Food for thought
A year ago, back-to-school shopping was predictable: erasers, pencils, binders, you know the drill. This year, parents are doing the unimaginable. On top of back-to-school shopping for regular supplies, you’re searching for masks, desks, new WiFi packages and maybe these crazy new things called pandemic pods.
Not sure what to do about it? Start with these 5 money tips for all you families going back-to-school online.
1. Address (but don’t stress!) the “what ifs”
You and your kids might be playing the “what if” game right now, and a lot of your questions may be about money. Plan a day to hold a family town hall, and use this time to explain how virtual learning is affecting your finances.
Answer your kids’ questions, ask them questions, and talk it out until you’re feeling ready to take on the new school year. You don’t need to pull up your master budgeting spreadsheet. Just show them how you’re cutting costs to afford new ones — or follow this helpful guide to make the conversation easier.
2. Make savings goals as a family
A recent Deloitte survey shows us a new spending category for back-to-school shopping this year: personal hygiene products and desks. You probably never thought you’d be buying masks and computer accessories for the new school year, did you? To make these new costs possible, saving will be important.
Show your kids how you’re saving money. Then, set goals as a family! Maybe your goal is to limit spending on takeout or to put more of your paycheck in your emergency fund. Or maybe you’ll ask your kids to chip in for their school supplies — just have them set a savings goal in their Greenlight app.
3. Divide and conquer (the house)
Let’s be real — when you have a lot on your plate, one of the first things to take off your to-do list is household chores. You’re trying to work, teach, babysit, entertain and stay sane… and on top of that, you’re supposed to clean the house?!
Hand some chores over to your kids — we’ll get them all organized for you in your Greenlight app. Tell them they can earn more money if they double up on chores for the week (hello, negotiation skills!). Or explain to them that it’s part of their contribution to the house.
This will save you time and give you a squeaky clean house. More importantly, it gives your kids a glimpse of the real world. They’ll have to choose how they want to manage their time, and they’ll get practice juggling different responsibilities.
4. Team up with other families
It helps to know that you’re not going through this alone. Reach out to classmates’ parents, neighbors and family members for support and ideas about how to handle a semester of virtual learning. There are socially distanced ways to save money, time and hassle together — here are a few:
- Buy in bulk. Anything from school supplies to desk wipes can be bought in bulk so you and other families can save money. To keep your distance, you can quickly organize a bulk shopping drop-off. Smile and wave from afar!
- Swap ideas. Some families are making private Facebook pages or group texts to chat about ways to save money and make virtual learning (and life!) easier.
- Join our Facebook group to connect with and learn from like-minded parents and Greenlight team members.
- Start a group Pinterest board. Spread the knowledge with pictures, money-saving recipes and digital coupons.
5. Don’t be afraid to ask for help
This goes for you AND your kids. We’re all experiencing challenges in different ways, and a lot of these challenges impact our money situations. We’re here to make saving easier, help you manage chores and set savings goals with your kids — but here are some additional resources that might be able to help.
- See if your family is eligible for benefits. There are lots of resources available on Benefits.gov.
- Keep your kids busy, without extra work for you. We pulled together a list of resources that have worked for our Greenlight parents who are spending more time at home with their kids.
- Access free books online. Wilbooks is a site with more than 2,000 free books online. They’re sorted by grade and language so you can quickly find books that are right for your kids.
- Use virtual afterschool programs. Mizzen by Mott is a free app that gives you lessons and fun activities to keep your students busy and engaged even when the school day is over.
A hug from us to you
The best tip of all: take a deep breath when you need to. It’s hard to stay calm with questions and worries, but you’re not alone. We’re sending virtual hugs your way. Check back often for more tips on going back-to-school online — and if you haven’t already, download the Greenlight app and get started!
For many high school seniors, May 1st is an important day: National Decision Day. It’s the day they decide what comes after high school — the first of many big decisions they’ll make for themselves. This year, it also marks a day in which their decisions are heavily impacted by the world around us.
They did the work, took the tests, made it through the teenage years and now have their sights set on graduating high school. While you and your family explore different ways to commemorate this milestone (perhaps with video calls and virtual graduation parties?), we hope you can still find time to talk about the next chapter of your child’s life.
The new-age debate
Our Gen Zs live in a world of entrepreneurs and self-starters. They’re seeing success as seven-year-old YouTube influencers make millions and 16-year-olds start their own companies.
So it makes sense why your kids will have different thoughts and considerations surrounding the college talk. That’s not to say that they don’t want to go to college — they just may not see it as the only option. As parents, we need to listen to that so we can guide them toward a decision that we all feel good about.
To sign or not to sign? What to consider
The college talk isn’t just on National Decision Day — it’s year-round. It’s a good idea to stay in the loop with the merging views on the subject. When you delve into the college talk, you may come across split views on a few things:
Because every financial situation is different, student loans are a hot button for many parents. If you and your kids are thinking about student loans, take time to explore every avenue and talk about how it will impact them throughout and after college.
In 2018, the average individual student loan amount was $29,200. Loans may or may not be an option for your family. Either way, National Decision Day is a great opportunity to talk through the numbers with your soon-to-be grad.
Public vs. private vs. community:
The good news is we’ve got lots of options. The not-so-good news? Well, it’s hard to decide! It’s no secret that most private schools come with a heavy cost and community schools are typically the most affordable. Public schools tend to sit somewhere in the middle of the two.
Talk to your kids about finances — how they’ll be managing their money throughout college, pros and cons of an expensive school and what matters most to them. Your conversation could bring you to a cost-benefit analysis (bonus!) or it could spark up a new outlook on the entire decision-making process.
Anyone else feel like their kids are too young to decide on a career path? In many ways, they are. That being said, they may have a different perspective. 91% of high schoolers believe they know their dream job, according to a survey done by EY and Junior Achievement.
To them, a career is fun, exciting and adulty (their word, not ours). You know better than them that careers are not just about fun — they’re about financial security and stability.
The transition out of high school is a prime time to have an open, honest conversation with your kids about this. You have the best insight into your kids’ strengths and interests, and you can use this knowledge to help them choose a path that will give them the biggest return on investment. (Props to you if you can make ROI sound fun!)
Looking for a way to start the conversation? Try these:
- Credible student loan calculator
- PayScale tool: ROI by college and major
- Forbes: How to calculate your college education return on investment
“Are we there yet?”
You’ve got a lot to think about, but no need to stress about it. National Decision Day is an exciting time for you and your kids. No matter what path they choose, the most important thing is that they have you.
And… they have Greenlight! They may be growing up, but that doesn’t mean it’s time to stop helping them make wise money decisions. If you haven’t already, join Greenlight to keep your kids financially-healthy and happy throughout this next chapter of their lives.
From all of us here at Greenlight, I hope you and your family are staying safe and healthy during this time.
In my house, we’ve been doing our best to stay healthy and productive. My 11-year-old son has been trying to get 60 juggles with his soccer ball, shooting baskets, playing video games and somehow fitting in some school work (with a lot of help from my wife Kelly and his teachers). My 16-year-old daughter has been hanging out in a hammock in a tree with her friends who are doing the same thing, six feet away from each other. (This must be a teenager thing?) Our golden retriever has always wanted to come to work with me, and with me working from home, he finally gets his chance. My favorite thing about the current situation: playing a lot of board games with the kids.
As we explore this new way of living life as full-time caregivers, teachers, chefs, entertainers and peacekeepers, I wanted to share a few tricks and resources that have been helping Kelly and I keep our four kids happy, busy and learning – while helping us keep our sanity. 😊
The School of Mom and Dad
For Younger Kids
- Khan Academy – Parent Quick Start Guide
- Jack Hartmann – Learning with songs
- Teach Your Monster to Read
- The Monster at the End of this Book (the book or interactive story app)
For All Kids
Arts & Culture
- Google Arts & Culture (some amazing stuff here!)
We noticed a pileup of cardboard boxes and had our kids use them to create their dream homes. Of course, our daughter built an airplane house, fully equipped with a pool and tennis court. Sky’s the limit, right?
We had the kids illustrate their own short stories – an activity that could last a couple hours or several days, depending on the complexity of the story.
We’ve been encouraging the kids to go outside and play in our yard at least a couple times a day.
Sometimes, my wife Kelly and I crave moments of quiet. We’ve encouraged our kids to dust off their favorite books at least once a day for dedicated quiet time. It breaks up the day, and we all read at the same time.
We’ve been playing a lot of board games with problem solving components to keep the kids engaged and thinking.
What’s been working for you?
Sending best wishes from my family to yours,
Co-Founder & CEO
You did it. You celebrated the birthdays, packed lunches for soccer tournaments and survived the endless conversation about Minecraft. Congratulations, Moms and Dads — you’ve made it through 2019.
As we look toward 2020, allow us to celebrate the unsung heroes of financial literacy – YOU! The hundreds of thousands of Greenlight parents teaching their kids the value of a dollar and the art of making smart trade-off decisions.
In 2019, Greenlight kids did 1.8 million chores and collectively managed more than $150 million. But that’s not all.
Looking toward 2020
In 2020, we’ve got big plans to improve the Greenlight app and add more features for your kids to learn the full-spectrum of money management.
We’ll be weaving more educational layers into the Greenlight app, making it fun (and painless!) for kids to build smart earning, spending, saving and giving habits.
Our team is also building tools for kids to learn all about the world of investing, with a new suite of features that allow kids to invest in multiple funds and even buy fractional shares from their favorite companies.
Our single most important job is to support you – the parents doing the hard work. Together, let’s make 2020 the Year of Financial Literacy.
*Data captured from Greenlight families based on activity from Dec 2018 to Nov 2019. Average monthly spend calculated only for kids who spent.
Guess which topic most parents say is easier to explain to their kids than the birds and the bees, death or politics?
You guessed it: Money. A whopping 77 percent of parents can talk more easily about finances with their kids than they can other challenging topics.
That’s good news on the financial front. It means money isn’t a taboo topic in most U.S. families, according to a new survey by Wakefield Research for Junior Achievement and the Jackson Charitable Foundation. The Children’s Financial Literacy Survey included 500 children, aged seven to 10, and their parents.
Other key survey findings:
- 77 percent of parents believe the best place for kids to learn personal finance basics is at home. Good thing, since only five U.S. states (Alabama, Missouri, Tennessee, Utah and Virginia) require high school students to take one personal finance course in order to graduate, says Champlain College’s Center for Financial Literacy. Eleven states plus the District of Columbia have zero personal finance requirements in their high school curricula.
- Parents think kids should learn about money as young as age five, and by age eight, on average. Many kids begin to start understanding the connection between numbers and money in kindergarten (“Five pennies is the same as a five-cent nickel.”). By age eight, kids may understand that money is exchanged for goods and services (i.e. to buy stuff).
- 92 percent of parents save money—for emergencies, college tuition, and retirement. Good on you, parents! You’ve got the most important savings goals covered. Of course, we don’t know how much the surveyed parents are saving. But hey, any savings amount is a good thing.
- 82 percent of kids earn allowances from parents for doing chores, getting good grades, doing homework and doing good deeds. Learn more about the pros and cons of connecting allowance to these accomplishments.
Of course, all is not rosy when it comes to kids and money. Many of the young survey respondents showed they have a lot left to learn about finances. But hey, the oldest kids surveyed were only 10. They’ve got time:
- 33 percent of the kids surveyed haven’t yet been taught how to get or earn money. Uh oh. Is that a sign that it’s time to talk about extra summer chores for pay, parents?
- 41 percent of kids don’t know how to spend money. Even kids as young as 10 can begin making some simple spending decisions. How about having your kid help pick a birthday gift (with a maximum dollar amount) for a friend? Or choose how to spend their souvenir money during your summer vacation?
- 47 percent of kids haven’t learned how to give money to help people. An easy fix: Many parents use the “three-jar system,” (or some version of it.). They require their kids to split their allowances three ways: Spending, saving and donating. This way, giving money to others becomes an automatic habit. Be sure to let your kids help decide where their donations will go.
- When asked why they think people put money in a bank, only slightly more than half (53 percent) of kids said “saving it so they won’t spend it.” First, banks and credit unions are almost invisible to kids, since parents don’t physically visit branches anymore. You could make a point to drop into your bank or credit union occasionally, or look online for kid-friendly videos like “Roles of a Bank” from CashVille Kidz.Just as important, though, is explaining to your kids how banks, budget categories and savings accounts make it easier for them to separate their spending money from savings.
- Only 25 percent of kids surveyed know you can earn interest on savings. Interest can seem like a tricky topic to explain to kids, for sure. How about sharing this “Schoolhouse Rock” classic to help make the concept clear?
For more about the survey, along with other kids, work and money topics, visit Junior Achievement’s website.
(photo courtesy © Paul Hamilton cc2.0)
This Thursday is the return of the annual “Take Your Daughters and Sons to Work Day.” Although participating in this day seems like it should be a no-brainer, it’s not. Many parents actually are ambivalent about the event.
When this day was created as “Take Your Daughters to Work Day” back in 1992 by Gloria Steinem and her For Women Foundation, the intent was innovative and well-meaning: Encourage more girls to consider professional careers. The day (which is now celebrated on the fourth Thursday in April) was later broadened to include boys/sons.
Some parents now wonder if the day is still necessary or helpful. Why? For one thing, a lot of today’s parents have computer-based jobs that aren’t easy (or as interesting) to show kids. How do you compare computer work to, say, the work of a firefighter or veterinarian?
On the other hand, if you don’t take your kids to your workplace, they may end up doing busy work at school and/or feeling left out of the “fun” while most their classmates are away.
So how do you decide whether to opt in to this career day? Consider a few different criteria:
Are You Prepared?
Blogger Katherine Lewis offers some good basics on how to make this day work well if you’re new to it. Key takeaway: Plan your workload carefully. You won’t get as much done as you hope. And it does pay to think ahead about activities and talk with your boss and colleagues about how to make the day interesting for the kids.
Is Your Child Old Enough to Appreciate the Day?
Washington Post parenting editor Amy Joyce decided a couple of years ago that her kids (then about 5 and 7) weren’t going to participate. As one of Joyce’s colleagues pointed out, many of these days end up with parents and their coworkers desperately trying to come up with ideas to make work seem fun for kids who would otherwise be bored. Are these junior workers getting a realistic idea of what it’s like to work at your company? Probably not.
Does Your Workplace Have an Organized Program?
This is a big one. It’s much easier to make this day work when you have help. Are different departments willing to do “show and tell” presentations to groups of employees’ kids? Will someone offer to arrange a couple of age-appropriate, hands-on activities?
For instance, my husband’s former employer, a catalog/online retailer, arranged for kids to write fun catalog descriptions of a few products and learn a bit about a computer design program. That worked great.
What’s Your Goal?
If you want your younger child just to be able to visualize where you are all day when you’re at work, awesome. However, a quick tour of your office any day—and it doesn’t have to be in April—might be enough in that case.
If you truly want to expose your kids to career options they might not otherwise consider or fully understand, should they go to work with you…or someone else? For instance, I’m pretty sure my younger daughter doesn’t want to be a freelance writer like me. My hope, instead, is to find a friend in software design who’ll let my daughter shadow for a day. And I’m open to it being a day other than the fourth Thursday in April.
Is One Day Enough?
I like this Working Mother writer’s idea that it’s great to extend the career lessons well beyond this single day. Make a point to talk regularly with your kids about job choices that aren’t as obvious as firefighter, veterinarian or whatever you do.
Better yet, look carefully at their natural interests (Minecraft enthusiast = future software game designer?). See if you can connect them with people who can offer some ideas.
After all, sometimes your child’s best first career counselor is you.
(photo courtesy © Brandon Atkinson cc2.0)
When your kid turned six or seven, your household probably started getting visits from that teeny-tiny ambassador known as the Tooth Fairy, or the TF for short. In many cultures, the TF leaves kids money while they sleep in exchange for their baby teeth. Today’s average U.S. rate: $4.61 per tooth. That’s a pretty good return for something so tiny that can’t even be used again!
Fun fact: Apparently, the TF’s going price for teeth correlates with stock market ups and downs. When the stock market does well, the TF pays well. When the market takes a dip, so do the TF’s under-pillow offerings, according to Delta Dental.
The Tooth Fairy Can Leave More Than Just Money
Interestingly, the TF begins leaving money for kids before many of them fully appreciate what those coins and dollars can do. Some kids still intermingle money with their toys—a sure-fire sign that they don’t yet understand money’s value.
Are your kids at this early stage—or would your family just prefer that your kids earn their money rather than have it magically appear under their pillow? If so, the TF is quite open to non-monetary ideas. New York Times columnist Ron Lieber agrees with her that losing teeth shouldn’t always be about the money. Here are some alternatives:
- Tooth certificates: The TF is more than happy to leave your child a special recognition certificate to commemorate a tooth upgrade. If money is still expected, the TF is open to the option of loading reward money on your child’s prepaid debit card.
- Tiny letters: The TF is pretty small, we understand. So it’s pretty cool when she leaves a personalized little letter for your child, honoring his tooth loss. Of course, the TF’s letters are proportionately tiny. Your child may need a magnifying glass to read them. That adds to the fun.
- TF books: What’s the story behind the mysterious dental enthusiast anyway? What does she do with all those teeth? Does the TF do things differently in other countries? She loves leaving kids some great reads to help them with their research.
- Foreign currency: Speaking of other countries, the TF is a global phenom. That means she has access to coins from all around the world. Sometimes she leaves those foreign coins for her gap-toothed friends. She encourages them to start a coin collection, get enthused about future travel and more. She has access to the same kinds of coins you might find at a bank with a foreign currency department, or churches that collect interesting types of coins in their weekly collections—hint, hint.
- Dental supplies: The TF is all about tooth health. So it makes perfect sense that she’d love an excuse to leave your child some fun supplies. Think flavored dental floss, electric toothbrushes bearing images of favorite characters—or even cute little boxes or pouches for future lost teeth.
Whatever gifts the TF leaves, expect to see a bit of fairy dust. The TF is a big fan of leaving bits of glitter behind. That girl knows how to make a grand exit.
(photo courtesy © Michael Bentley cc2.0)
Letting your kid “graduate” from handling cash to carrying a debit card can be a big milestone in a family’s life. After all, handing over that shiny piece of plastic is a signal that your child or teen is moving to a new stage in their financial life.
If you’re still the primary owner on your child’s debit card—which you really should be, as a parent—your child’s financial life is still on training wheels. However, you’re allowing your child or teen to begin making some more independent decisions with their money.
So how do you know if your kid is ready for debit card? First, you know your own child. You’re the best judge of their maturity level and spending habits. However, if you’re a bit on the fence about a child or teen prepaid debit card, here are some good readiness indicators:
1. They’ve successfully handled cash for a year or two.
It’s actually not a great idea to give kids debit cards until they’ve had some hands-on time with cash. Financial expert Dave Ramsey suggests a cash practice period, too. Why? You want proof that your kids fully understand the value of money and the concept that “when it’s gone, it’s gone.”
Kids and teens also need some experience separating actual cash and coins into at least the three basic categories of Spending, Saving and Giving. Using separate jars or envelopes for this task gives kids a visual picture of the budgeting process.
On the other hand, if you let kids start their money lives with debit cards, money may not seem as real to them. Plus, their funds are all lumped together into a single account they think of as “mine to spend.” So be sure give kids and teens a solid cash training period before upgrading them to debit cards.
2. They can keep track of their belongings.
Carrying a debit card is a privilege and a responsibility. Kids who constantly lose things, from their coats to their phones, may not be ready for one. Today’s EMV chips do make it much harder for thieves to use lost/stolen debit cards, since they also need to enter a PIN code to complete transactions. However, who wants the hassle of dealing with a lost debit card?
Wait until you see signs that your kids can keep their valuables safe. However, if your kid does lose a debit card, be sure you know how to quickly “freeze” it so thieves can’t use it. Greenlight makes it easy: Simply log into your mobile app and turn off the card. Then let us know that you need a replacement card.
3. Your kids responsibly handle “school bucks.”
Many schools let you load funds onto kids’ ID cards to pay for school lunches and snacks. Unfortunately, you may already have dealt with that shocking first semester when your middle-schooler drains all their prepaid lunch money by buying extra junk food or feeding their ravenous friends.
This experience isn’t unusual and it doesn’t mean your kid is a financial deadbeat. However, it is a sign that they don’t fully understand the responsibility of having funds attached to a card. So first, talk to your kids about your expectations for how they spend lunch money. And wait on the debit card until your kids prove they can spend their school bucks carefully.
4. Your kids need to be able to make purchases on their own.
For many kids, this is about the same time they get a cell phone. You’re no longer with them 24/7. They’re getting more independent, so you give them a cell phone to get in touch while you’re apart. Entrusting them with a debit card so they can buy a movie ticket or get lunch with friends can also be a nice convenience.
5. Your kids need to buy things that cost more than a latte.
If your teen is doing his own back-to-school shopping, he’s going to need to carry more in his wallet than, say, $5. When your kid starts carrying enough cash that it makes you a bit nervous, that’s the time to consider a special child or teen prepaid debit card. The safety factor alone may be worth it.
6. Your kids start asking questions about debit cards.
Now, no one is implying that kids who show interest in cards automatically are ready for them. However, kids’ questions often are good indicators of changes in their development. A kid who asks about debit cards may be starting to notice how you use your debit card, or may see friends getting debit cards, and be curious.
This is a great time to open the discussion about when and why you will allow them to start using a debit card. Even if your child isn’t quite ready for a card, use this time to show them how you responsibly use your card, how you check your account balances, and to talk about the big difference between debit an credit cards. By the time your kid is ready for a card, they’ll be well versed in how to use it with care.
If you’re ready to teach your kids to be financially independent, check out the Greenlight Debit Card for Kids here to learn more!
(photo courtesy © NASA Goddard cc2.0)
At some point, your child will probably notice that your family is a bit different from others, financially speaking. This can happen whether you’re a family of modest means or your income is way up in the stratosphere. There is always someone else who just has more stuff than you do.
Maybe the families around you have bigger houses, newer cars, glitzier toys, or go on more elaborate vacations than yours. Your child will eventually realize it. Then they may start asking you questions like: “Why don’t we have those cool things and how/when can we get them?”
Kicking the Comparison Habit
First, know that your child isn’t necessarily a materialistic person for asking these kinds of questions. Kids naturally compare. It’s a normal part of their development to wonder who they are in the world and how they fit in.
However, your child is likely to be a happier, more content and more grateful kid if you help them understand that constant comparing can make them cranky. Plus, it’s not always good or necessary to have the same “stuff” that other people have. Here are some ways to discourage your kids from trying to keep up with their friends and neighbors:
- Listen to your own commentary. Do you ever make snarky or wistful remarks in front of your kids about your neighbor’s new SUV or your coworkers’ latest kitchen remodel? The children are listening. Every time you say something that sounds like you wish you had more—or that the belongings and experiences you have aren’t enough—you’re teaching your child to do the same. It may be time to edit yourself.
- Answer kids’ questions. When kids ask why you don’t have a bigger house or fancier car, an honest answer might be: “We certainly could buy a larger house, but this one is just right for us. Plus, we’d rather use the extra money (that a big house) would cost to let you play travel soccer/ visit the grandparents more often/ make sure you have money for college, etc.”
- Consider your children’s peers. It’s awesome that you bought a house in a great neighborhood so your kids can go to a top-notch public school. However, your kids’ social circle may be pretty affluent. Do all of your kid’s peers have designer clothes and expensive shoes? If so, that expectation could rub off your child.
No, you don’t have to move to a different zip code in order to burst your child’s materialistic bubble. However, consider enrolling your child in a scout troop or other activities in another part of town. Your kids may have a chance to meet friends who come from a more diverse range of families. They’ll quickly see that many kids happily get by with a lot fewer luxuries.
- Encourage volunteerism. Teens can serve meals to the homeless or help deliver food to homebound residents. Younger children can go with you to a senior center and play games with residents.
Helping others is a great way to encourage kids to develop an attitude of gratitude. It’s much harder for kids to whine about wanting expensive electronics when they realize that some folks don’t even have enough to eat or can no longer walk without help.
- Let them earn it. There are times when your child may really, really want something that’s a bit more expensive than you would normally buy them. Maybe it’s a certain backpack brand that’s currently popular at school or a smartphone with extra features, just like their friend’s. As long as the purchase doesn’t go against your family values, consider greenlighting it.
However, this is an ideal time to let kids save up and pay for all or part of the item themselves. Why:
- When kids put their own money toward a purchase, they tend to treat their belongings better and appreciate them longer.
- Your child might decide that the gadget just isn’t worth it—even if it’s the “it” item to have at school—if they have to shell out their own dollars.
By the way, you’re not being a mean parent—and you’re not dooming your children to be a social outcast—when you discourage them from comparing their “stuff” to others. You’re actually teaching your kids to be content and appreciative about the things that really matter.
(photo courtesy © Zack Weinberg cc2.0)
We know what you’re thinking: A kid who saves too much? Is there really such a thing? And can that truly be a problem?
Believe it or not, yes, yes and yes.
Most kids probably are in the opposite camp: they’re more than happy to spend every penny they can get their hands on. And if they do save, it’s probably a modest amount. Most likely they’re saving up for something they want to buy later.
However, a small number of kids are extreme about saving money. Parents who have an over-saver know exactly what we’re talking about, and raising them isn’t always a picnic. A few of these kids are natural-born tightwads. Others may have heard family members argue or worry about money. Anxiety about “having enough” can lead these kids to hoard away every cent of their allowance and earnings—just in case.
Why over-saving can backfire
Now, don’t misunderstand: Saving money is an awesome habit. In fact, it’s a critical part of becoming a financially responsible person. However, if saving is the only thing your child does with money, their financial life can get out of balance.
The long-term result: Your kid may carry their over-saving pattern into adulthood. Adult over-savers argue with their spouses or partners over even the smallest purchases. And when an extreme saver needs to make a significant purchase, like a car or a house—watch out! They may get paralyzed by the decision or become overly anxious after writing a big check or signing for a loan.
How to teach kids financial balance
If you’ve got a budding money-hoarder in your family, now’s the time to teach them how to loosen up. (Their future friends and families will thank you!). Here’s how to start:
- Create a beginner’s budget. Budgeting actually is a very calming tool for anxious over-savers. Here’s why: Once kids put money into categories (envelopes, jars, or digital) for specific purposes—friends’ gifts, saving for an electronic item, etc.—that money is “protected.” Your child can now feel comfortable with any leftover money. It’s safe to spend.
- Encourage the “small splurge.” Make this a family ritual so it takes the choice (and associated stress) out of this for kids: Whenever your child gets extra birthday cash or a special check from the grandparents, teach your kid that they are supposed to spend a little of it right away. You can tell them it’s part of showing gratitude for the gift.
Have your child take 10% of the money ($2 out of a $20 gift, for instance) and buy an inexpensive toy or food treat. The amount is small enough that even extreme savers will feel OK spending it.
- Teach them to give. The donating habit is an important one for all kids, but especially for extreme savers. How much or how often is a family choice.
Be sure you help your child separate their “giving” money from their other funds. Keep donation dollars in a special container or a digital category. Setting the money aside this way and adding the label “Donating” or “Giving” helps kids psychologically separate themselves from it. Later, it’ll be a little easier for them to let go of this green.
Again, it’s definitely important to teach kids to save. However, children also need to learn this: Part of having a healthy relationship with money is being able to let go of it responsibly, too.
(photo courtesy © Tauno Tõhk cc2.0)