April is Financial Literacy Month, but as parents, we know teaching money matters is a year-round affair. Each trip to the store. When a child asks us about how much the house is worth. After handing over the allowance. There are plenty of opportunities to talk about money.
The problem is, money conversations can be uncomfortable and overwhelming. Many parents lack confidence in their own financial capabilities. It’s not unusual for a mom or dad to believe they aren’t “good” with money, and to feel ill-equipped to offer the foundation for good financial practices.
Fortunately, there’s an abundance of tools for teaching kids — and adults — about money. Most banks have lessons on credit cards and other financial products online. Some have created games to play, fully aware that reading page after page about how money works is not most parents’ idea of a good time.
The President’s Advisory Council on Financial Literacy has developed Moneyasyougrow.org, a site with lessons and activities for ages 3 to adult. And some Minnesota high schools have added financial literacy courses and requirements for graduation.
But one of the best ways of learning and teaching about money is through experiences.
I asked financial counselors, advisers, and fellow parents for their thoughts on teaching kids about money, in honor of Financial Literacy Month.
Teach the three jars philosophy. “It’s easy and fairly common to teach kids to save their money and then buy something with it,” said Kevin O’Laughlin, a certified financial planner for Affiance Financial in St. Louis Park.
“Unfortunately that misses the mark by not training children to save money for more than simply the next ‘thing’ they want.” He suggests using the Share, Save, Spend philosophy outlined by Minneapolis father Nathan Dungan.
Get organized. “Remember to teach older teens about how important being organized is when it comes to money management,” said Berni Johnson-Clark, FamilyMeans CCCS Education Manager in Stillwater.
“If the teen is prone to opening mail and tossing it aside, or not opening it at all, then how will that affect their overall bill-paying habits in the future?”
Pay an allowance. “Allowance affords a perfect opportunity to teach kids about saving, charity, and mad money,” said financial consultant Cassaundra Adler.
“Kids view the value of items in Target differently when they have to pay for Pokemon cards themselves. It is amazing how they no longer need an item when they have to pay for it.” She, like many experts, does not advise tying allowance to daily household chores.
Let them mess up. “The best way to learn is to let our kids totally screw up,” said Elizabeth Doherty Thomas, Roseville mom of two. “Better to let it be a wasteful $10 toy than to waste $200 of their first real paycheck.”
Let them wait. “Let them experience the joy of saving and working toward a goal,” said Falcon Heights mom of two Joan Yager.
Her daughter really wanted an American Girl doll. “To earn money she sewed and sold doll skirts and had bake sales with friends to earn money. I also commissioned her to make some Christmas presents. She did not regret that purchase. It meant a lot to her that she worked and saved for it.”
Learn responsibility. Ashley Grant Hamershock, mom of two young boys, said the advice she received during training for a job in college stuck with her.
The trainer emphasized the importance of showing up, “Have a cold? Bring tissues. Car broke down? Call a friend. Call a cab. You get to work.”
Talk about money. A lot. Mary Kate Boylan, St. Paul mother of four, is forthright with her kids about how shopping at secondhand stores stretches their family’s money farther. When at a department store “my oldest once … told me jokingly I had “ruined” it for her — all she could think about was how much more she could get at a secondhand store.”
She also talks a lot about financial trade-offs “in an attempt to get them to understand that no one has it all. They wish we had more electronics, but they understand that we travel more than others.”
Learning by playing. If your kids need a break from learning by doing, add a selection of money games to their screen time (see resources, top right).
Kara McGuire is a personal finance writer and a St. Paul mother of three.
