What *Every* Kid Should Know About Money That Most Schools Don’t Teach

Not surprising, the same report found that most Americans agree that knowing how to manage your money is a core life skill that kids today should learn, ranking it higher in importance than knowing the dangers of drugs and alcohol. The silver lining? We can turn this economic downturn into a teachable moment for our kids.

We chatted with personal finance expert Carrie Schwab-Pomerantz, whose "superpower" is advocating for financial literacy – or, understanding how money works – especially for women and girls.

"Starting early not only develops good lifelong habits, but gives kids more 'at bats,' says Schwab-Pomerantz, who recommends starting as young as pre-K with simple (but important) life lessons like sharing, counting, and even saving. "In other words, it gives them more opportunities to learn and try things first hand when the stakes are small. It takes practice to get things right, including financial lessons."

Here are six fun tips for teaching kids about money now that will give them financial confidence later. Plus, a few tricks we can all learn from these days!

1. Teach About the Cost of Things. Playing store at home or taking a trip to the grocery store is a great opportunity to teach about comparison shopping and budgeting, says Schwab-Pomerantz. We all run into that issue of kids eye-ing a pricey toy on the shelves during a quick stop at the store. Take that moment to teach the difference between birthday or holiday gifts (A.K.A. higher price points like $30 and above) and everyday buys (say, under $10). "We'll put that one on your birthday list," is our go-to for the spendy eye candy.

The key is to make sure lessons are timely, relevant, and age-appropriate. "When my daughter was 5, I started giving her an allowance of a dollar a week so she would get comfortable around money," says Schwab-Pomerantz. "But when I started finding the dollar bills on the floor that told me she was too young still to have an allowance." We can totally relate to that experience!

2. Give Them a Space to Save, and Give. Get creative with money jars or envelopes to introduce kids to spending, saving, and charitable giving. "What I love about the jar concept is that kids can easily see how their money is allocated – they might see that their "Spend" jar is filling up, but their "Save" and "Give" jars are light," says Schwab-Pomerantz. "It's a simple visual way for them to see where their money is going and whether their allocations align with their values." The latter being something you can coach them on as they start to turn this practice into a habit.

DIYers can create a fun art project from this idea. We used letter beads to spell out "Give," "Toys," and "Save" but you can also decorate them with construction paper, dip them in paint, add sparkle with glitter pens and more. If your child's "Give" jar is supporting a local pet shelter, they can glue on animal figurines – again, it's all about the visuals at the younger stage!

3. Level the Playing Field for Girls. We're all about this tip. Studies show that the gender wage gap starts at home, with boys earning twice as much as girls for household chores, says Schwab-Pomerantz. "We also know from research that parents tend to talk to girls about household finances, like saving and budgeting, and to boys about wealth-building concepts, like investing and borrowing." That means our daughters are leaving home *without* the knowledge they need to be financially secure. Mamas who need to brush up on investing basics can check out Schwab MoneyWise: Teaching Kids so you're prepared for that conversation.

4. Make Earning Money Fun. Reward kiddos for helping out around the house; kids as young as 2 and 3 can put toys and clothes away, fill a pet's food dish, and help with dusting. "Linking an allowance to chores helps children learn how to earn money by doing something and getting paid for it," says Schwab-Pomerantz. Of course, you can also keep an allowance separate from chores. Instead, get them involved in garage sales, setting up a lemonade stand, or selling cookies to fundraise for their school or a cause they care about.

5. Talk to Them About Your Own Mistakes. If you've been laid off, furloughed, or just have to stick to a tighter budget during this crazy time, be honest and open with your kids (in an age-appropriate way). "One of the easiest things to do is have a conversation around the dinner table," says Schwab-Pomerantz. For older kids, teaching them how to live below their means is super important as they move into more #adulting roles. "While you're talking about your child's day, look for opportunities to talk about their goals (from buying a new bike to going to college) and how to pay for them." Sharing your own experiences can be a lesson in how to navigate their own finances.

6. Open Their First Bank Account. Squirrel away all those grandparent checks and tooth fairy dollar bills in their own bank account, and make a day of it! "When my kids were teenagers, I took them to the local Schwab branch to open checking and savings accounts so they would get comfortable with the paperwork and being in that atmosphere," says Schwab-Pomerantz. "When they were a little older, they opened IRAs and investment accounts. It was fun to watch them review their statements and get excited about their money growing."

For Parents

Feeling good about teaching your kid money management skills now? How about your own? Schwab's survey found that Americans are more concerned about their financial health than their physical health. (Amazing.) Here are five key things that we can all do right now:

1. Start an emergency fund to prepare for the next unexpected expense shock. "Set aside whatever you can – every little bit counts," says Schwab-Pomerantz. Try to aim for $1,000 to $2,000 to get started, and then work your way up to 3 to 6 months worth of essential expenses over time.
2. Create a budget to help you prioritize and determine your must-haves vs. your nice-to-haves. "Self-isolation has led to different spending patterns for many people, including cutting back on what we may have previously thought of as essential," says Schwab-Pomerantz. Our makeup bags are slimmer these days too…
3. Create a financial plan to help you navigate from where you are to where you want to be. You don't need to have a lot of money to do this (there are plenty of money management apps that can help you finance DIY, including Schwab's Mobile App). "Consider it a roadmap to reach your financial goals, whether that's to pay off debt, build savings, or make a large purchase," adds Schwab-Pomerantz.
4. Ask for help if you're struggling. Government, banks, and creditors are all trying to cut us a break during this difficult time. See what programs your bank and utility companies are offering if you need to defer payments. "Don't hide from creditors," says Schwab-Pomerantz, "that can make things worse."
5. Focus on what you can control. It's easy to get stressed out when you see headlines about a tanking economy or the future of the economy. "You can't predict or control the market," says Schwab-Pomerantz, "but you can control how you manage your investments, your savings rate, having a financial plan and how you react to events," says Schwab-Pomerantz. Be proactive using these tips, focus on the road ahead with a smidge (or a lot) of positivity, and you'll be in a better position in case of another financial storm.

Have a great money lesson for kids? Share with us @BritandCo!

Photography by Kurt Andre and Brittany Griffin

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