What a Junior Achievement Survey Tells Us About Kids, Parents and Money

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)

What your middle schooler should know about money

Going off to middle school is a big milestone — for your kids AND for you. No doubt, your kids will have more freedom. They may not need as much help with homework, and they may even ditch a few family movie nights to see their friends. 

But it’s a great time in their lives. They’re growing up, learning about themselves and starting to form their own opinions about the world. While they enjoy these new privileges, it’s still important to help them learn valuable life lessons — starting with money.

Opportunities to earn 

Middle school is a great age to start earning money [1]. How? Chores, babysitting, yard work, dog-walking, the list goes on. Get creative with it!

When your kids are earning money, they begin to understand what it means to spend it. They grasp the idea that money really doesn’t grow on trees — it comes from hard work. A great way to teach this is by giving them chores and allowance (you can find these in your Greenlight app!). 

Help them manage their spending

Middle schoolers are busier than ever before, and they’re enjoying their independence. When they head out to the movies or spend the night at a friend’s house, it’s important that you’re there with them… without physically being there. 

Greenlight lets you keep track of their spending habits directly from your phone. When they’re spending too much at a certain store, you can add spending controls. Or when they’re not saving enough, incentivize them with Parent-Paid Interest

Talk about saving vs. spending 

As your kids grow up, they may start to have more “wants.” Use this as a chance to talk about saving vs. spending. 

We recommend a “show, don’t tell” approach. Show them what happens when you save money over time. Nice car? Nest egg for college? Hoverboard? A healthy savings account will get them there! 

Understanding costs

When kids are young, they don’t always understand how much life costs. As you know, it can be… well, expensive. Not sure how to prepare them? Start here: 

  • The next time you’re grocery shopping, point out certain brands that are more expensive than others. See what they say! 
  • Tell them about variable expenses and fixed expenses [2]. For example, your car payment is a fixed expense — you know it’s the same every month, so you can budget around it. But a nice dinner out? That will vary depending on the restaurant, and we call that a variable expense. 
  • Show them the utility bill (fun, right?). Some people are shocked when they get their first utility bill. Do your kids a favor now and help them learn what drives the cost up or down — they’ll thank you later!

Keep the conversation going 

Your kids will still be under your roof for a while, so don’t let the conversation drop after middle school. Their understanding of money will evolve and so will your conversations. And when you hit a roadblock, you can always count on Greenlight to help you out!


[1] Money Talks News , [2] US News

What high school graduates should know about finances

You’ve made it to the finish line. After diplomas, passed tests and signed acceptance letters, it’s finally starting to feel real. 

If you’re scrambling at the last minute to send your kids off with all the knowledge and tips they need for the real world, take a breather. We have a step-by-step guide for raising financially-smart high school graduates.

The basics 

No matter what financial background they have or career path they choose, there are some basics that every high school senior should know before college. 

  • Credit vs. debit. Once they’re 18, they can get their own credit card. Here’s the thing: they have to be able to prove their independent income or have a co-signer (probably you!). Talk about credit vs. debit to decide if this is the right time for them. 
  • Everything costs money. Teach your kids how to budget and monitor their spending regularly so they don’t find themselves in a bad situation.
  • Wants vs. needs. For some kids, this is the first time they’ll be paying for gas on their own. For others, college loans are about to start piling up. Take this as a teaching moment to explain why needs should always come before wants.

Return on investment 

Whether they’re picking a major or starting their own business, an important lesson is return on investment. Start with something like, “What you do now affects what you do later. If you decide to push off your mandatory classes, you may wind up in college longer than you wanted to.” You can also use a calculator to figure out the ROI for a major or minor [1]. 

Keep communication open 

Just because they’re leaving home doesn’t mean they’re all alone — remind them of this. They have you and they have us. Setting the stage for strong communication is really important! 

Let Greenlight help 

Family finance, big decisions, money management… it’s kinda our thing. They may not be right down the hallway from you anymore, but you can use your app to stay connected and keep up the financial learnings. 

Or, send them a nice Greenlight Gift to let them know you’re thinking of them. With all of this help, they can handle anything that comes their way! 

[1] PayScale