Along with the annual tax filing deadline, April is National Financial Literacy Month, making it an ideal time to talk to kids about money skills. It’s an important conversation; according to a survey from the National Financial Educators Council, financial illiteracy cost Americans more than $415 billion in 2020.
One handy tool to teach kids about money is the BusyKid app, busykid.com, which combines the age-old notion of household chores with a modern-day twist. The app allows parents to allot and pay for age-appropriate chores and allowances. Kids can then spend, donate, save and invest their money, including donating to charities and investing in real-world stocks.
Certified financial planner and BusyKid creator Gregg Murset offers tips on what parents can teach kids about personal finance, especially during the COVID era.
Each time your child earns an allowance or receives money as a gift, try targeting 50 percent for spending, 30 percent for saving, 10 percent for investing, and 10 percent for charitable donations.
Money Is Dirty
COVID-19 helped us realize the germs that are spread through actual dollars and cents. Money can carry viruses and bacteria, so spend some time moving your child toward technology, which provides touchless paying, online shopping, and secure debit/credit cards.
Save for Emergencies; Invest for the Future
One study from the Federal Reserve shows that many Americans have less than $400 in savings, clearly not enough to cover an emergency like what happened when the world shut down a year ago. Show your kids how to open a savings account, and make a plan to add to it. This will serve as a “rainy day fund” to provide peace of mind as well as a reminder of how they can invest to grow financially.