Cashless transactions, cryptocurrencies and Venmo transfers are the realities for children born in the digital age. But when it comes to teaching kids about money, those new methodologies of payment don’t change the reality that financial stability matters. Healthy money relationships begin with piggy banks, good habits and open discussions about earning, saving and growing money.
The Oklahoma Council on Economic Education (OCEE) provides teachers with personal financial literacy training and economics resources to support Oklahoma’s Passport to Financial Literacy. Schools in Oklahoma present 14 core standards to students in grades 7 through 12, all of which are required for graduation, including topics like earning an income, savings and investments, insurance, buying a home and retirement.
While parents will see these standards integrated into their kids’ courses in grades 7 through 12, home is where money literacy is modeled and taught. Local experts provided the following tips and conversation starters to help parents talk about money at every age and stage.
Conversation starters for families
For kids in grades K through 8:
- Address economics and financial literacy through needs and wants.
- Kids in kindergarten through 8th grade are naturally inquisitive, and parents can use that trait to their advantage to reinforce financial responsibility at home.
- During early childhood, the period between birth and 8 years of age, kids begin to recognize that they need money to buy things. Parents can discuss where money comes from, how to save resources and how to keep money safe.
- Demonstrate the simplicity of the conversation: “Don’t eat all the cookies now because we want to save some for tomorrow,” recommends OCEE Executive Director Amy Lee.
- Middle school parents can incorporate finances into their child’s daily activities. Challenge their decision-making process and discuss needs versus wants. Ask budgeting questions and use gaming currency like Robux and Minecoins as examples to engage.
- Parents can also help middle schoolers develop interpersonal skills that attract success, such as self-confidence, communication, empathy and other life skills that lead to more informed choices.
For high school students:
- Tell them — and then show them — how to be fiscally responsible.
- “As kids get closer to graduating, they start to ask, ‘Well, how do I do that?’” explains Brenda Beymer-Chapman, J.D., director of social studies education for the Oklahoma State Department of Education (OSDE).
- A recent Survey of the States study by the Council for Economic Education found that high school students who were required to receive personal finance instruction were more likely to make smarter decisions about paying for college, more likely to choose less expensive financing options and less likely to carry credit card balances.
- Parents can create healthy money habits and demonstrate money as a tool through dialogue. Seek conversations that encourage kids to give thought to the benefits and costs of their choices: Can I buy whatever I want with my debit card? How should I D.I.S.S. (donate, invest, spend or save) my money?
- According to MidFirst Bank, it is easy for a child to see a parent spend, harder to see a parent save and nearly impossible to see what a parent didn’t spend. Model that process for your high schooler. As one of their earliest role models, Beymer-Chapman recommends parents support classroom learning about finances by showing children the family budget, where you bank, the types of accounts held and where you invest.
- Certified financial planner Cory Moore suggests a spotlight on investments to teach lessons on consumerism and ownership. Ask: How much did your Nikes cost? $100 or more? Then explain that to own a share of Nike stock is about $100, too. Moore uses this demonstration, Buy a Pair, Buy a Share™, to teach students that owning is almost always cheaper than consuming.
The digital dollar
Ten years ago, cash was the common form of payment. Now, Lee says, it is rare.
“There has been a tremendous change in how we look at finances and manage them — even [from] 10 years ago,” recounts Lee. “This poses extra challenges teaching in the classroom and at home.”
Nearly 60 percent of parents have come across useful parenting information on social media, according to the Pew Research Center, including a mix of interactive games, videos and other multimedia that will open the door for conversation and skills-building about finances.
During gaming, pay attention to how your child approaches decision-making and which decisions seem easier for them than others. Incorporate tangible tools like Greenlight, a debit card for kids and teens that rewards good money habits, to increase their comfort with cashless transactions. Ask which medium they prefer using and discuss what that means.
A potentially uncomfortable topic for parents is credit, including everything tied to a credit score, such as interest rates and rent history. A parent struggling to understand what hurts or helps a credit score will struggle to teach their kids. Local banks and credit unions offer online financial literacy tools for adults that can aid in this process.
Both Beymer-Chapman and Lee played an integral role in strengthening the Passport to Financial Literacy Act. Oklahoma is one of several states requiring basic competency of 14 financial literacy standards as part of high school graduation requirements, so we should be one of the strongest in the nation.
Unfortunately, according to OCEE, Oklahoma students ages 15 to 18 average 57 percent on a financial literacy test designed to measure their ability to earn, save and grow their money. Young people ages 18 to 21 say debt is their biggest financial concern.
The challenge administrators face is a strain on resources in our schools. The courses are either being absorbed into existing government, history and economics classes or they are delivered via online programs. The biggest gaps are consistency in how the subject is being taught, according to Lee. Parents can engage in this process by asking school administrators how personal finance is being taught in your child’s school.
The digital age has presented new challenges, but the changing realm of financial literacy is one where parents can contribute to the solution. Instead of focusing on the concept “Do as I say and not as I do,” parents can seek opportunities to foster healthy money habits with kids and influence them through better money moves.
Core standards taught to 7th through 12th-grade students through Oklahoma’s Passport to Financial Literacy program:
- Earning an income
- State and federal taxes
- Banking and financial services
- Managing a bank account
- Savings and investing
- Understanding the Free Application for Federal Student Aid (FAFSA), loans and borrowing money, including predatory lending and payday loans
- Understanding interest, credit card debt and online commerce
- Identity fraud and theft
- Renting or buying a home
- Understanding the financial impact and consequences of gambling
- Charitable giving
- Podcast Episode 17: Act Your Wag with Rachel Cruze of “We’re Going There with Bianca Juarez Olthoff”
- What is a 401(k) plan? by QuickBooks
For Parents and Kids Grades K-5
- Interactive games Financial Fables by Federal Reserve Bank of Kansas City
- On-demand workshop Teach Your Child To Become a Millionaire, for ages 10 and under
For Parents and Kids Grades 4-6
- Interactive games Jay Starts a Business by Federal Reserve Bank of Kansas City
- Short videos Money Moments: Financial Education by KSPS and the Spokane Teachers Credit Union
For Parents and Kids Grades 7-8
- On-demand workshop Teach Your Child To Become a Millionaire for ages 11-18
- Interactive games Bank It Or Bust by The Citi Collection for Financial Capability
- The Financial Times’ The Uber Game by Next Gen Personal Finance
For Parents and Kids Grades 9-12