Welcome to The Financial Fairy Tales ‘Money Quest’
A week long event to help your child develop essential money skills, ideas and habits.
Please enjoy Day 1 materials below and let me know what you think via our Facebook page or comment below.
Wherever you stand on the too much screen time debate, mobile phones have changed the way we live. The amount of information and computing power available in our hand on demand would have been unimaginable just a few years ago.
This article looks at some of the great money savings apps available all designed to help kids save and manage their money.
Why Talk About Money With Your Children?
April 29th, 2019 Posted in financial literacy for kids, kids and money, Parent Advice, teaching children about money
Why is it important to talk about money with our children? As a society, we’ve come to understand that staying silent on the topics of sex and drugs can often lead to negative or unwanted consequences. The same is true for money.
Starting the money conversation early, and having it often, in an age-appropriate way helps prepare our children for managing their own money wisely.
Stay silent about it and you risk leaving your children open to the pitches of TV adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.
Theresa Harezlak, a financial adviser with Savant Capital Management and a mother of two, says the biggest money mistake that parents make is silence.
“Every time my kids go outside I tell them to be careful crossing the roads and do not talk to strangers, but we never talk about money. In reality”, she says, “the chances of her kids being abducted are very low, but the chances of her children using money are certain”.
Theresa Harezlak
Staying silent about money and you risk leaving your children open to the pitches of TV, adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.
For example think of how many films or TV shows have the arch villain as some kind of reclusive billionaire. In fact how many positive examples of rich people can you call to mind?
In my view, too many parents don’t talk about money with their kids at all. Others skirt topics they don’t know much about, like investing and debt. Parents are the main source of money information for children, but 74% of parents are reluctant to discuss family finances with their kids, according to the 2014 T. Rowe Price Parents, Kids, and Money Survey. That’s a big shame, because ignorance about money can set up your kids to make bad decisions — and eventually pass those bad habits on to your grandchildren.
The solution: Make financial literacy a family value
In her book, Do I Look Like an ATM?: A Parent’s Guide to Raising Financially Responsible African American Children, Sabrina Lamb details “the business of your family household.” Lamb, says all families should work together on five financial topics: learning, earning, saving, investing, and donating time or funds to causes you value. She recommends a daily diet of business news, occasional meetings between the kids, your bank, or other financial advisors, and support of your older kids’ entrepreneurial goals. This might be a bit idealistic for many but using the news or an online article as a stimulus for a conversation about money could be a good start.
Even if money is tight, don’t
stress about it in silence.
When parents are worried about money but are not communicating their financial situation, children pick up on the anxiety and associate it broadly with finances. Rather than learning money lessons from their parent’s mistakes or particular situation, children instead learn that money is ‘stressful’ and ‘bad’.
A 2013 Study by Cambridge University for the Money Advice Service revealed that our money values and habits are formed in childhood often before the age of 7. If a child is growing up with the programming that money is stressful and bad what are the chances that they will ever make any as an adult?
This is why the primary goal behind The Financial Fairy Tales books is to help spread positive, empowering messages about money to children and counteract the negative bias they may be exposed to elsewhere.
Join our growing Facebook community here and share this post with someone you know who would benefit from this conversation about money.
The older we get, the more we realize how crucial financial skills are to surviving and navigating life. Too bad though, schools don’t seem to teach our children enough about money and how to manage it.
As a parent, teaching your kids critical financial lessons is a great way to prepare them for the life that’s ahead of them.
But where to begin, you ask?
These key money management lessons we have compiled should be an excellent place to start.
1. Money Does Not Grow On Trees
Financial literacy starts with the understanding that money is a finite resource. Your kids have to realize early on that money does not grow on trees or simply pop out of the ATM; it is a product of hard work, and banks are just establishments that keep them safe for you.
To get your point across, teach your kids how to earn their own money by paying them for doing extra chores around the house. When they’re older, encourage them to get part-time jobs. Not only will this give them a taste of how the real world operates, but it will also help them develop a better work ethic.
2. Wants vs. Needs
Sound financial decisions begin with distinguishing needs from wants. You don’t have to wait for your kids to get older to teach them what’s necessary and what isn’t.
Make your children understand that some expenses have to come first, while others can wait ‘til later or when you have extra money as they’re not essential to day to day living.
3. Delayed Gratification
They say good things come to those who wait. Delaying gratification, however, is something that even adults have a hard time coming to terms with.
Teach kids at an early age that they can’t have everything they want in an instant. Learning to save and prioritize before buying something can have a significant impact on how they handle their finances when they become adults. As parents, you have to reinforce the idea that waiting pays off especially if the goal is worth the wait.
4. Saving For The Rainy Days
Your kids are never too young to start saving. Encourage them to save not because they want to buy something but because the money might come in handy in the future. Instill in them the importance of pausing and weighing the costs before spending. This may be a difficult concept to grasp at first, but later on, it can develop into a habit that they can very much benefit from.
5. Spending Money Wisely
Train your children how to get the most value out of every dollar. Just because they can afford it does not mean they have to buy it. Teach them how to compare prices; explain to them the concept of holiday sales and discount coupons. Help them understand that, sometimes, it wiser to wait it out, especially when buying items that easily depreciate.
6. Living Within Their Means
Of course, you can’t effectively teach your kids the value of money without letting them manage their expenses. Giving them an allowance and making them budget it on their own will help them see how important it is to control their spending. In fact, blowing their allowance can be a good thing; it will teach them to be more conscious of their expenses, else they have to deal with the consequences.
7. How Credit Works
If you want your children to grow up to be financially responsible adults, you have to give them a better understanding of credit and what it entails. They have to be aware of the dangers of debt and how borrowing money can come at a cost. While credit is not bad, one must be sure of his ability to pay or risk getting into trouble.
8. The Value of Investing
Teaching your children the value of investing will not only introduce to them to the idea of using money to make more money but also trigger them to make smarter financial decisions. More importantly, it will encourage them to take risks for the possibility of gaining much more.
9. Setting Financial Goals
Children are impulsive by nature, so it can be tricky for them to set priorities. However, just like adults, they can be capable of making sacrifices for something that they really want. Train your kids to set financial goals by pushing them to make plans for the money they earn or receive. Help them set realistic targets and encourage them to keep on saving until those targets are met.
10. Sharing and Giving Back
Giving is an essential aspect of financial management. Whether it’s for the church, the community, or family members, children, as young as they are, have to be acquainted with the value of sharing what they have to those who need it.
They say you can’t give what you don’t have. Well, in this particular case, you can’t teach what you don’t know. If you want to raise financially literate children who know how to value money, you have to learn as much as you can about it first and then set a good example. Nowadays, adults can’t just pull the old “do as I say” parenting style. Kids tend to follow what you do, not what you say.
About The Author Bio
Samantha Green is the Content Marketing Strategist for BusyKid, the first and only chore and allowance platform where kids can earn, save, share, spend, and invest their allowance. A mom of two, she enjoys spending time with her kids and reading books to them.
Smart Parents Teach Their Kids These 6 Things About Money
One of our main jobs as a parent is to impart enough knowledge and wisdom to our children so they can not only survive in the world but thrive as well. Of course, in modern society, this means educating them on money and finances as well. A topic you can read more about below.
Spending more than you have is always a bad idea.
While our whole society seems to be built on the idea of borrowing money to pay for things that we could not afford to buy outright, educating your kids that spending more than you have on a consistent basis is a bad idea is crucial. This is because if you don’t, not only does it mean that they will get used to a lifestyle that is way beyond their means, but it also sets them on the slippery slope towards unmanageable debt.
Of course, this makes it an essential lesson that you kids need to learn about money. Luckily, it is possible to instill this wisdom in them from an early age by providing them with an allowance, and then encouraging them to save at least a portion of this each month.
Also, you may wish to encourage children to work and save for items they want, as opposed to buying everything for them. The reason being that this can also help them to get into the habit of raising the money before they spend it.
Installing a good work ethic in your kids early on can be a game changer.
Picture source
The is usually a way out of a financial jam no matter how tight it is.
Another valuable lesson that you need to impart to your kids is that there is nearly always a way out of a financial jam, no matter how serious it is. For example, there are many debt relief agencies out there that can help consolidate debts, something that means it’s much easier to pay them off at a reasonable price each month, which is knowledge that it is essential for your kids to know about, but not plan to rely on.
Alternatively, there are also loans were someone else vouches for you and promises to cover the debt if you default. This can be hugely helpful if someone is in a financial fix, but their credit is poor. Of course, you will also need to remind your kids to shop around for the best apr guarantor loans and other financial products as well, as some will offer a lower interest rate and other benefits. Something that can make all the difference when it comes to being able to pay them back, and so could help your children have a better quality of life as well as get out of financial trouble if the need arises.
Saving is good, but investing is better.
Parents also need to emphasize the importance of not just saving money, but also investing it as well. In fact, it is hugely important to teach your kids about investing because no other action can allow them to increase their net worth in such a drastic way.
Sadly, even now the investment market has become much more accessible to the everyday person because of apps, and low management fees, few people realize the long-term benefits of this activity. Therefore It’s crucial to make your kids not only aware of all the investment options that are available to them including property, cryptocurrency, and futures but also educate them on how these platforms work.
Also don’t forget that as a rule investment is a cumulative process, and that means the sooner your children can begin on this path, the easier their financial future will be. Therefore be sure to explain and emphasizes the value of investing during their mid to late teens so they can get a jump on the competition.
Money doesn’t make you happy, but it can help.
It is also hugely important that as a parent you help your children to understand that money in and of itself isn’t what makes people happy. In fact, it’s the lifestyles, health care, and reduced stress that those with good finances enjoy that is the key.
What this means is that it’s crucial to delineated the quest for becoming rich and yet not spending any of this in ways that enrich life, and doing the opposite. Therefore, be sure to listen to your children’s opinion on what they want to do in their lives, in term of their career, and their goals, as well as who they want to be and adapt your financial education to this.
After all, just recommending that all you kids go into high paying finance positions is a one size fits all solution that is unlikely to work for most people. In fact, at worst it can land your kids in a career that is unfulfiling, even cause them to resent you for pushing them in that direction in the first place.
Monitoring spending is a task that needs to be done regularly.
It’s likely that as a patient you will make an effort to teach your kids that they need to wash up after they have cooked and eaten a meal and that the need to change their socks and underwear each day. However, it can be all too easy to forget to teach them that monitoring what has been spent each day should be a regular task as well.
Picture source
In fact, by establishing this as a part of their daily routine, you give your kids the tools to much better monitor what is happening with their finances. This can help them make improved buying decisions, avoiding impulse buys, and stay out of debt. All things that mean this small daily task can have a considerable effect on their financial well-being through the entirety of their life.
Finances don’t have to be confusing.
Lastly, it’s incredibly important that you teach your kids that correctly managing their money and budgeting doesn’t have to be complicated or confusing. In fact, sometimes the simple systems can work much better not only because they are clearer to follow and stick to, but also because they make dealing with financial matters a lot less intimidating. Thus making this final lesson one that is also crucial to impart to your children.
