Teach Your Children Financial Literacy – It’s Important
As you shelter-in-place during this COVID-19 pandemic, you are probably keeping your children busy doing a variety of chores, with either an allowance or special compensation for completing them. What a perfect opportunity to also teach them about financial responsibility and smart money management.
Just as learning how to vacuum, do laundry, and mop a floor are essential life skills to have, understanding how money works is even more critical. Virginia is one of only five states that require high school students to have financial education or demonstrate financial literacy in order to graduate. You can be using your quarantine time to help your kids get a head start on the subject. According to the FIRA (Financial Industry Regulatory Authority), 63% of all U.S. citizens are “financially illiterate.” Don’t let your children add to that figure by teaching them the basics of managing a budget, understanding interest rates, investing and taxes, and the importance of insurance to protect themselves and their belongings.
What is Financial Literacy
Financial Literacy is defined as the understanding of knowing how to earn, save, spend, and invest money, as well as the skills and ability to use financial resources to make decisions. This includes things like knowing how to balance a checkbook, comprehend personal income taxes, keep to a budget, and how to invest wisely. People considered financially literate also know concepts like the time value of money, debt management, and compound interest, enabling your child to make smart financial decisions on things like college loans, buying a car, retirement, and, yes, insurance.
By 2025, 75% of the workforce will be made of Millennials. Are they prepared to manage their personal and business finances? Statistics say no. Over 76% of millennials lack basic financial knowledge, and four out of five say they were never given the opportunity to learn about personal finance. Twenty-two percent say they feel overwhelmed about their finances, and thirteen percent say they feel scared.
How To Start
April is National Financial Literacy Month. Use it to help your children get a jump on knowing how and when to save, spend, and invest. We know our children are glued to their tablets, computers, and phones, so install an app that can help them learn. Here are just a few:
Available for iOS | For kids ages 7+
Savings Spree is a Parent’s Choice Award winner that is engaging, fun, educational, and easy to use. Kids can use practice sessions to learn about earning, spending, and saving. The app explains concepts like investing and charitable giving, as well as short and long-term savings.
Available for iOS and Android | For children ages 6+
A REVERE award winner, Renegade Buggies is a fast-paced game that teaches financial literacy with a focus on saving as much money as possible when grocery shopping. Strategies, like comparing package sizes and buying in bulk, are included in the game.
Available for iOS and Android | For ages 7+
This app serves as a virtual bank without kids being tied to an actual savings account. With it, a child can set goals, like saving for a new computer or smartphone. The app teaches money and its value.
FamZoo Family Finance
Available for iOS and Android | For kids 13+
FamZoo shows older kids how to be more responsible for their spending. How money works, how to budget, and how to save are emphasized. Every family member is issued a card that links to the app. Parents have the role of bankers, kids as customers. The app’s bank accounts record all transactions, so kids learn financial experience in a monitored environment. Credit card debt, safe online purchasing, and how to track money earned from doing chores and odd-jobs are neat features.
There are many more apps that you can research to find just the right fit for your child and family. Making Financial Literacy fun is the key with kids. Help your children become financially responsible now and it will pay high dividends later.