog a drain? Mow the lawn? If not, it’s time for them to learn. These are “soft skills,” but still much-needed ones that come with plenty of conversation. One day your kids will have be living in a dorm or an apartment while in college or working and they will need these basic skills. There is no better time to learn them than now. Also, be sure they are participating in family chores like cleaning parts of the house like a bathroom and their room. Mastering Personal Responsibility There’s a lot to unpack here, but it’s important for older kids to get comfortable making phone calls, setting up appointments, ordering food, planning meals, and budgeting their own time. In other words, stop hounding them to clean their room so they can go FaceTime their friends; encourage them to set a weekend schedule that leaves time for both. Likewise, if they have some routine doctor's visits coming up like going to the dentist or getting their yearly flu shot, have them make the calls. Learning these skills now will establish the importance of caring for their bodies and engaging in preventative health care in the future. Managing Hygiene If you’re still hounding your tweens and teens to shower regularly, use deodorant, and properly care for their skin, it’s time for them to take charge of their hygiene. Let them choose their own products, decide what time of day they want to shower (a.m. or p.m.), and maintain a haircut or style of choice. Giving them some autonomy here will go along way toward motivating them. Your first student loan payment looks like a lot of money. But you soon discover it doesn’t last as long as you think.
Eating nothing but cold beans for the last two weeks of term is a university rite of passage. But if you don’t want to do it more than once, you will need to learn how to make your money go further. Here are seven money saving tips for student life. 1. Have a budget Planning an actual budget is the best place to start. Then you can see if you’re spending too much, or still have cash to spare. Start by working out your income: your loan, bursaries, grants, anything from the Bank of Mum and Dad, and a part-time job if you’ve got one. Then note down all your regular expenses – rent, phone, broadband and so on. Don’t forget to budget for food and any irregular outgoings like course books and clothes. Anything that’s left, you’re free to spend. It is very important to focus on teaching teens about money as it is going to profit them in a long run. 2. Get a finance app The next step is sticking to that budget – which can be harder than it sounds. The age-old trick is to only take cash with you when you go shopping, or down the student bar. But in an increasingly cashless society, that’s not necessarily practical. A good finance app has two advantages over sticking to cash. Firstly, it can help you define your budget in the first place. Secondly, many allow you to use that budget to put spending limits in place. They won’t block you from making payments, but you will get an automated nag. 3. Use your overdraft wisely Banks know that once you’ve got an account with them, you’re likely to stay for life. That’s why they fall over themselves to attract students. They’ll tempt you with a sizeable free overdraft. Take it. But only use it as a buffer. £0 is still £0, you’ve just got a bit of flex when you need it. The common mistake is to treat it as free money. That might work while you’re studying, but it won’t look so free once you’ve graduated. 4. Be smart in the supermarket After rent, food will be one of your biggest expenses. Thankfully, unlike rent, there’s a lot you can do to spend less in the supermarket. Teach yourself how to cook. The ingredients for homemade food are vastly cheaper than takeaways and shop-bought sandwiches. Do a big weekly shop. You’re less likely to buy more than you budgeted for, and it encourages you to think more about what you’re eating. A good tip is to shop at the end of the day when supermarkets often reduce items they can’t sell as fresh tomorrow. You should also buy supermarket own brands. Try the value option. And buy in bulk. Everything’s cheaper in larger quantities – as long as you’ll actually use it. 5. Keep an eye for student discounts Student discounts are everywhere. Start by getting a student card, which entitles you to thousands of discounts on everything from food and clothing to beauty products and college essentials. Don’t be afraid to ask if a shop has a student discount when you get to the till. Even if it’s not advertised, they’ll often have a policy of giving 10% off for students. You often only need to show your normal student card. And don’t forget the tools of your education. Computers and software often come at steep discounts for students. If you’re a budding photographer or musician, now’s the time to invest in the latest software. 6. Buy second-hand course books Inevitably, there are never enough copies of your key texts in the library, and not everything can come as a digital reading list. Sometimes you have to buy course books. And university textbooks are expensive. Thankfully, there’s usually a thriving second-hand market from students who no longer need them – people who took the same course the year before and now have no use for the book. Your university bookshop can probably point you in the right direction. Otherwise, they’ll doubtless be a forum topic. Just be sure to get the correct edition – textbooks do go out of date. 7. Get a 16-25 railcard – and buy split tickets If you’re likely to ride the rails a lot – going home for the holidays, or visiting friends at other universities – get a 16-25 railcard. It costs £30 for the year, but saves you 1/3 on most journeys. And it works with split ticketing. The UK’s rail system is so fragmented it’s often cheaper to buy multiple small journeys rather than one ticket, often by quite a large margin. Saving for the future
A regular income allows kids to save regularly for the future. It’s an opportunity for them to learn that small savings can add up to something big over the long term. The next time your child wants something big they know they can save up their pocket money to get it. This is a useful way to get your child to act responsibly with their cash – a behaviour that will serve them well in later life. You could further encourage this behaviour by subsidising long term savings. For example, if they’re trying to save up £50 you could encourage them to save by contributing £10 once they reach £40. This can be a positive early saving experience for a child. The value of money If a child doesn’t have to pay for thing themselves – out of their own money – they may not fully appreciate the cost of things. “Giving my kids pocket money actually saved me a fortune. Instead of endless pester power, they were in control of their own budgets and started to learn the value of money: ‘wow, that’s really expensive – I’m not paying that’. And started saving too, for holidays and treats.” - Carol Managing their own budget can help kids to understand what a pound can buy, what a good deal is and how prices compare. They will have to make decisions about what to buy and what not to buy. “It has made them appreciate how much things cost. It’s amazing how price-conscious they are now they have to fund non-essential stuff themselves.” - Lorraine Should children earn their pocket money? Payment is a compelling way to motivate your child to help around the home. This can either be a requirement of receiving pocket money, or a bonus on top of their basic pocket money. There are various kinds of jobs children can do to earn their pocket money, and it’s never too young to start. You might be just as interested in instilling a cooperative work ethic as making use of the cheap domestic labour. “Both my children have the opportunity to earn extra for their money boxes by helping around the house.” - Lucy School results Some parents use financial rewards to encourage good performance at school. 77% of parents in our 2019 survey said they reward their children for getting good grades. Of course it’s not your child’s fault if they struggle with a particular subject, so rewards could be based on effort rather than results. How much pocket money should you give, and when? Children in the UK receive £7.01 in pocket money per week on average. The right amount of pocket money to give depends on the child’s age and your individual circumstances. By the age of seven a child has typically developed some basic concepts relating to finance, according to research undertaken by behaviour experts at Cambridge University. That’s why it’s recommended to get children started with money as young as possible, even if it is small sums. Weaning kids off pocket money When is the right time to stop giving pocket money? You probably don’t want your child relying on you financially forever, so you should encourage them to find part time work when they are old enough. Stopping pocket money altogether might seem too harsh, but it should be low enough to encourage a teenager to get out there and earn their own money. Pocket money is a useful way to prepare your child for the future at the same time teaching kids about money is equally important. From teaching them the value of money, to incentivising housework and academic success, leverage pocket money to your – and their – advantage. Children are living in the family home for longer, some well into adulthood. It can help them avoid spending money on rent and save for a deposit. But isn’t it only fair that they contribute?
Between 1997 and 2017 the number of 20 to 34 year olds living with their parents in the UK rose from 2.4 million to 3.4 million according to a report by think tank Civitas. Parents and grandparents in our intergenerational lending survey estimated that adult children still living at home cost £260 per month on average. 53% admitted that they hadn’t planned financially for having their children at home for so long. It’s time to ask: should parents charge their kids rent? Intergenerational family finance OneFamily research found that most adults living with their parents helped with households bills and/or mortgage payments. It indicates that the one-way ‘Bank of Mum and Dad’ can evolve into intergenerational family finance. It might be hard for you to consider charging your kids rent, as your children may have got used to the ‘Bank of Mum and Dad’ situation. You might feel guilty about making them pay their way but remember paying rent will teach them good lessons about budgeting and will encourage them to save and become independent. How much is fair rent to charge your child?If you don’t already have one, start by drawing up a realistic family budget. There are apps available for this, but a spreadsheet or notebook should do just fine. As family finances becomes intertwined it’s important everyone understands the budget and is transparent about their income and expenditure. OneFamily’s research reveals that two thirds of UK families now talk openly about their finances. Sitting down around the kitchen table once a month to go over the budget could be a great way to improve communication in your family. Once you know what expenses you need to cover you can work out a fair amount to charge your kids for rent. There are a few ways to do this:
The right way to charge is up to you and should depend on your individual circumstances. What is the average rent paid to parents?According to a survey by My Job Quote people over the age of 18 and living with their parents pay on average £230 per month to their parents in rent – 65% less than the £690 median rent in England in 2018. Regionally the savings get even greater, with those in London and Manchester making 90% and 81% savings compared to the local median rent. Parents can choose not to charge their kids rent You don’t have to charge rent. For some it just doesn’t feel right. Pragya Agarwal, an academic and designer living in the North West, has one year old twins and a 19 year old son. She says she would never charge her eldest rent to live under her roof. “I feel that, as a parent, my home is always their home and so they’re always welcome here. My kids have a great sense of responsibility and understand the value of money so I don’t need to charge them rent to teach them this. People’s circumstances, of course, differ.” Alternatively, charge kids rent once they’re earningTasha lives in East Anglia with her husband and three children and writes a parenting blog called Mummy & Moose. When her son turned 16 the family agreed he would contribute to the household once he got his first job. They gave him the choice to either paying a ‘family rate’ of 30% of his wages and continuing to help out with chores, or a 50% ‘lodger rate’ where he didn’t have to do housework. “We figured a percentage was fairer than a set amount as he will be at college so probably won’t be working set hours,” said Tasha. “He would prefer to live for free, as we all would, but what would he learn about being an adult? I’ll let you in on a secret though, we are banking half and we’ll be giving it back when he comes to leave home.” Tasha’s point about banking half is a particularly good way to help a younger child save for the future, if you can afford it. Getting rent from your children may happen naturally Believe it or not, children even volunteer to contribute. Emily Palmer, aged 19 and a newly published author, said she volunteered to contribute towards household costs. “I am a young adult and I offered to pay rent. I started paying rent after releasing my kids’ book on mental health. From my perspective, I couldn’t expect to be costing my parents money once I was earning.” Although some parents would be surprised – or even reject – such an offer from their kids, it does happen. But whether this is something you want or not, it shows that keeping your children in the loop about how much things cost really can reap the benefits of a more unified household. Even if it’s just a quick chat around the kitchen table every now and then.Being a parent it is very important to understand your kids and also focus on them fully in their growing ages. You can teach them so many things and of of them are teaching teens about money, which will eventually help them in every step in future. Today marks ‘Teach Your Children to Save’ day – an important initiative that focuses on the importance of teaching children about all things money-related.
“Start small, and speak often – empower your kids to make decisions about money and saving, offering rewards if they save their pocket money or cash earned from chores,” explained Richard Stone, chief executive of The Share Centre. “You can even talk about investing: tell your children you own a little bit of the companies you shop in every day to spark their interest, or point out famous companies which are doing well or badly,” he added. Here are five ways to get started: Tip 1 – Focus on financial education for kids- We are all naturally reserved when talking about money, but it’s important to do this with your children. Talk about the reason you go to work, what earning money means, and what different things cost. Discuss how much things cost relative to each other and ask your children whether they think that’s right. Tip 2 – Use cash One of the biggest challenges today is that money is intangible. We all use our debit or credit cards and pay with contactless cards. Using cash is tangible and shows children what money is. You can even go one step further and allow them to pay using cash. This helps with maths, adding up the price of things and working out what change they might be due. Tip 3 – Encourage them to earn money Again, this helps to show the value of money and the concept of earning and working. If you pay them in cash, you could then allow them to spend that cash or perhaps take some of it to a bank or building society and put it into a savings account for them. For older children you can have more detailed conversations about savings, interest rates and even investing. The idea they could own a little bit of Tesco or Marks & Spencer makes for an interesting conversation when out shopping in those retailers. Tip 4 – Show them other currencies If you are on holiday overseas, make sure you get some local currency. Explain that not every country uses the same money. Talk about the pictures on the notes – they may well depict the head of state, for example, or places of interest. Explain what the exchange rate is and work out whether familiar things cost the same e.g. a favourite chocolate bar. Tip 5 – Lead by example Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put coins in regularly. You can also show your children what their Junior ISA or Child Trust Fund is worth after saving over a period of time, relative to what you have contributed on their behalf.
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AuthorHi! I am Tim Connolly and I am providing help to parents to bring up their children in a healthy environment. I am working in this profession from last 5 years, if you have any query regarding this please contact me. Archives
June 2021
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