By Roberta L. Nestor
Who is educating our children about personal finance? According to a New York Times article written in January, most states are severely lacking when it comes to teaching high school students about finance. The 2017 Financial Report card (compiled by Champlain College’s Center for Financial Literacy) only gave 5 states an A grade for their efforts to promote financial literacy. Twenty-seven states received a C, D and, or even F grade! Sadly, CT was one of the few that received an F. In CT personal finance in our state is not included with graduation requirements, and further, it is not required to be offered in any form. However, in 2021 it is slated that our state will offer personal finance as an elective and count toward the career and life skills that will be required. In the meantime – parents have to step up to the plate.
You can encourage good financial habits at any age! For example for ages 4 and younger, consider toys that incorporate counting. If you go to Amazon and search for “mathematic and counting toys” there are several pages of results. For ages 5 – 7, good old-fashioned board games that highlight financial decisions that are educational and fun (The Game of Life and Monopoly). This is also a good age to begin a traditional bank savings account. Typically between ages 7 – 12 is a good time to introduce having an allowance and helping them to manage it. Allowances should be scheduled (weekly, monthly, etc.), be consistent and come with a discussion of how much should be saved, spent donated or invested.
There are websites and apps galore for young children that encourage savings. Spend some time on www.moneysavvy.com. They actually have a piggy bank that can be purchased that has different slots for savings – one for savings, another for spending, donations and lastly investing. Web and app based “Monetta” offers educational games that are interactive as well as a quizzes and a quarterly newsletter. The “Money Puzzle” app gives financial awards for correct answers to math questions. Another app that covers specific learning techniques for grades 1 – 12 is www.jumpstartclearinghouse.org. Lastly, the “Centsables” is a financial literacy program that uses superheroes to make learning more interesting and fun.
As your children get into their young teens, it will be time to have the “money talk”. Try to be open about family finances and discuss the family spending habits. Help them to understand how and why some purchases are done with a credit card, versus a debit card or cash. Parents might even share their own short and long-term financial goals. These conversations are especially important during the teen years, and relevant when they get their first paycheck. Sit down and help them understand what taxes are and where that money goes. They should even be made aware about tax returns and the basics of income tax filing.
Books still rule, especially when it comes to education and MoneySavvy.com has some recommendations for teens and parents. “O.M.G. – the Official Money Guide”, “Growing Money: A Complete Investing Guide for Kids”, “Smart Money Smart Kids: Raising the Next Generation to Win with Money” and “Raising Financially Confident Kids” are all great places to start. Don’t hesitate to ask your financial advisor for ideas on helping you to educate your children about money. They have so many resources and would more than likely enjoy meeting with your children to give them a basic educational session to guide them with financial literacy.
Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.