NEW YORK (AP) — At the supermarket, Jamie Corum sets a two-minute timer for her 10-year-old daughter so she can look around. She then resets the time to 10 minutes so her daughter can decide on a purchase, taking into account her budget and how much taxes she will have to pay.
Corum and her wife have made teaching a priority Financial lessons to their three children by using exciting activities to stimulate their interest in topics such as saving and budgeting.
“My goal is for them to have a healthy relationship with money and no insecurities,” said Corum, a cybersecurity expert from Austin, Texas.
Not everyone feels so safe. Money can be a difficult conversation, especially if the parents themselves aren’t entirely comfortable with the topic. But Jennifer Seitz, director of education at Greenlight, a personal finance app for families, said that’s starting to change.
“This generation is really committed to making things better for their children, even if the majority of parents don’t feel equipped to do it,” Seitz said.
There are other banking products to help parents think about their children’s financial future, including children’s debit cards that can be used under parental supervision and apps that gamble money to make it accessible to children.
Some people actually start learning while parenting, like Naseema McElroy, a nurse turned money content writer. When McElroy’s oldest daughter was one year old, she was inspired to learn more about personal finance to pay off debt. As she learned more, she began sharing her knowledge with friends and then with a wider audience online.
“Initially, I wanted to share the lessons I learned about money with my friends because I felt like we learned so late in life and then we all had daughters,” McElroy said.
Many parents want to talk to their children about finances because they haven’t done so yet Financial literacy Growing up, Seitz said.
Here are some expert recommendations if you want to talk to your kids about money:
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Talk about money openly and often
Money conversations can be awkward, especially if your family hasn’t encouraged them. But if you want your kids to handle money in a healthy way, the best thing to do is talk about it, said Carrie Joy Grimes, personal finance expert and founder of WorkMoney, a personal finance nonprofit.
“Have conversations about money in front of your child to normalize it,” Grimes said.
In Corum’s family, the topic of money has become a part of their daily life.
“We talk about how we have a budget for the house, that everything her mom and I bring into the house has a mission, a job,” Corum said.
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“A good place to start is to talk about the cost of things,” said Courtney Pettway, CEO and founder of KidVestors, a financial literacy platform for kids. Pettway recommends asking questions like: How much does this item cost? Why do you want this item? Is it a need or a want? And if they receive compensation, you might ask: How long would it take you to save up for this item?
At the dinner table, while shopping, traveling or shopping for clothes: take everyday situations and transform them into situations Money lessons.
Teach children to make money decisions
An important aspect of personal finance is knowing how to make decisions with money. This can be taught by giving children small amounts of money and allowing them to decide how to spend it, Grimes said.
“I gave (my daughter) enough money so she could use it to make decisions. So she learned early on that she had enough to save for something so she could say no to things and yes to other things,” Grimes said. “Learning to say no, learning to keep money to yourself long enough to get what you want, that’s a really difficult skill.”
“When giving children the opportunity to choose, it’s important that parents don’t judge their decisions,” says Bobbi Rebell, consumer finance expert at BadCredit.org, a personal finance website. Defining decisions as personal preferences rather than right or wrong answers increases children’s confidence in their decision-making process, she said.
Parents can find free financial literacy worksheets for kids at Hands on Banking, a free financial education service from Wells Fargo.
Teach us how to set financial goals
For many children, their first access to money is a grant. Whether it’s saving for a new video game or a bike, setting a goal for your money can be a great way to teach kids the value of saving.
“Recognizing progress, seeing how close you are to the goal, imagining the end goal, and then really celebrating when you reach that goal can help them learn how to turn small financial goals into reality,” Seitz said.
Tip jars can be an analog way to track progress, Pettway said. Encourage your child to put some of the money they receive into a “savings jar,” an “investment jar,” and a “donation jar.” When kids see their jars getting full, they become motivated to keep adding money.
Making children active participants in future plans can also be beneficial, recommends Lindsay Bryan-Podvin, financial therapist and founder of Mind Money Balance, a financial wellness service. For example, if your child wants to attend an expensive sports summer camp, encourage them to save some of the cost from their allowance or summer job.
Allow them to make mistakes
It’s inevitable that children will make mistakes when learning about money. These can be used as an opportunity to learn important money lessons that will be useful for their future, says Rebell. However, it is important to let your children make mistakes instead of solving problems for them.
“If you keep rescuing them, they won’t learn to deal with it,” Rebell said.
Bryan-Podvin also recommends not reacting negatively to mistakes. Intense frustration or anger can damage children’s confidence and make them feel like they have no place to turn to their parents when they make normal mistakes.
“Help them learn to manage their emotions and help them think about how they could do things differently,” she added.
Get creative
Money can often seem boring, so keeping it fun, engaging and entertaining can be the key to keeping your children interested.
For example, when Corum buys things like school supplies, she chooses an appropriate amount from her own budget so her daughter can decide which items she wants. However, when she buys toys or other non-essential items, Corum gives her daughter some of her pocket money or other extra money she may have for special tasks.
Corum gave her children debit cards and uses a family personal finance app connected to the cards to distribute their allowances and monitor their spending. Your children have access to their debit cards through their own app portal, where they can view their spending, save, invest and learn more about personal finance topics.
Apps like Acorns Early, Greenlight, and BusyKid are some of the most popular personal finance apps for families.
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The Associated Press receives support from the Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
https://apnews.com/article/money-kids-finances-wellness-saving-budgeting-f595dcd46c6c1edec5d81adf5fad4027
