The easiest way to destroy your child's desire to learn how to manage money is to make it boring. Instead try and keep it light hearted and casual.
I never "sit" my child down to have money lesson times, instead they are built into the day by having relaxed conversations. I let the topics come up by what is going on and what he can learn from.
Another great way to keep money education fun is to play games.
Here are two articles on games and websites that can help you keep money fun.
Learning how to save money for the future is very important. It is the only way that you can grow any wealth.
So how do you go about teaching your kids to save when you are also struggling?
Here are some ideas that can help both of you!
1. Even small amounts make a big difference. Have your kids start with a piggy bank and challenge them to come up with ways to save even just a penny! For you? Open a savings account and get $25 there each month.
2. Talk about ways to save money. The more your child hears about ways to save, the more they can think about ways to save more!
3. Consider giving your kids who want to spend it all an incentive to save money.
4. Look for items that you can get paid to recycle and put that money to college savings.
5. Read books about saving as a family.
Hopefully these ideas will help you and your child saving more money.
The outstanding in balance of student loans is growing, and growing faster than credit card debt by 18%! In fact it is now the second largest debt outstanding right behind mortgages.
With this increase in debt, we need to make sure our kids understand the debt that they are taking on when heading off to college.
Here are some articles to help you talk to your kids about college costs and loans:
It seems like there are so many types of accounts for kids and saving money for them. From the traditional accounts such as a joint savings, to college accounts like the 529 and the ESA plus custodial accounts and more.
How are you ever supposed to choose what account to start for your child?
Here are two articles that will help you narrow down the choices.
Where to Save for College - this one looks at the best accounts for college savings.
Investing Accounts for Kids - this article goes through what your purpose is in savings and points you in the right direction, then reviews the details of a custodial account.
Ready to start teaching your kids to invest but not sure if they are ready?
Here are some signs that they are ready:
- Are they interested in money and or business? If they are they may be ready to start talking about it and learning more.
- Are they listening to you when you are talking about investing with others? I personally used to hang around and listen to the adults talking about investing - if this is your child then it is time to get them started.
- They are in high school - the sooner they learn the sooner they can start investing and putting aside for the future.
Not sure where to start your kids with investing?
Here are a couple articles that will help get you pointed in the right direction.
Summer is around the corner, and that means the kids are out of school. It also means for working parents that it is time to find child care!
The options include:
- Daycare/school care
- Attempt to work at home
Unfortunately some of these are not exactly cheap, but might be your only option. For example I don't have the ability to have the grandparents around - too far away! So instead I use a combo of the rest. Over the years I have found ways to keep the costs down - especially when using camps.
I really like these as not only is child care take care of, but the kids get introduced to new ideas and skills.
Here are some tips to help you save on summer camp.
Recently Upromise by Sallie Mae released their latest findings in their yearly report on How America Saves for College. While some of the findings were predictable, such as people are not saving because there is no extra money. There was one findings that I found fascinating.
It was that those that were not saving for college had children that were less likely to have their own savings account. In fact of the non-savers 81% of those kids did not have a savings account, while 66% of the kids of savers did not have an account.
While the reasons for this and the points for debate and discussion could be numerous, the thing that really jumps out at me is that having a savings account is one of the best ways to increase financial literacy, and yet an overwhelming majority of kids don't have a savings account.
So I challenge you, start your kids financial education and start them saving for their own college by opening them a bank account today! (According to the same study only 18% of kids are saving for their own college).
How Early Should I Start Teaching My Kids About Money?
I get this question a lot! My standard answer is as early as possible. The sooner they start learning the better off they will be. And if you have not started and they are nearing high school or college - start today. It is better to get them going than to teach nothing at all!
I started with my own son around the age of 3 1/2, by teaching him how to count coins. As he has grown the lessons have evolved and covered more topics. I can say for sure that his ability to grasp concepts about money is improved because we have always talked to him about it and not made it a taboo topic.
So if you are going to start as soon as possible, your next question is probably - what should I start teaching?
The easy one is if they are little and you still need to teach them to count money - start there! Outside of that it really depends on how old your child is and how emotionally ready they are to learn the concepts. Here are some articles that can help you get some ideas on where to start:
Recently T. Rowe Price came out with their annual kids and money survey. Once a year they poll parents and kids about the topic of money. The kids are ages 8 - 14 and from the same households that the parents are - so you would think the views would be similar.
Unfortunately a few very different college statistics stuck out:
- 38% of the kids were not sure if their parents are saving for college.
- 32% of the kids are saving for their own college.
- 29% of parents say that they will save for most or all of the kids college expenses.
- 53% of kids expect parents to pay for most or all of their college.
What do these statistics tell me? More kids think mom and dad will take care of than mom and dad actually plan on taking care of!
So what do we think will cover the gap?
60% of the parents think the difference in savings will be covered by scholarships.
While the chance of getting a scholarship are less than 5% for those kids with GPA's over 3.5.
We have a bit of a disconnect here on how college costs are going to be paid for - on both sides of the fence.
How can you fix this to make sure that you and your kids have the funds for college- or at least have the right expectations for college?
Talk about it!
Not sure where to start? Here is an article about how to set expectations for who is paying for college.
Have the chat before it is too late and student loans are the only option!
April is National Financial Literacy month. While I would love it if you were teaching yourself and your kids about money year round, there is nothing better than a celebration month to get you started and focused for at least a little while on a topic of importance.
Why is financial literacy important? Because without it you cannot be an educated consumer and you cannot create a financially sound life.
So I challenge you to start this month to teach yourself and your kids about money. Pick one topic and start learning about it. Pick up a personal finance book and start reading it as a family. Just pick one thing to educate yourself about and get going!
Here are some Articles to get you started: