Money Smart Kids

Let Your Kid Make Money Mistakes

Shark Pen
A money mistake or a good way for a kid to spend $7?

A few weeks ago, I took the kids shopping for Mother’s Day. Since they are 8 and 9 years old, it’s one of the rare times that they brought their spending money and had a chauffeur to take them around town. They did the appropriate shopping for mom, but I encouraged them to spend some of their savings on themselves. My 8-year-old bought this shark pen on the right. It was at a boutique store and it cost $7. When you “chomp” the shark’s mouth the pen tip comes out. My 9-year-old could have bought one, but it would have used all the money he brought. He knew that we are going to Dollar Tree later to buy cards for Mom, so he saved his money.

I was delighted by both of their money decisions. I certainly wouldn’t have bought a $7 pen. I personally think it was a money mistake, but I wasn’t going to talk him out it. I’m not sure what he thinks of the pen now. He brought it to school and I haven’t seen or heard of it since. It could be the “it” toy of the class. I suspect it was cool for about five minutes and then got old. When he comes home from school today, I’ll ask whether he got more enjoyment out of the $7 shark pen or the $6 Sushi Go! game that we played every night for weeks. I think I know the answer.

My 9-year-old bought a couple of items at the Dollar Tree. He got a little toy car. Unfortunately, we’re getting to the age where the dollar store toys aren’t the thrill they once were. Then he did something unexpected that surprised me. He got a box of Jell-o and said, “I want to make this with Mom for Mother’s Day.” He loves to cook and my wife loves to cook with him. It was the perfect experience gift! Plus who doesn’t love Jell-o?

He may regret the little toy car purchase a little, but his downside is minimal. In the worst case scenario he’s lost $1.25. That’s not too bad.

This was also a good time to bring up that Dollar Tree raised all its prices recently. My kids remembered when everything was just a dollar. I was able to explain that it was simply inflation just like the money conversation from a couple of weeks before.

I can read money books and they can read kid money books, but we both need hands-on experience too. We try to never underestimate the power of experience. There’s a show on Netflix called “Old Enough!” It’s been running in Japan for several decades. The show follows really young toddlers as they run errands around town for their parents. Some of these children are 2 and 3 years old. That’s not something we’ll see in the United States any time soon. The reason the kids are able to run these errands is that they’ve done them before with their parents – not just once, but many times.

That’s one of the reasons why I believe you should give your child an allowance. Everyone needs to have money before they can use it. It’s good to learn from losing a few dollars at this age. The lesson is lot more difficult later when more dollars are on the line.

* Mother’s Day cards are usually 50 cents – a much better deal than the $2.99 or $3.99 that you might pay elsewhere.

Keep Those Money Conversations Going

money conversationsOn the way to school last week, my 9-year-old started an interesting conversation.

“Dad, if you had a time machine and bought a house for $1000 in 1860, it would be worth so much money today.”

Usually, it’s the parents who bring up the low cost of things. Especially nowadays with the price of gas and food going up. I responded with:

“That’s called inflation. We bought our house the year before you were born and now it’s worth double what we paid for it.”

That quote isn’t 100% accurate. I went into the real dollars we spent and the real dollars it is worth today. They are big numbers and it may be hard for him to grasp them, but there’s value in using real numbers whenever you can. That’s how kids can start to understand the cost of adult stuff.

We timed our purchase well with housing prices low after the crash in 2009 and mortgage rates to match. It’s the opposite of today’s market with high prices and rising mortgage rates. I saved that story for another day.

When I laid out the real dollars he said:

“Wow, I can’t believe our house cost that much money. It’s not a mansion!”

It’s important to note that several of his friends do live in mansions that are worth $3 million or more. I think it’s a leftover from the gilded age in Newport.

I responded:

“Mansions aren’t always so great. They look good, but they cost a lot of money to maintain. There’s a lot of space to heat, furniture to buy, and often big lawns that need a lot of mowing. If you had a mansion you may find that you spend all your time working for the house.”

Here’s how the rest of the conversation progressed:

Kid: The President must pay a lot of money to maintain the White House then.

Me: Actually, the President doesn’t pay anything to maintain it. Some of the tax money we pay goes to maintain that, along with libraries and roads.

Kid: So it’s like that Teen Titans Go episode when they got rid of the IRS but found out that the roads were terrible and the food was spoiled at restaurants.

Me: Exactly.

He had remembered the Fat Cats episode which I’ve recently added to my article of Teen Titans Go! Money Lessons.

By that time we had arrived at school. I left my 8-year-old out of the story, but he had added some parts to the conversation as well. He played a supporting role, but it didn’t add to the story. The important part is that they both participated and there was a general back and forth.

I highlight a lot of kid money books, television, and courses here, but this is a reminder to follow those up with real conversations. That’s where the magic happens.

Starting Kids on a Financial Independence Path

I know what you are thinking – isn’t starting a kid down a financial independence path a little too early? Perhaps. However, have you ever heard anyone say that they took their finances seriously too early and should have waited? No, we always wish that we started the journey earlier. That’s more time for compound interest to help us get to our financial independence destination.

That doesn’t mean that you have to start teaching your five-year-old about P/E ratios. It simply means that you can guide them down a path of financial literacy early and let nature take its course.

I’ve been interested in personal finance since I was a teenager. I would read my mother’s Kiplinger magazine. I bought my first mutual fund when I was 14. That was almost unheard of in 1990. Investing early has worked well for me.

My other great interest is parenting. It surprised me because I’m not particularly known for my patience. However, I think I got lucky with my two boys – they don’t test my patience too much. That’s how Kid Wealth was born.

Getting them started on a path of financial independence was inevitable. One of the things they started earlier was saving up for a Nintendo Switch. (In hindsight, a video game system may not have been a perfect idea.) We had a great goal sheet on the fridge and they could see the steady progress. I saved a lot of their money when they were little and invested it. They didn’t need it because they had more toys than they could use. The investments have done well though. They’ve more than doubled. If we leave it there until they are 16 it may be a car. Maybe they’ll want it earlier.

Aside from those early financial moves, we’re doing something at home to help them financially:

Teaching Core Life Skills

This is a no-brainer. Some skills never grow old and can help you reach financial independence much earlier. Two skills that came to mind when I was thinking of what I could teach them now.

1. Cooking

Food is often a top-three expense after housing and transportation. Food doesn’t have to be expensive. Eating out at restaurants all the time can destroy a budget. If you know the basics of cooking, going out to eat is less appealing.

My 9-year-old loves to cook and he learned a lot during COVID. He went to a cooking camp last year and for a couple of weeks, he made amazing things. My 8-year-old is enrolled this year – hopefully, it goes as well.

In conjunction with learning cooking, I’ve been teaching the boys how to shop to save money. So far they aren’t very interested in hearing their dad talk about unit pricing on the shelves. There’s the occasional breakthrough, like when I point out that we could get more food for less money by making a different choice.

Being able to manage and limit one of their largest expenses can only help their financial bottom line in the future.

2. Fixing Stuff

I’m not handy at all. I can’t fix anything. I can barely work a screwdriver (maybe I’m exaggerating). If something breaks, I have to write a check.

That’s not good, especially because when you are a landlord like we are. If you are good at fixing things and home improvement in general, you can create a lot of real estate opportunities using sweat equity. You can do fix and flips of homes making hundreds of thousands of dollars tax-free.

I would love my kids to be better than I am at fixing stuff. Before COVID, Home Depot had “kid workshops” once a month. We only got to one before they shut them down. They do have kits that you can get and make small things like bookends. They’ve done that a bit for Cub Scouts. My 8-year-old loves building and figures stuff out quickly. I was able to give him the simplest Ikea shelves to put together at four and he got it.

Final Thoughts

I’m still thinking about what skills they’ll need to succeed in life. We focus on education and schoolwork. We also work on financial literacy (but not too much). Add in these life skills and some internal traits (grit for example) and hopefully, they’ll be ready for the real world.

Myth: Money Habits Are Set By Age 7

Money Habits Age 7

Whenever I research how kids learn about money, I come across the same claim:

“Money Habits are set by age 7”

Here are some examples:

If you are a parent of a 10-year-old, you may be shaking your fists in rage right now. The window of opportunity has closed and your child is doomed to a life of large debts and credit card fees. If only you had read about this a couple of years before!

You may also be thinking, “Why does educational programs like MoneyTime exist when they are intended for 10-14-year-olds.

This was my initial reaction when I read these articles. Call me naive, but I’m more optimistic. I believe that learning can be a life-long journey. I know I learned financial concepts after the age of 7. How many 7-year-olds do you know who can explain the value of index fund diversification?

Many of the articles declaring “money habits are set by age 7” don’t explain where they got that information. It’s presented as if it is just as reliable as our understanding of how gravity works. However, some articles do cite where they get that information. That’s a good thing because it allowed me to go track down the source.

The Money Habits Age 7 Study

That source is one research paper published by Dr. David Whitebread and Dr. Sue Bingham from the University of Cambridge back in 2013. You can read the Habit Formation and Learning in Young Children here. It’s 34 pages, but I warn you that it is fairly dull (and I’m a nerd who typically LOVES this stuff).

As you can tell, I’m skeptical about the research. I read it with an initial bias of “this can’t be true.” So it may not surprise you that when I finished, I came away with the conclusion, “This is complete hogwash!”

It’s not that the study is wrong or lying. It’s that I don’t believe the media is interpreting it accurately. Throughout the study, I find quotes that merely show that financial learning takes place before the age of seven. For example, take these two quotes:

“However, typically by the age of 7 years, the child is able to cognitively ‘represent’ value.”
“By the age of seven years, several basic concepts relating broadly to later ‘finance’ behaviours will typically have developed.”

These statements make sense. However, there’s a HUGE difference between learning taking place at one age and a lifetime of financial habits being cemented at the same age. My kids at seven understood the math concept of addition at age 7, but division and fractions came later. Just because a child understands the concept of adding, we don’t stop there and say, “the math habits are learned now.” No, we build on that math foundation. How else would children understand algebra, trigonometry, and calculus?

Perhaps the study’s best finding can be found in the opening statement of the conclusion:

“In summary, the evidence indicates that teaching young children explicit forms of ‘financial’ knowledge per se is likely to be ineffectual in shaping or changing their behaviours.”

My understanding of that conclusion is that young children likely can’t be taught money habits that are different than what they experience through their personal experience. That also makes sense. However, young children do grow and it would make sense that older children, tweens, teens, and adults of all ages can benefit from being taught personal finance.

Am I getting this wrong?

When I was looking up this study, I first came across the press release annoucing the findings.

What was interesting to me is that the press release highlights the business case behind the research. Specifically, it mentions Money Advice Service’s 2013/14 Business Plan. It also says that it will help them create “products and services.” That initially concerned me because I could the research being used to sell these products and services.

This is where I stress that the Money Advice Service is a non-profit that seems to be a government agency in England. It isn’t a company that has a nefarious plan to profit off of consumers (or at least I don’t think it is).

The press release also had a notable quote from Whitebread, one of the authors:

The ‘habits of mind’ which influence the ways children approach complex problems and decisions, including financial ones, are largely determined in the first few years of life. Simply imparting information is now recognised as being ineffective in this area. By contrast, early experiences provided by parents, caregivers and teachers which support children in learning how to plan ahead, in being reflective in their thinking and in being able to regulate their emotions can make a huge difference in promoting beneficial financial behaviour”.

That’s a lot of words, but it seems to boil down to what I pointed about above in the conclusion. Parents’ and teachers’ experiences with money and children age 7 and younger are important. It may not help to explicitly teach preschoolers about money other than to explain what you are doing as you do it just like you would when you teach a young child anything.

Also, importantly, the good news is that humans older than age 7 can control their financial future. Personal finance education still matters. Your 10-year-old is not doomed to a lifetime of debt.

Teen Titans Go! Money Lessons

Teen Titans Go MoneyNote: This article may sound like an advertisement, but it isn’t. I’m simply a fan of the Cartoon Network show Teen Titans Go!

I’ve worked from home before my kids were born. It was easy for me to watch television with my kids. When we discovered Teen Titans Go! it was simple self-preservation for me. I was desperate for a new show. I had enough of watching the “Fat Controller” berate Thomas the Tank Engine and his friends for not doing their job, while ignoring the employees who are on the train.

While we’ve tried a variety of other shows, one of the first ones that stuck was Teen Titans Go!

For those who don’t know the Teen Titans Go! characters, they are five teenage superheroes. However, instead of saving the day, they are usually doing something silly. For example, they find out what the Tooth Fairy is really doing with all our teeth. (Spoiler: He eats them!)

Each of the episodes below, I’ve watched at least 3 times. Some of them are probably in the double digits by now. Kids love reruns, right?

There are over 300 episodes of Teen Titans Go! The episodes cover a lot of mundane adult topics. For example, the episode tonight is about trademark law. There’s an episode tomorrow about health insurance. Clearly, these are the kinds of topics that weigh deeply on your 9-year-old’s mind. Don’t worry, kids love it because it is so silly. You’ll love it as you nod and say, “It’s so true!”

At least one of the writers is a big fan of personal finance. The Teen Titans have about a dozen episodes that center on personal finance topics. Let’s dig in and see what money lessons we can learn from them.

Top Personal Finance Lessons from the Teen Titans

Money is Whatever Currency We Choose

In the episode Two Bumble Bees and a Wasp, Robin (of Batman fame) tries to teach the rest of the gang about money:

“Money is not to be wasted on things that bring you happiness and joy! Money is to be hoarded until you have enough money that your money makes more money.”

I’m not sure too many children are going to pick up on that last point, but it certainly caught my attention.

Turning to a cartoon representation of money we get this lesson:

“I am paper, but I am also money. All I am is an agreed-upon representative of credit. Something you trade for goods and services! So I can be anything.

They go on to ask whether money can be a pineapple. (Actually, pineapples have historically been used as money.)

After Beast Boy insists that money is evil and rips up a dollar bill, Robin decides not to pay anyone until they respect money.

Flash forward to a day later and Beast Boy has a pizza. Robin would like a slice and offers to buy one with a dollar. He soon learns that the rest of the team has agreed that the new currency is bees.

Yes, bees. I told you it was a silly show.

It’s a good episode to build a foundation about how money works. It’s also useful to start a conversation about cryptocurrency.

It ends with this hilarious song and dance:

If you are interested, there’s a complete script of Two Bumble Bees and a Wasp here

Focus on Health and Wealth

In the episode, Think About Your Future, Robin announces that he’s buying all the Teen Titans expensive jackets.

Raven has an epiphany:

Raven: Aren’t you guys worried about wasting money?… So we have some later?
Starfire: But the later is not until the later. Currently, it is the now.
Raven: I know, but aren’t we going to get old one day?
Beast Boy: Yeah, but later.
Cyborg: And it’s the “now” right now.
Raven: Oh, okay, that makes sense.

So they buy the jackets. And then they celebrate with pizza, but not just any pizza it’s “extra-large, extra-extra cheese extra-extra-extra pepperoni, plus “large jugs of the soda” and “a gallon of ranch dip.”

Raven once again warns that perhaps they should eat healthier to avoid health problems later. Again, the rest of the gang doesn’t care about “later.”

The scene ends and we jump ahead to 70 years later.

The gang is old with many health problems. They can’t afford their medications because they don’t have any money.

They suddenly realize that Raven was right. So they do what anyone would do. They build a time machine and send their old selves back to talk to their teen selves into making more sensible choices.

That brings us to this clip about learning how to eat healthy, starting a 401k plan, and an explanation of compound interest.

Everything goes perfectly… too perfectly. The rest of the episode isn’t educational, but it is entertaining.

Again, if you are interested in the script, you can find it here

Building Wealth with Rental Properties

No cartoon is dumb enough to create an episode around a boring topic such as building equity from rental properties. No cartoon except for Teen Titans Go!

With episode after episode about silliness, the writers created, Finally a Lesson.

The best part of the episode is Robin explaining rental property and how to build equity:

If you can’t watch it, here’s Robin’s explanation:

“Equity is the amount of a property you truly own. It’s the difference between your loan balance and your property’s market value. If you sold your property and paid off the bank, the value of your equity is what you’d walk away with. When you build equity, you increase the net value of your asset. One way to do this is by paying off your mortgage.”

The episode takes them through all the steps. First, they find the right property – a run-down apartment building. Then they get to the financing, which involves getting 20% for a down payment. They do it the way that “everyone else does” ask someone else for that 20%.

Then we get to the other fun parts of securing a rental property… the loan process. There’s an explanation of credit scores, securing the right lender, filling out the paperwork, and getting a good faith estimate.

The gang is starting to get very bored, but Robin assures them they’ll be very satisfied in the end. For now, they have to turn their attention toward fixing all the problems with the building.

There’s a fun twist, but finally, Robin gets us to the satisfying end, “It takes decades to actually build equity, but in 30 years, it will provide a modest cash flow to pay for our numerous old people medications.”

For a cartoon geared towards kids, it’s as good of an overview that you’ll get. As my kids have gotten older and started to ask why we have rental properties, I just cue up the episode on the DVR (or Hulu) and ask if they have any specific questions.

You guessed it, the script is available here.

Avoiding College Debt #1

In the episode Who’s Laughing Now Beast Boy gets underarm hair, signaling that he is becoming a man. That means finding his spirit animal, which is “like college for dudes who turn into animals.”

With that, we are off on a Teen Titans Go! tangent questioning the value of college.

Raven: Uh, isn’t higher education usually really expensive?
Robin: Yes, but if he chooses the right spirit animal it will open a lot of doors for him.
Beast Boy: That’s right, Robin, my man. And then me and my hairy pits will be on easy street.
Cyborg: Whoa, whoa, whoa. While spirit animals are great, they aren’t necessarily for everyone. I’d hate to see you saddled with so much debt and in this economy, whoo! Personally, I think spirit animals have just become big business. Focus more on sports and partying, than education. Now with the money you’d spent on a spirit animal have you instead considered investing in, say, a rental property? Or what about looking into a training school?

Beast Boy: Whoa, check out those bears. Nice. That’s what I want my spirit animal to be!
Cyborg: But the cost of being a bear is astronomical. Maybe you should find a two-year community spirit animal, like that old donkey. Then transfer to the bears. In the end, you get the same spirit animal.

Beast Boy gets accepted by the bears and talks to his friends.

Robin: But how are you going to pay for this? I got some government loan of salmon and honey.
Raven: Whoa, that’s a lot of salmon and honey. It will take forever to pay that back.
Beast Boy: Once I’m a bear, I’ll be rich.
Cyborg: While data shows having a good spirit animal leads to a better paying job, there’s no guarantee those spirit animals are going to give you the experience you need to make it in the real world.

When things don’t go well with the bears, Beast Boy realizes that he made a mistake.

Beast Boy: I think you’re right, Cyborg. I should have bought a rental property.
Cyborg: Booyah. Told ya.
Raven: Well, consider it a lesson learned.

The last line is a reference to the rental property episode, Finally a Lesson that I covered above.

The episode goes off on a silly tangent, like all the episodes, before circling around to one last wise thought.

Cyborg gives a last shaming to the bears after defeating them:

That’s what you get for convincing people to spend thousands of dollars just to learn things they could figure out for free. Leave them with an amount of debt and a useless piece of paper that reads, “Diploma.” They’re pedaling a dream that doesn’t exist anymore.

The script for this one can be found here

Avoiding College Debt #2

In the episode Teen Titans Vroom, we get another lesson about college debt and career choice. This time it comes from villain Dr. Military. Dr. Military isn’t really a bad guy though, he’s a victim of the student loan system. Let’s start with this witty banter about his career choice:

Dr. Military: Actually, I’m a… veterinarian.

Titan: Everyone knows that’s not a real doctor.

Dr. Military: That may be the perception, but it took me ten years to earn my veterinarian degree. And statistically, it’s more difficult to get into veterinarian school than med school, which means I had to work twice as hard for half the respect and money of a so-called “real doctor.”

Titan: Sounds like you should’ve been a people doctor, bro.

Dr. Military: Enough. If I wanted to listen to someone criticize my career choice, I would have called my parents.

Now let’s get to the root of Dr. Military’s evil doings:

Titan: Please, give up the evil scheme, Dr. Military. You do not have to do this.

Dr. Military: Actually, I do. I need the ransom money to pay off my massive school loan. The high cost of veterinary school combined with my low salary as an animal doctor has put me in quite the financial bind. My evil plan is the only way out of this crushing debt.

Dr Military - Teen Titans Go Money

My 8 and 9-year-old boys don’t know much about college yet, but this will be something we can revisit as they get older.

How Taxes and the IRS Work

In Fat Cats (Season 7, Episode 22), the Titans win a big cash prize, but then learn that they have to pay taxes on it. This allows the writers to explore what a tax-free world looks like. It isn’t pretty:

It’s a great introduction to kids about why we have taxes.

Pyramid Schemes Will Make You Broke

I almost didn’t include this episode, but my wife mentioned that I should. I know quite a bit about MLM/Pyramid schemes and I didn’t feel this episode addressed the topic very well. However, many adults can’t understand pyramid schemes, so I can’t expect the Teen Titans to teach kids this complex topic well. As usual, my wife is correct and it’s just my own extensive writing that artificially raised expectations.

The Teen Titans Go actually have a very good description of a pyramid scheme in this 2 minute clip:

The key money quotes almost always come from Robin and this is no different:

Robin: This is a pyramid scheme!… Not that kind of pyramid! A pyramid scheme is an unsustainable business model, that promises payments to participants, based on the amount of additional people they enroll in the business, instead of focusing on the sale of goods or services to the public… As you can see here, the exponential growth of the “business”, will eventually cause the entire operation to collapse, leaving the participants at the bottom of the pyramid bankrupt, while those at the top walk away rich…

Starfire: I do have the question. Did the mummies build the pyramids?

Robin: There are no mummies! It’s not a literal pyramid!

Almost everyone in MLM doesn’t understand this concept and still go meetings to learn how to show the plan or enroll people in the business. In fact, the people who make the most money in every MLM are the people who have the largest downlines of enrolled people, not sales of goods or services to the public.

Beast Boy joins and makes Pyramid Scheme money which leads to this awesome song:

Of course, the rest of the gang (sans Robin) want all the money, so Beast Boy enrolls them as “money deputies” with himself as a “money sheriff.” Robin warns them, “You are participating in a fraudulent business” and “This pyramid scheme is going to leave you broke, Titans.”

Everything spins out of control and gets mixed in with mummies wanting their money back and the Teen Titans not being able to deliver. They get out of it with some silly stuff that doesn’t make sense, but by this point, they’ve addressed the topic fairly well.

Once again, you can find a transcript of the episode here

Final Thoughts

I really don’t know how much financial information my kids are absorbing from this, but I know that they remember nearly everything they see.

I’ve watched my share of cartoons and I can’t think of any other general cartoon that covers half of the financial topics in Teen Titans Go! There are still a lot of episodes that I haven’t seen, so I might have missed a few money lessons.

If Teen Titans Go! isn’t your thing, maybe you should try a different money television show.

Where are the surprising places you’ve found money lessons? Let me know in the comments.

Teach Your Grade-Schooler About Money

Grade-schooler Money

Recently, I wrote about how to teach your preschooler about money. It included a lot of basic things like recognizing coins have different values. Once they get to elementary school, they can start to tackle bigger money issues.

Before I get into the money part, I need to address one elephant in the room. There doesn’t seem to be a good name for children ages 6-10. They aren’t preschoolers and they aren’t tweens. I found a couple of places calling them grade-schoolers, so I’ll go with it.

One of the great things about this age is that you can do so many things that you couldn’t for a preschooler. Let’s look at some of the things:

Savings and Spending

By grade school, kids often have an allowance. That means they can make more of their spending decisions than a preschooler. My kids started to want more complicated things. Sadly, the days of decorating a big cardboard box like a rocketship and flying to the moon isn’t enough. They wanted to save up for a Nintendo Switch and the latest Pokemon games. Now I spend most of my time trying to pry them off of video games. That’s a topic for a different blog or article.

Unfortunately, with the example of the Nintendo Switch and Pokemon games, we couldn’t shop around and try to stretch a dollar. We got one a few months before COVID hit and considered ourselves lucky that we got one at all.

Earning Money

Grade schoolers can do extra chores around the house to make some extra money. My kids help out with the dog boarding business that I run at home. It’s only fair that I give them some money. Unfortunately, it’s uncommon that kids can reasonably help in your professional life.

There are other things that kids at the upper end of this age range can do. They may be able to babysit a younger sibling for a short time. They may be able to bake some pastries for a bake sale.

A lemonade stand may sound antiquated but it can work. Our area has limited the places where lemonade stands can be. I guess they didn’t want kids pestering the tourists. We run a virtual lemonade stand using a version of a lemonade stand game I played as a kid. This is a great way for kids to about supply and demand.

Other Financial Education

This age group is a great time to teach kids money with televsion. Some episodes of Teen Titans Go make learning about real estate investing fun. Other shows like Warren Buffett’s Secret Millionaire Club are greatly focused on personal finance.

Additionally, you can start to share the family finances with your kids. You don’t need to share everything, but you can share some of the necessary expenses that the family has.

How To Teach Your Kids About Money

Teach Kids Money

I am passionate about several things, but two of them are teaching kids and money. Teaching kids comes with the territory of being a stay-at-home dad. I couldn’t have gotten through 15 years of money blogging if I found financial literacy a chore.

There are so many ways to teach kids about money… perhaps too many. I started outlining this article and found more and more ways to teach valuable money lessons. It’s easy to go overboard, remember that young children need to just be children. Money management should be near the bottom of their priority list. That’s why many of the suggestions below focus on things that kids find fun.

  1. Set a Good Example
  2. Whether you like it or not, your kids are watching you all the time. They see a lot of the everyday ways that you use money. I know my frugal and investing habits came from my mother. As a young child, I remember rare triple coupon shopping at the grocery store. As a teen, I would also read the copy of Kiplinger’s Personal Finance magazine that came to the house. That was a good way to learn about financial topics such as corporate earnings and interest rates.

    Consider giving your kids an allowance. They’ll create strong money habits if they are allowed to occasionally purchase their own toys. One of the core ideas is to have a “give, save, spend” piggy bank, such as this one. It’s a fun way for them to sort where all their pennies should go.

  3. Check Out Money Books for Kids and Parents
  4. There are two main ways to teach kids about money with books, give them one or read one yourself. I recommend doing both.

    The best book to give a kid to teach them about money was written in 1989. It’s If You Made a Million. It’s written for kids and introduces them to coins, saving, spending, investing, compound interest, mortgages, and even financial independence. It does it with excellent illustrations. I wrote a review of If You Made a Million here.

    If you are looking for a second book, I helped fund one on Kickstarter. I got my copy recently and it is very good. It is M is for Money by Rob Phelan. You can pre-order it now.

    Finally, if you are looking for a book to help you teach your kids about money, get Make Your Kid A Money Genius (Even If You’re Not): A Parents’ Guide for Kids 3 to 23 by Beth Kobliner. It’s a great read from cover to cover. What I love about this book is that it covers teenagers and young adults. Older kids benefit from financial lessons too.

  5. Listen to some Kid Money Podcasts
  6. I have to be honest, I’m not a podcast person. I think it’s because I can’t listen to one thing and write about another at the same time. I’ve found two very good money podcasts for children.

    Kids, Money, and More

    This is mostly for very young kids, such as kindergartners. It covers the basics of how to save, being mindful about your spending, and giving. Anisa Kurji and her two sons take you through a money journey in about 10 minutes (or less). It’s perfect for the ride to school. There are only about 10 episodes, but that might be enough to mix in to change the routine every couple of weeks.

    Million Bazillion

    This podcast tackles interesting questions like why we need money and how it came about. Most of the episodes tackle one question. Each episode is about 22 minutes long, so you could plan for this on long car rides. This is a good speed for my 9-year-old.

    It’s sponsored by Greenlight, which is a debit card for kids. I haven’t heard too much about it, so if you have experience with that, let me know in the comments below.

    NPR’s Planet Money Summer School

    There are two seasons of Planet Money Summer school that are perfect for teaching teens about money. Season one is about macroeconomics. Season two covers the basics of investing.

  7. Teach your kids about money with television
  8. I know, kids watch too much television these days. It’s good to have limits. However, if they are going to watch television anyway, you can use it to advance their financial education. There are two shows that I think you should focus on.

    Teen Titans Go!

    That link goes to a list of about a half-dozen episodes that focus on personal finance. There are more than 325 episodes of Teen Titans Go! so it’s usually not about personal finance. However, there’s an episode about building wealth with rental properties. That covers the importance of good credit history and credit score. Another episode teaches the value of money with a weird analogy of bees being the currency.

    Warren Buffett’s Secret Millionaire Club

    Did you know that Warren Buffett’s entrepreneurial lessons are available as a cartoon for kids? Yep. You can watch over twenty episodes of his group of young teens learn money lessons. It’s free to stream, with no subscription service to buy. Usually, I mix this in as a treat on days that I’ve had to homeschool as a break.

    Looking for more ideas? See our main article on how to teach your kids about money with television.

  9. Money board games with the family
  10. Every reader has to be familiar with Monopoly, so I won’t waste words covering it. You are also probably familiar with the game of Life. It wasn’t until playing that with my kids recently that I realized it can teach the importance of having a high-earning career at an early age. Perhaps the best of the mainstream money games is Pay Day.

    The best board game to teach your kids about money is The Allowance Game. You earn money for doing things like mowing the lawn, but you can lose money if you break a window. Like all the other board games you use play money which is good for learning math concepts like addition and subtraction. This one adds coins to the mix which is great for learning decimals.

  11. Online courses to teach your kids about money
  12. When COVID-19 hit, parents and kids turned to online learning. It wasn’t as good as being in the classroom, but many kids now have improved computer skills. That makes online courses for teaching kids about money a perfect fit.

    MoneyTime – Financial Literacy for Kids

    I reviewed MoneyTime at the link above. It’s designed for kids ages 10 to 14, but my oldest battled through it when he was 8 and it went okay. He’s 9 now and his math skills have improved a lot in the last year. Unless you’re an evil parent writing about kid money, I would stick with those recommended ages. If I were to build a personal finance curriculum for kids MoneyTime would be a core component.

    Choose FI Foundation

    The Choose FI Foundation has another money course for kids designed for kids in the 3rd to 5th grade. I haven’t gotten the opportunity to review this yet, but I have a 3rd grader now, so hopefully, we get a chance over one of the school vacations this year.

    Both of these courses cover important topics like the danger of credit cards and bad debt.

  13. Video games can teach kids about money
  14. One of my earliest memories of learning about money comes from the classic video game Lemonade Stand. There are ad-supported free versions online and versions in your mobile app store of choice. It’s a great way to learn about supply and demand, but it will probably get old after a few hours.

    If you are looking for a 2021 version of Lemonade Stand, I suggest Pizza Company by Osmo. Osmo makes video games come alive in the real world. You set the tablet in a stand and a mirror redirects the camera in front of the tablet. Kids build things in front of the tablet and the Osmo game interprets it on the screen. It sounds complicated but it’s so easy a 4-year-old can get it. The Pizza Company game is better for kids age 7 or 8 though. If you are curious about the Osmo learning system, I wrote a review here

    When I was in high school my graphic calculator had a game called Dope Wars (it also goes by Drug Wars). Due to the content (i.e. illegal drug trafficking), it’s best for older kids. Essentially the game taught you how to buy low and sell high. Wired has a history of the game which is 40 years old this year. You can get a version on the Google Play store here.

    Looking for more? Kimberly Palmer from NerdWallet covers four money conversations to have with your kids which come up from playing Minecraft and Roblox. My kids love these games, but I don’t understand them.

Final Thoughts on Teaching Kids about Money

Research shows that kids develop their money behavior from a young age. Unfortunately, financial literacy is not taught in many schools. That leaves it up to parents to fill in the gap. With the above resources, you can mix and match the education necessary to build a foundation for a great financial future.

Kiplinger’s Tips for Raising Money-Smart Kids

Raising Money Smart Kids

I love whenever anyone’s best tips for raising money-smart kids. However, Kiplinger’s Personal Finance Magazine holds a special place in my heart. I’ve been reading Kiplinger’s since… well, I was a kid. My mother subscribed to it and I was interested. She had explained compound interest to me a long time ago. Back in those ancient days of around 1988, banks paid a real interest rate – around 7-8% if my memory serves. I had some money saved from my paper route and first job at Papa Gino’s Pizzeria, so it seemed like a good idea to learn more about investing worked.

A lot of personal finance is now online (such as this site), but I’ve been a Kiplinger’s subscriber since around college. You can get a couple of years of it for around $40, which is a great deal compared to the cover price of a whopping $6.99. I’m all for recognizing the value of financial advice, but that’s a lot of money for 72 ad-filled pages of often out-of-date information. It shows how difficult the print world is nowadays.

Today, I’d like to cover Kiplinger’s tips for raising money-smart kids, which was spread out over two issues last year. Specifically, I’m talking about Janet Bodnar who runs the Money Smart Women column. Fortunately, the column covers some fathers who have tips about raising money-smart kids too. Personal finance should be something the whole family can be a part of. My family is a real-life example of it… I just happen to have a crazy obsession.

Part 1: Kiplinger’s Tips for Raising Money Smart Kids

In the first article, Janet Bodnar covers What Kids Need to Know About Finances. She’s literally written the book Raising Money Smart Kids, but to be fair there are more than a few books with that title.

The article makes a point that high-net-worth women have jumped into estate planning due to COVID. These families with a lot of money want their kids to know how to take care of it. Maybe we fit that profile too. However, I’m far from the stage of worrying about how my 8 and 9-year-olds are going to manage money years from now. I simply want to help them have a foundation now rather than be disappointed later. It’s what I know and what I’m passionate about, so I might pass that knowledge on.

The article continues that the two most important things to teach are spending and saving. I agree, especially for young kids. Older kids have more opportunities to focus on earning more and investing. That said, I believe that schoolwork comes first, so earning more has to be “work smarter” rather than “work longer/harder.” At least investing can be very quick, setting up an automatic investing plan can be done in just a few minutes.

The next tip was to have younger kids use cash and let older kids use an ATM account attached to a bank – avoid credit cards. This tip is reasonable. Although, I should mention that my kids have been authorized users on my Amazon card for a few years now. They have no idea about it and wouldn’t know where it is or how to use it, but it will help them earn credit whenever they need it.

The final tip was that young kids don’t need to know about the family income. I think that’s obvious. Young children are still learning place value and numbers like hundreds of thousands simply don’t make much sense.

Part 2: Kiplinger’s Tips for Raising Money Smart Kids

As a follow-up to that article, Bodnar shared some reader tips on raising money smart kids.

One reader shared a “parent matching” strategy. That’s where a parent will reward a child for saving with more money similar to how a 401k match works at many companies. Another reader made it simple, “Live below your means.” Finally, one reader stressed the value of saving over earning, because you pay taxes on money earned.

Some readers disagreed with the above tip about not giving kids credit cards. Like me, one reader wanted their children to establish great credit at a young age. Another reader required kids to pay it off in full every month. I love that last tip as it builds a habit and establishes the importance of it before the kids are on their own in college.

Finally, Bodnar recommended two books for helping high school students with investing, The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of and How to Turn $100 into $1,000,000: Earn! Save! Invest!. For younger kids, I have my own opinion on the best book to teach kids about money.

Aside from books, I would add a podcast for teens, NPR’s Planet Money’s Summer School on investing.

I found all these reader tips (along with Bodnar’s book recommendation) better than the original article. Over both articles, there are plenty of good tips – definitely worth a few minutes of your time.

Teach Your Kids About Money with Television

Teach Kids About Money With Television

Does it make sense to teach kids about money with television shows? At first, it may make sense to avoid it. Some argue that kids watch too much television these days. It’s good to have limits, but I think television can be a useful tool.
My opinion is, if they are going to watch television anyway, teaching kids financial literacy is a good use of that time. I’ve put together a few shows that can help form (or supplement) their financial education.

Teen Titans Go!

Teen Titans Go! has 7-10 episodes that cover many important personal finance lessons. Since there are more than 300 episodes of Teen Titans Go! use this guide to look up the specific episodes on Hulu.

There are very few other places where you’ll find an entertaining episode about building wealth with rental properties. One episode covers the importance of good credit history and credit score. Another episode teaches the value of money with a weird analogy of bees being the currency – a perfect starter to talk about cryptocurrency. There’s also an episode with an analogy of taking on too much student loan debt to go to the dream college instead of making the fiscally smart decision.

Warren Buffett’s Secret Millionaire Club

Warren Buffett has a cartoon teaching kids entrepreneurial lessons. There are more than twenty episodes of his group of young teens learning money lessons. It’s free to stream on Kartoon Channel at the link above. No subscription service to buy!

School House Rock

Decades ago, School House Rock famously taught millions of kids how a bill became a law and how parts of speech work. I don’t remember seeing their lessons about money, but my local library had a DVD that was pure gold, Schoolhouse Rock: Money.

It’s another great way to teach your kids about money with television and you can watch all 8 money lessons on YouTube! These videos aren’t the best quality.

If you have a Disney+ subscription, you can get perfect quality by looking up School House Rock and skipping to season 6 for all the money lessons. The other seasons cover a variety of different topics that are worth your time too.
If you have a Disney+ subscription, look up School House Rock and skip to season 6 for all the money lessons. (While you are there check out all the other seasons.)

The short songs cover money management, economics, taxes, the national debt, investing in stocks, and dollar-cost averaging. There’s a little history of money, explaining how barter and coins work.

Cha-Ching Money Smart Kids

There’s a very complete curriculum of money education available at Cha-Ching Money Smart Kids. The lessons consist of 3-minute videos and PDFs designed for teachers (classroom activity) and parents (family activity).

Dr. Alice Wilder, the creator, is known for Blues Clues, Tumble Leaf, and Super Why, one of my favorite shows for teaching younger kids how to read.
Forbes gave Cha-Ching Money Smart Kids a good review.

Shark Tank

Older kids may appreciate Shark Tank. While some topics may be boring to kids, there are quite a few episodes with kids who are entrepreneurs. My oldest saw an episode where a kid started a dog treat business that was very successful. He wanted to start cooking right away.

Biz Kid$

Biz Kid$ is a show designed to teach kids everything about personal finance. You can find some clips here. Those clips come with a lesson plan. All the lesson plans are available in English, but some are available in Spanish as well.
There are a few free streaming episodes on Vimeo.
Unfortunately, if you want to watch all the episodes, it is quite expensive. It seems like the pricing is geared towards school districts. Each 28-minute episode costs $5 to buy or $2 to rent. It would cost about $350 to buy all 71 episodes. You can buy a subscription to stream seasons 1-3 for $30/mo. You’d have to buy another subscription to stream seasons 4-6 for another $30/mo.
So if you were really good about binge-watching 71 episodes, you could do it for $60. That’s a tall order.
I haven’t taken the time to watch this series yet, but I hope to at least watch and review the free episodes soon.

The Toy Box

I’ve never seen this show, but I’ve read some interesting things about it. It sounds a little like Shark Tank where kids (and toy experts) are judges of toys. I’m not sure how much personal finance it will teach, but it sounds like it would be a fun show.
You can buy each of the two seasons of The Toy Box for $15 on Amazon. I can’t seem to find it available for streaming on any major platform.

Final Thoughts on Teaching Your Kids Money with Television

There are a lot of resources out there. I think it makes sense to start with the free ones like Warren Buffett’s Secret Millionaire Club. We’ve watched most of them and, while it isn’t our kids’ most favorite show, it’s among their favorite learning shows.