Year: 2022

FamZoo Review: Allowance and Kid Money Made Easy

FamZoo

FamZoo is a company/app that makes managing money for kids easy. I’ve heard about them for years at various financial conferences. I didn’t have kids, so I didn’t pay attention. I only thought that it had a funny name. FamZoo got a lot more interesting once my kids were old enough to learn how to manage their money.

When I started Kid Wealth earlier this year, I had planned to write about specific companies and apps. FamZoo was high on my list. I went to a personal finance conference, and the CEO of FamZoo, Bill Dwight, was at a booth promoting FamZoo. He gave me the complete backstory of the company. Here’s the short version. Dwight was a very successful Silicon Valley engineer who decided to start something new and different. He combined his passion for software engineering and children’s personal finance. The result was FamZoo.

What is FamZoo?

FamZoo is a completely family money management system. You can think of FamZoo as a combination of a bank and a prepaid debit card. It consists of a parent account and one or more child accounts. Each child account can be further subdivided into spending, saving, and charity. It makes giving allowances easy. I can also give kids money for doing odd jobs or extra chores.

Children can spend money using their FamZoo card. It’s better than a traditional bank because they don’t feel the money is locked up and inaccessible. It’s an excellent way to let kids make money mistakes.

There is no credit feature or way for kids to rack up overdraft fees. The accounts are FDIC-insured.

Why FamZoo?

The Power of Compound Interest

I’m a big believer in teaching kids about compound interest. Unfortunately, banks aren’t paying interest rates that kids will notice. That’s why we should steal an idea from Bank of Dad.

The Bank of Dad idea is that parents can pay better interest than banks. FamZoo is perfect for parent-paid interest. Parents can set up accounts that earn significant interest (paid by the parent, of course). I could give my child 2% interest a week if I wanted to. It may not sound like much, but it is 280% a year. I recommend that you read my Bank of Dad article for an idea of what may be appropriate.

My kids only earn interest in their savings accounts. They have a strong incentive to put money there instead of spending. However, when they want to make a purchase, the money has to be in their spending account. Parents need to approve transfers, but I don’t see myself rejecting too many of them.

We’ve only been using FamZoo a short time, but I think I’ll set it up so that the charity account will earn double interest.

Automating Your Child’s Allowance

I tried managing my kids’ allowance with cash. It was a miserable failure. I never had the exact number of one-dollar bills on hand. Many times, I simply forgot. My kids reminded me sometimes, but they often forgot as well.

Now, I set up a rule in the application, and the kids get money pushed from my parent account to their accounts.

There are good arguments to be made that kids should start with cash. However, the world has moved to digital payments and apps. They’ll eventually have to be comfortable with managing their money this way. It doesn’t hurt to start early.

Using the FamZoo Prepaid Card

When the kids want to purchase something, they simply bring their FamZoo debit card to the store. Most likely, they’ve watched adults swipe a credit card. They probably already know how it works. Kids can check their balances by using the FamZoo mobile app. It’s available for iOS on the Apple App Store and Android on Google Play.

Since my kids are only 8 and 10, they don’t have a mobile plan, but they have tablets and wifi-only phones. As they become teens, they’ll be able to manage their FamZoo accounts at a store.

One nice touch is that the FamZoo has the kids’ own name on them. Kids under thirteen also have the parent name on them.

Getting Started with FamZoo

It takes some time to get started with FamZoo. For me, it took three weeks. It can take two weeks to get the debit cards. After that, it took another few days to set up the external transfer from my bank (USAA). The banks must do their transfer stuff, which takes a few days.

While it’s a bit inconvenient, there are very good reasons why it takes so long. FamZoo purposely doesn’t allow itself to pull money from your bank accounts. Instead, you push money from your bank account to FamZoo. This is great for peace of mind. No one wants to worry that a company is going to drain their bank account by pulling too much money out.

How much does FamZoo cost?

I’ve always been against paying bank fees. I’ve always felt that if I’m giving the bank money to lend out at high rates, the bank shouldn’t charge me money too. However, FamZoo is an exception. It makes my life so much easier that I don’t mind paying a subscription fee.

If you pay month-to-month FamZoo costs $5.99. It may not seem like a lot, but it can be a large percentage of a child’s allowance. I opted for the two-year pay-in-advance plan, which is $59.99. That comes out to $2.50 a month. It also covers our whole family.

One competitor, Greenlight, has a Greenlight Core plan similar to the FamZoo program. That plan has a $4.99 monthly fee, but it doesn’t seem to have a bulk purchase plan to lower costs. Over the two-year plan, I’ll save 50% with FamZoo.

FamZoo Competitors

FamZoo isn’t alone in the kid debit card space. I mentioned Greenlight above. There are also a couple more: GoHenry and BusyKid. I’m looking into exploring these options more. Stay tuned for reviews on them.

FamZoo Negatives

I found two things with FamZoo that were below my expectations. One was the time to get started. There’s an option to put more money in to start, but I didn’t take it. If I did, I think I would have been able to get started faster.

The second negative is that the company was founded in 2006, and it seems like much of the design is still from around that time. I’m more interested in functionality than design, but others may feel differently.

FamZoo Final Thoughts

We’ve been thrilled with FamZoo. It’s made handling allowances and compound interest so much easier for me. The kids love that it’s made their money more accessible than a stodgy bank account.

If you want a free bonus month, sign up with this special link.

Just Saving My Money (Book Review)

Just Saving My Money

Mercer Mayer’s Little Critter books have been famous for nearly fifty years. When I was a kid, I had the PC Game Just Grandma and Me, an adaption of the popular book. Much like Berenstain Bears’ Dollars and Sense, the series has added a personal finance book for beginning readers.

Just Saving My Money is an I Can Read book. It’s at the “My First” level, which is best for “Shared Reading.” In short, it’s good to read with your kids. The sentences are short. Most of the words are short too. It’s 30 pages, but there are only a couple of those short sentences on each page. The illustrations help bring additional context to the story. I’d recommend it for a bedtime story.

Just Saving My Money Summary

Little Critter’s skateboard is old and broken. He wants a new one, but he hasn’t saved enough money for one. Little Critter does chores with varying levels of success. He earns a little money and some more from a lemonade stand.

When Little Critter thinks he has enough money saved, his dad brings him to the bank. They set up an account, and the bank steals all his money. Little Critter doesn’t like this at all. His dad tells him not to worry, and Little Critter trusts him. Little Critter has a book from the bank to keep track of his money. However, he doesn’t have enough for the skateboard. He does more chores to finally be able to buy the skateboard…

… but he doesn’t want the skateboard. He wants a robot dinosaur now. He has the money for the robot dinosaur and thanks his dad for teaching him how to save his money.

Just Saving My Money Lessons

Much like the Berenstain Bears book, there is only one main money lesson in this book. That’s enough for a four or five-year-old, especially one focusing on reading. The money lesson is very obvious. It’s mostly in the title: Save money for large purchases.

You could take a step further and point out that thinking about a purchase for an extra long time can help you evaluate if you really want it. In this case, Little Critter changed his mind about how he wanted to spend his money. The only thing that’s a little odd is that he went from wanting a replacement skateboard, which he could use for many years of fun, to a robot dinosaur. I love robots more than anyone I know, but I bet it gets boring once you finish with the 7-10 things it does. I feel like the skateboard was a more practical decision.

Just Saving My Money Read Aloud

Final Thoughts on Just Saving My Money

I like this book because it’s very age appropriate. If you are getting a beginning reading book, a money lesson is a good bonus. Unlike the Berenstain Bears book, the lesson seems relevant today. It’s priced at a dollar less ($4 vs. $5), so I consider that a great value.

Rating: ⭐⭐⭐⭐⭐

Berenstain Bears: Dollars and Sense (Book Review)

Berenstain Bears Dollars and Sense

I grew up in the late 1980s with the Berenstain Bears stories. I forgot a lot about the specifics of their books. I certainly don’t remember Berenstain Bears books about money. Fortunately, this isn’t a case of my mind forgetting things. Stan and Jan Berenstain didn’t write Dollars and Sense until 2001. It was one of the last books that the creative team wrote about the famous bear family in bear country.

Before we start on Dollars and Sense, I uncovered an interesting detail in my research about Jan and Stan Berenstain. One of their first published books in 1952 was about how to fill out your tax form. It’s called Tax-Wise: A Pictorial Romp Through the Tax Form.

Is that as interesting as their 1960 book “And Beat Him When he Sneezes” ? I don’t know. Nonetheless, the Berenstain Bears is a best-selling children’s book series.

Let’s get to reviewing the book:

Berenstain Bears’ Dollars and Sense Summary

Books aimed at four and five-year-olds need to be focused on the basics. That means starting with physical coins and dollars. Dollars and Sense doesn’t disappoint. It draws in kids with the physical fun of coins (flippable, stackable, etc.) and transitions into more valuable dollars. Unlike many other early reader books, Dollars and Sense doesn’t explain why dollars are much more valuable than cents.

Instead, we have dad going on a rampage that he can’t give Brother Bear and Sister $5 and $10 for baseball cards and doll wedding dresses. Mama Bear comes to the rescue and suggests they give the cubs an allowance. I strongly suggest giving kids an allowance. Brother and Sister Bear proceed to make money mistakes. They spend all their allowance on the first day of the week and never save any.

One day, they notice that Papa Bear is balancing the checkbook for the family. Mama Bear explains that balancing the checkbook allows them to review how they spent their money and how much they have left. Mama Bear teaches the kids how to write checks, and the cubs suddenly decide to make a better spending decision. The book ends very abruptly after that.

My version of the book includes a series of tear-out checks and bonus stickers.

Money Lessons from Berenstain Bears’ Dollars and Sense

The big money lesson is to create some barrier to make kids pause and think about spending money. The book uses writing checks to accomplish this. I’m not a fan. I’m 46 years old, and I’ve never balanced a checkbook. I rarely write a check nowadays. I could write two or three a year. This feels antiquated. Not only that, but it’s spending a lot of time learning a system they may never use in real life.

Give Berenstain Bears’ Dollars and Sense a Try

The good news is that you don’t have to buy the book or go to the library to see if the book is right for you. I found a video on YouTube of a person reading the book out loud. I’m not a lawyer, so I can’t comment on the legality of essentially “giving away” the book’s contents, but YouTube hasn’t taken it down. There are several others, but I liked this one.



Additionally, I found that it may be free to borrow digitally on Archive.org. If you have an account (it’s free), give it a try.

Final Thoughts on Berenstain Bears’ Dollars and Sense

I really wanted to like this book, but I just can’t. There’s one important money lesson, think before you spend, but kids will probably learn that best by making money mistakes themselves. Getting kids to write checks for their allowance will likely make them equate managing money with chores/work.

There are better children’s finance literacy books to teach kids the value of a dollar.

Rating: ⭐⭐

I know this glowing review is going to make you want to spend your money right away. That’s sarcasm, but I always have to include the obligatory link to the book Amazon. If you do make a purchase I may make a few pennies to pay for hosting.

Halloween Money Lessons – Cash or Candy

Halloween Cash or Candy

Halloween is just a few days away. This is the time of year for witches, ghosts, candy, and kid money lessons. Wait, kid money lessons?

Yep.

We all know how Halloween night is supposed to go. Kids get dressed up in costumes, and they go door-to-door ringing bells, saying “Trick or Treat,” and get some free, delicious Halloween candy.

What if, instead of just giving candy, the response was “cash or candy?”

That’s what Chuck Jaffe has done since 2016. It’s worth reading the article. I’ll wait.

If you cheated and didn’t go read the article, then:

  1. Shame on you
  2. I’ll give you a little summary

Jaffe has played games with kids where they either forgo candy or trade candy they already have. In return, they can have a guaranteed cash prize and/or a chance at a bigger cash prize.

The idea is simple… get kids thinking about value.

Almost all the kids took the money when the offer was simply cash. That makes sense; they can get candy from every other house. Over the years, the kids visiting Jaffe’s home seem to know that he’s “the money house.” The kids almost always take that option, even when it’s just a gamble. And why wouldn’t they? It’s fun.

What if kids were given big candy bars? Everyone knows that the houses that give out the big bars are rare. They’re more valuable.

Experiment: Would Kids Choose Cash or Big Candy

I found this YouTube video about how one house offered kids a $2.50 giant bar or a dollar bill. Clearly, the giant bar of candy has more value. However, kids can still get candy from everyone else, and cash is rare. It turns out that about 25% took the dollar bill. There are a few other interesting things that the person learned. I don’t want to give it all away, so watch it below:

Final Thoughts

I’d love to try out some of this stuff at Halloween myself. However, we only get two or three groups of trick-or-treaters every year. I’m not sure I’d learn too much or increase the financial literacy of too many kids.

One of the more interesting side effects of Cash or Candy is that kids walk away with less candy. That’s less sugar, cavities, and obesity.

Finally, if Cash or Candy isn’t your thing and you find yourself with too much candy, you can always try “Cash FOR Candy.” This program run by HeathyWage will give you cash for sending your candy to overseas troops. They have limited cash to give, so you need to act fast.

Investing for Kids (Book Review)

Investing for Kids

This article is about the book “Investing for Kids: How to Save, Invest and Grow Money” by Dylin Redling. If you are interested in the topic, in general, visit teaching kids how to invest

I had been meaning to pick up a copy of Investing for Kids for some time. It first caught my attention due to the incredible number of Amazon reviews. Check it out: over 2100 reviews as of mid-October 2022. More importantly, the reviews are excellent.

I finally took the plunge when I saw the author, Dylin Redling, at a financial conference selling the book. My kids now have an autographed copy, much like The Golden Quest and M is for Money. I hope that will make them want to read it more. I don’t want to give them too many money books. The next one that I want them to read is Grandpa’s Fortune Fables. The good news is that while this book says it’s for ages 8-12, I think it’s a better fit for 10-14.

Let’s get started!

First Impressions of Investing for Kids

Investing for Kids is 120 pages long, which may seem slightly intimidating for an eight-year-old. However, there are a lot of illustrations which helps make it a quick read. The illustrations aren’t fluff; there are graphs, work pages, and infographics. With seven chapters, a kid could reasonably do one chapter each night. More advanced readers could do a couple of chapters daily and finish it in a few days.

The chapters are:

  1. Money 101
  2. Save Your Money
  3. Introduction to Investing
  4. Low Risk/Low Reward
  5. High Risk/High Reward
  6. Diversify Your Investments
  7. Grow Your Money

A section at the end includes a brief glossary, a resource list, and an index.

Here’s a little bit about each chapter and what your child will learn:

Chapter Guide

1. Money 101

Money 101 starts with a history of money and its physical appearance. I always find this boring, so I was happy to see that this was short. The book explains how to earn money, how interest works, and was debt is within the first ten pages. Before the first fifteen pages are over, there’s a concise description of the Federal Deposit Insurance Corporation (FDIC), certificate of deposits (CDs), internet banks, credit unions, and brokerages. It ends with a great story about entrepreneur Debbie Fields and her famous cookies.

My favorite part of this chapter is the section on earning money, which asks two specific questions: “What do you like to do?” and “What are you good at?”

2. Save Your Money

This chapter stresses the importance of budgeting and savings accounts so that they can earn interest. It explains what principal is along with simple and compound interest. I’ve seen compound interest taught a lot, but never simple interest.

The part of budgeting dedicates significant space to charity. There’s a brief introduction to passive income, the Federal Reserve Bank, Warren Buffett, and the Rule of 72. I love a page that will inspire you to go on a field trip to different banks to ask them about the interest rates they have on their products.

Unfortunately, this book makes the classic mistake of crediting Albert Einstein as saying that compound interest is the eighth wonder of the world. He most likely DID NOT say any such thing. That doesn’t make it any less great.

3. Introduction to Investing

This introduction to investing section was interesting because it didn’t go into various types of investing. Instead, it mentioned the value of investing early. It covers risk and reward and Return on Investment (ROI). It teaches kids to think about whether they should be risky or safe investors in a way that makes it about their own risk tolerance.

This chapter also covers liquidity, which is something that I often overlook myself. In Bank of Dad, we learned that kids might understand a lot about liquidity because their parents whisk their birthday money away to a savings bank where they can’t easily access it.

My favorite part of the chapter is the short section on evaluating a company’s main attributes: earnings, growth, competition, consistency, and management. This is a terrific way to evaluate individual stocks.

Another notable part of the chapter got a book the top negative review on Amazon. Three pages are devoted to investing in companies that “Make the World a Better Place.” It’s mostly about investing in a company that does good. As part of this, there’s a concise section, about a page, on ESG investing. The vast majority of this section is about the environmental aspect of companies. The review (unfairly, in my opinion) described this section as “woke ‘virtuals’ and ‘morals.'” Many kids are very concerned about the environment, and they should be. They are looking at eighty years of climate disasters, and reversing the damage that has been done can’t come soon enough for them.

This chapter included a page about the Great Recession of 2008. That’s a complicated historical note. It’s one example of why I think this book is better suited for older kids.

Low Risk/Low Reward

This chapter is where the reader learns about specific types of investments. The lower-risk investments covered in this chapter include treasury bills, certificates of deposits (CDs), highly-rated corporate bonds, and high-yield bonds.

This chapter covers corporate credit ratings, bond yield, and expense ratios. I would typically associate an expense ratio with a mutual fund or exchange-traded funds (ETFs), but it does have a place when investing in bond funds.

High Risk/High Reward

The high risk/high reward chapter starts with investing in the stock market. It includes information about individual stocks, mutual funds, and ETFs. It has concepts of avoiding gambling and lotteries as well as understanding bears, bulls, and black swans.

This chapter also includes information on how to open an investment account with online brokerages such as Vanguard, Fidelity, Charles Schwab, or Robinhood. It walks you through buying your first stock, including placing a market or limit order. There’s a section on dividends. Finally, the ultimate mantra is covered, “Buy low, sell high.”

This chapter includes three other types of high risk/high reward investments: private equity, venture capital, and angel investing. I don’t know many kids who can use these investment options. Not many adults have these in their investment portfolios. There are some fun mentions, such as Pets.com’s failure.

There’s one page that mentions investments in “real estate, art, and collectibles.” I think giving real estate investing only part of one page is a big disservice. It’s worse that it is grouped with art and collectible investing. Imagine grouping owning an apartment building in Manhattan with having a few Beanie Babies.

Diversify Your Investments

Diversifying all the investments mentioned in the previous two chapters is essential. This chapter goes into asset allocation in detail. There’s more about exchange-traded funds, investing in funds with low fees, and dollar cost averaging.

This short chapter (10 pages) also includes a short mention of Financial Independence, Retire Early (FIRE), and the rule of 25. The section is about two-thirds of a page. I would have liked to see this be at least a few pages.

Grow Your Money

This final chapter brings it all together by starting with entrepreneurism. There are a few more pages on FIRE. I’m not sure why there was the short section in the previous chapter when it’s covered more here.

Finally, there’s some coverage on adult topics like having a retirement account. There’s more coverage of 401ks than kid Roth IRAs. There’s a brief mention of taxes, which is fine. Kids probably don’t need to get into long-term capital gain taxes.

Final Thoughts on Investing for Kids

The lack of real estate investing information is disappointing. I think it deserves its own chapter in any general investing book. One way to supplement this omission is by watching Teen Titans Go!’s episode of Finally a Lesson

Despite that minor nit-pick, Investing for Kids is a great book for a tween or teen learning how to invest. I’ve read quite a few books for children, and this is the best one on the singular topic of investing.

For topics other than investing please these kid books about money.

It’s Only Teenage Moneyland

The other day my 10-year-old said to me, “I can’t wait to work at Mcdonald’s in four years.” You don’t usually hear people excited to work in fast food, but he was generally excited. He had seen a sign that Mcdonald’s is hiring 14-year-olds at $16/hour.

I had to double-check it, and he’s right. Of course, I thought back to my first non-paper route job. I had just turned 16 and I was making $4.65 at a local pizza place. After six months, I got a raise to $4.75. After a year, I got $4.85. My next job, as a pharmacy technician paid a whopping $6.41. That was a great job for a kid in the early 90s.

A kid can make nearly $100 after school and still get homework done. That’s amazing to me. In my area of Rhode Island, I bet a kid could make $20/hr with a little looking. There’s such a shortage of workers. At a minimum, there’s never been a better time to find a job.

What’s even better is that the stock market is now more than 25% off its highs. A kid investing now will likely see his/her money jump by 30% in a few years.

There are only a couple of downsides in these awesome economic times for teenagers. First, inflation is high. That means that they’ll have to pay more at the mall. Well, that is if kids still went to the mall. Second, college seems more competitive than ever. I don’t know how great fast food chef looks on the college application, but it’s probably not as good as the chess club president.

I’m curious if my son will still be excited to work in fast food in four years. Maybe he won’t be interested in working at all. I’m not in any rush to find out though. I’m going to enjoy this time as much as I can.

P.S.

I hope some of you caught the song reference in the title. I know I’m old, but I figured that it’s popular enough to work.

How to Teach Kids about Credit

teach kids credit

Teaching kids about credit is crucial to their financial education. An excellent credit score can save you hundreds of thousands of dollars. Good credit will help keep lower interest rates with mortgages, student loans, and car loans.

Typically credit is a lesson best learned when they are teenagers. That’s when they may start to apply for credit cards for themselves. However, before we get to the teens, let’s cover a few credit thoughts for younger kids.

Credit for Tweens

My kids are now eight and ten years old. They’ve had a credit card to build a credit history for several years. They don’t know about it, but each is an authorized user on my Amazon Prime credit card. Sometimes credit card companies need kids to be a minimum age, but I didn’t run into this problem with the Amazon Prime card. I keep the physical cards in a desk drawer. Perhaps I should use them to make sure they are building credit. Maybe I should even look at my kids’ credit reports. There are some horror stories about identity theft of kids’ information. At this point, I’m just trying to get them a headstart. I’m probably the weird parent who is nutty enough to think of this stuff when they are so young.

Secondly, I have recently gotten them FamZoo debit cards. These will get them used to using a card instead of cash. I’ll post a FamZoo review soon, but I want to learn more about how it works. I explained the difference between debit vs. credit cards. The FamZoo debit card seems like a credit card if you are a kid, though. It’s physically the same thing. Perhaps more importantly, I like the FamZoo solution because it automates giving an allowance and kids can start making money mistakes. Too often, kids think that money is “locked” in a bank.

Credit for Teens

Young adults in high school should start using their first credit card. Don’t let their first credit card experience be in college. Teaching kids good money habits are impossible when they are on their own. They’ll be swamped in college, and it will be tough to avoid late payments. You’ll want a couple of years to review credit card bills together and ensure they are paid in full each month to avoid fees.

One way to get kids to move from a debit card to a credit card is by introducing them to rewards cards. When I was a teen, I got interested in credit cards because I could earn points on Sony stuff. If credit cards didn’t offer me generous reward perks, I’d probably just use a debit card.

Credit card companies probably won’t give your kids a very high credit limit – lenders don’t want to take a big risk. That’s what you want – teens shouldn’t be making many purchases. Building credit can be done slowly.

Parents should explain the risks of credit. It’s not just about the late fees but how compound interest works against you. Before you teach kids about credit, they should be taught compound interest. When teaching them the risks, give them examples of how 15% interest grows over time. You might want first to show off how great earning 15% interest would be. We’ve all seen charts showing how 7-8% interest grows over many years. Chances are that seeing 15% grow will get them excited. Then you can pull the rug out from under them and say that they’ll be PAYING all that money for nothing if they don’t pay off their card every month. Maybe they’ll want to become a loan shark.

Final Thoughts

When parents think about financial literacy, they rarely think about teaching kids credit. Instead, they focus on saving money. Saving money is very important, but there’s a lot more for kids to learn to round out their financial education. Take some time to give your kids an understanding of how credit works.

Kids’ Money Books

Last April, I put together a quick list of money books for kids to read for financial literacy month. Today, I’ve published a new version with a quick synopsis, money, lessons, appropriate ages, and a rating system.

I recommend kids read at least one money book every couple of months. Warren Buffett once said:

“Sometimes parents wait until their kids are in their teens before they start talking about managing money — when they could be starting when their kids are in preschool.”

As you’ll see, this list is far from complete. I still need to review a lot more of these books. I recommend starting with an age-appropriate book, then reading the quick synopsis to see if it sounds interesting. From there click the book title to read my review or the Amazon link to check out the reviews there. For the books that I haven’t read, the title takes you directly to Amazon.

Title/ReviewAgesStarsMoney SkillsSynopsisAmazonWords
M is for Money3-6⭐⭐⭐⭐⭐Money WordsThis alphabet book introduces kids to money words. There are multiple money scenarios. Kids featured are from many nationalities.See at AmazonGeneral
If You Made a Million5-8⭐⭐⭐⭐⭐Coins, Banking, Interest, Financial IndependenceThis books takes readers on a trip from the basics of coins, through how banks make money, to financial independence of living off of interestSee at AmazonGeneral
Grandpa's Fortune Fables7-13⭐⭐⭐⭐⭐Comprehensive Variety of Money SkillsFourteen chapters cover a variety of financial topics such as saving, investing, taxes, debt, charity, and home ownership. The book has a code at the end of each chapter that can be used on the author’s website.See at AmazonGeneral
The Golden Quest8-12⭐⭐⭐⭐⭐Smart Spending, Savings, Compount Interest, Philanthropy, Financial IndependenceThe Golden Quest is unique because it is a graphic novel. Kids will generally want to read it if you leave it lying around. Most kids can finish it in a couple of hours.See at AmazonGeneral
American Girl’s Guide to Money12-16⭐⭐⭐⭐⭐EntrepreneurismAmerican Girl’s Guide to Money is perfect for a teen girls who are interested in starting their own companies.See at AmazonGeneral
Rich Kids12-Adult⭐⭐⭐⭐Few Money Skills, Life SkillsRich Kids is not the typical book to teach kids about money. Instead it teaches other traits for success. It’s a great supplement book for when your kid has read too many money books. The target audience, whether it is for kids or adults is unclear.See at AmazonGeneral
Investing for Kids10-14⭐⭐⭐⭐⭐InvestingInvesting for Kids is a great book for tweens and teens looking to learning one thing: investing. It covers bank, stock, bond, and start-up investing well, but barely touches real estate investing.See at AmazonGeneral
A Boy, a Budget, and a DreamKidsSee at AmazonGeneral
A Chair for My MotherKidsSee at AmazonGeneral
Alexander, Who Used to Be Rich Last SundayKidsSee at AmazonGeneral
Curious George Saves His PenniesKidsSee at AmazonGeneral
Give It! (A Moneybunny Book)KidsSee at AmazonGeneral
Growing Money: A Complete Investing Guide for KidsKidsSee at AmazonGeneral
Harmoney & the Empty Piggy Bank: A Book about Money, Budgeting, Entrepreneurship, and PersistenceKidsSee at AmazonGeneral
If Money Doesn't Grow on Trees, Where Does it Grow?KidsSee at AmazonGeneral
Make Your Own Money: How Kids Can Earn It, Save It, Spend It, and Dream Big, with Danny Dollar, the King of Cha-ChingKidsSee at AmazonGeneral
Malik's First Job: Financial Tips for Teens and Young Adults KidsSee at AmazonGeneral
Milton the Money Savvy Pup: Brings Home the BaconKidsSee at AmazonGeneral
Molly Earns Her PieKidsSee at AmazonGeneral
Money PlanKidsSee at AmazonGeneral
Moneytopia: Earning: Financial Literacy for ChildrenKidsSee at AmazonGeneral
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(Originally Published: Apr 4, 2022)

Ten Ways to Make Your Kid a Millionaire!

Make Your Kid A Millionaire

Most of the articles at Kid Wealth are designed to make your kid a millionaire. However, here are ten specific ideas. One of the significant advantages of writing for kids is that they’ve got time and moldability. It’s harder for adults who have responsibilities, less time, and are more set in their ways.

1. Learn and Use Compound Interest

Regular readers know that teaching compound interest was going to come first. In particular, a kid Roth IRA can compound for five or six decades and be withdrawn tax-free.

If you don’t want to wait several decades, there are some ways to speed up the process.

2. Choose a High Paying Career

I love teachers. Unfortunately, their pay very much compared to architects and engineers. Some studies show that engineers have lifetime earnings of $4 million, while teachers are half that.

When you make more, you can save more and invest more.

3. Avoid Debt

Debt is compound interest working against you. You can’t save and invest while paying off a mountain of debt.

Not all debt is bad. Some debt, such as starter homes or state school college, can pay off down the line. Be very cautious about six-figure student loan debt – make sure it’s a top-earning career like a doctor or lawyer.

Avoid McMansions.

4. Limit Your Biggest Expenses

Why avoid McMansions?

Housing and transportation typically combine for half of people’s expenses. Big houses lead to more furniture, have higher property taxes, and require more energy to heat and cool. There are more maintenance costs.

McMansions also typically cost more money. That means taking out a bigger mortgage and more debt. A smarter money move would be to buy a tiny house and invest the savings. That may be a little extreme, but there are many types of house hacking, from getting roommates to live-in house flipping.

Buying an older used car without all the bells and whistles is also intelligent.

Most kids don’t need to worry about big expenses until they are legally adults, but it’s wise to build this foundation at a young age. I know many young adults who get their first job and spend too much on a first house. Similarly, many kids spend too much on a car when they get that first paycheck.

5. Maximize Assets and Limit Liabilities

Kids should learn the difference between assets and liabilities. For me, this was like flipping a switch in my brain. I stopped buying a lot of “stuff” unless it was shares of stock.

If you had $400 when Apple released the first iPod, you could have bought an iPod that would most likely be in a landfill – or you could have bought Apple stock that would be worth nearly $180,000 today.

Of course, no one knew that Apple would be the fantastic success story it is today, but it’s a strong example. Kids may not know what an iPod is, but this is an excellent chance to give them a quick history lesson.

6. Start a Business

Get kids motivated to start a business. Once they start thinking about how businesses work, they’re more likely to explore side hustles.

7. Increase Social Capital

I have helped a few friends find jobs, and I’ve had a few friends help me find employment. Some jobs are paid well, and we’ve all been happy with the arrangement. In fact, I’ve almost always been hired through word of mouth.

So teaching kids how to network can certainly pay off.

8. Learn More by Getting a Book

Here’s a list of kids money books. I’ve written several reviews to help you decide which book is best for you.

Of course, you could also get the book, Make Your Kid a Millionaire. I haven’t read it, so I can’t recommend it.

9. Learn More by Watching a Video

Looking for more ideas on how to make your kid a millionaire? Check out this video:

10. Be Lucky

Let’s end on a fun one. There will always be stories about someone who made it big through some quirk. Maybe they won a lottery. Perhaps they created a YouTube that went viral. Okay, that takes much more than luck, but luck is involved.

There’s a famous quote: “Luck is the residue of design.” All the above items are part of a design. When you have a good plan, good luck is likely to follow you.

The most likely way to make your kid a millionaire is a combination of the above. Maybe your kid isn’t getting a full scholarship to Harvard Medical School. Perhaps your kid is better suited for live-in house flipping. Since you are reading this site, I know you can set your kid up with investing and compound interest at an early age.

The Golden Quest (Book Review)

The Golden Quest
The Golden Quest by David Delisle

I recently went to a financial literacy conference and met many fantastic creators. One of them is author David Delisle who was selling his book, The Golden Quest.

It caught my eye more than any other book at the conference for one reason. It’s a graphic novel. My kids, ages 8 and 9, love graphic novels – especially Captain Underpants and Dog Man by author Dav Pilkey. They prefer graphic novels so much that getting them to read standard books can be challenging. I don’t mind, because any reading is good reading.

David Delisle has a great trick… taking personal finance to a format that kids are happy to read. As much as I like all the money lessons in Grandpa’s Fortune Fables, it’s hard to get them to read “Dad’s money books” (Ugh!) A graphic novel eliminates that pain point.

Not only will the kids want to read it, but they’ll also probably do it in one sitting.

The Golden Quest Good

Getting the kids to read a personal finance book is 80% of the battle in my experience. What kind of book review doesn’t cover the remaining 20% – the concepts that the kids learn. Fortunately, The Golden Quest excels in this area covering the following:

  • Spending on the important stuff

    This is a lesson that even adults could use. By adults, I’m talking about the man in the mirror, at least. I have bought way too much less-than-awesome-stuff.

  • Pay yourself first

    I’ve always been good at saving. I’m not sure if my kids are more savers or spenders at this point. We’ll have to experiment more. I’ve got some ideas, and they’ll be part of an article in the future. In the short term, we’ll continue with giving an allowance and letting them make money mistakes

  • The power of compound interest

    The day after reading the book, my 9-year-old said he could be a millionaire by age 77. The book explained that savings could double in 7 years through investing. I wish I could say that he did the math to learn that $500 doubling 11 times is a million. The book did the math for a half million in 10 years and then made the leap of the next year.

    It was incredible that he brought this up to me! It started a conversation, and I explained that he could invest another $500 yearly to get there even faster. I also said that while $500 seems like a mountain of money at his age now, he’s already had much more than that saved from his birthdays. He also has a lot more in his kid Roth IRA. He’s already got a couple of decades of $500 doubling done.

  • Giving back

    Many books talk about giving but don’t cover some of the advantages of giving. This book explained that not only do you become emotionally rich when you give, but you also build social capital.

  • Financial Freedom

    What good is only spending money on important stuff and saving and investing if it’s just a number in a bank account? The answer is that you can buy your time and experiences… and, of course, that awesome stuff.

These are some of the most important money lessons.

The Golden Quest Bad

One of my kids said it was about a five on a scale of one to ten. The other kid rated it a four. At first glance, those aren’t good ratings. However, these are kids, and they don’t live in a world where nearly everything from Amazon to Uber to Rover dog sitters gets perfect grades for delivering on basic expectations. They look at it as Dav Pilkey novels earning nines. If you grade on the curve of personal finance books, I’m sure it’s their favorite.

My oldest had a notable nitpick – the hero didn’t have a name. He said, “How can you name the dog and not name the main character?” I didn’t even notice it. I think it was intentional so that the reader can imagine themselves as the main character.

I had a minor nitpick as well. A page showed an Albert Einstein cartoon character with the chapter heading “Compound Interest – The most powerful force in the universe.” This phrase is often attributed to Einstein, which is heavily implied on this page. However, there’s no evidence that he said anything like that in his lifetime according to this extensive Snopes research. This minor criticism probably says more about me and has nothing to do with teaching kids about money.

Final Thoughts on The Golden Quest

When I first read The Golden Quest, I thought, “That’s great, but now there needs to be a sequel to teach everything else that it didn’t cover.” After re-reading it and writing this review, I’ve changed my mind. It covers the most essential points of what kids need to know about money entertainingly. I can’t understand what a huge win it is.

The Golden Quest is the kind of book that should probably be re-read at least once a year for a few years. It has tremendous value with a time commitment of about an hour. I would recommend reading it before Grandpa’s Fortune Fables to pique kids’ interest in money.