By Eric Braun and Sandy Donovan, coauthors of The Survival Guide for Money Smarts: Earn, Save, Spend, Give

Some kids are naturally attracted to money and all that it represents—all the power it holds, all its trappings. We have a nephew who, at age eight, had several wallets, a travel money pouch, a savings bank in his room, and aspirations to open his own business. He talked his parents into helping him open a savings account, and for light chitchat, he grilled them with questions about interest rates and investing. It was a cute character trait, to be sure, but as he got older, it was more than that. He developed a solid understanding of financial literacy, or money smarts: how to be deliberate and wise in your choices about earning, saving, spending, and donating. How to plan for the future, even though future may seem more like a word grown-ups use than a real thing a kid will ever have to deal with.

He’s got a head start over a lot of kids. More commonly, kids “get” the importance of money smarts, but they don’t tend to have a lot of curiosity about managing a budget or setting financial goals. But we know that a lack of financial literacy leads to myriad poor financial decisions and lifelong consequences. So how can we encourage the young people we love to be more attentive to financial risks and responsibilities?

First: Start them young. School-age kids can begin to learn important concepts such as how to open and balance bank accounts, the power of interest, and the importance of saving. They can compare prices on products and help you make spending decisions. Beyond that, we can work to make money smarts a bit more fun. Here are a few ways to do that.

Allowance Apps
Giving kids an allowance helps them learn how to spend and save money—and form solid financial habits. But of course, these days many of us don’t have much cash on hand. We pay for just about everything with a card, a phone, or an online transaction. When allowance day rolls around, we often find ourselves saying, “Sorry, kids, I don’t have any money. I’ll have to owe you.”

That doesn’t teach kids anything about managing money, even if you follow through by forking over a lump sum every month or two. They need to see money coming in every week and make decisions about how they use it (and don’t use it). Probably we’re not all going to start carrying cash again anytime soon, so instead, use an app to give kids money each week and start instilling money skills. Most kids love to be on phones and tablets; this allows you to sneak in a little healthy stuff with the games and social media (sort of like slipping zucchini into the brownies).

Allowance apps such as ThreeJars, RoosterMoney, Bankaroo, and FamZoo provide an account for each kid in your family. Most of these act like a virtual bank account where you are the bank. You can program a weekly allowance for each child, which will be automatically added to his or her total. Anytime kids buy something with your money—say you pay for an art pad and pens while you’re at the big box store or you rent a movie online using your credit card—you can delete the cost from their virtual accounts. And they can make withdrawals whenever they like (or at your discretion); you pay them what they withdraw, then subtract it from their accounts. Kids can track their credits and debits in the app on their own devices or a shared device, such as a family computer. They have their own passwords and can see only their own accounts. When my boys were younger, we used Allowance Manager and found it fun and easy to use.

Most of these apps are free or low cost, but many come with the option to connect to real bank accounts or get a real debit card for your older, more responsible kids. You transfer money into it electronically from your bank account, and kids have more freedom to spend using the card—including online spending. These options require a bigger monthly fee, but they can really up the interest factor for kids.

Games
Green$treets: Unleash the Loot! is an iOS fantasy game in which kids ages five to eight play with a variety of characters, “each with their own unique financial and ecological personalities.” The adventure has kids doing tasks to earn and save money in order to rescue endangered animals. As kids make progress toward their goals, they learn financial concepts. Sit with them as they play and have conversations about their choices and what they’re learning.

Presented in a game-show format hosted by the “Money Savvy Pig,” Savings Spree takes kids through six rounds to test—and teach—financial concepts, starting with earning money, setting and meeting financial goals, and showing “how the choices they make each day can add up to big savings or big expenses, depending on how they decide to spend (or not spend) their money.” It’s for ages seven and up.

Playing games with kids is a great way to bond with and help them improve their social-emotional skills. (According to the American Academy of Pediatrics, the many benefits of play include a “deep connection that develops when parents engage with their children.”) So if you want to skip the screens and interact more directly with kids, you can always play a pretend investing game using real-world stocks. Kids research, choose, pretend to buy, and then track their stocks over a period of time. Check in after a couple of weeks to see how everyone did. We wrote in more depth about this here.

Invite Them into the Process
For kids, one thing that can be more fun—and more rewarding—than screen time or game time is family time. Face-to-face, real-life interactions mean so much to them and to us. You can get some of that relationship-building goodness and help kids grasp important financial concepts by making them a partner in your real-life financial decisions.

For example, ask for help choosing groceries. When you’re at the store, compare two similar products and ask kids to help you make a purchasing decision. Ask lots of questions and let them lead you toward a decision: What do you value in these products? (Flavor? Natural ingredients? Price?) What do you think are the reasons for the difference in price? What brand do you usually buy? Is it time to change? If you get the less-expensive one, will you have more money for something else the child might want?

Kids hardly think about that card swipe at the store (heck, neither do many of us grown-ups), so that money isn’t real to them. But if you walk them through budgeting, choosing products, and looking at the total you spent compared to that budget, it brings it home. Talk about things you have to do without in order to get the things you need.

Here’s a fun thing a friend of ours did when she had a minivan-load full of young kids and needed to get gas. After pulling up to the pump, she asked everyone to guess how much money it would cost to fill up. The kids’ guesses ranged from $1 to $8, and they were pretty shocked when the real total was more than $40. It was just a small moment, but it got those kids thinking about money and buying choices in a way they never had before. Look for opportunities to engage kids in everyday money moments like this.

Finally, you can do what our nephew’s parents did and open an account for your child. There is no minimum age for kids who want to open a joint savings account with an adult, which means you can do it any time, no matter your child’s age. Getting a real account will engage many kids, especially if you make a point of checking the balance with them online and making note of how the savings grow after deposits. As for checking accounts, different banks and credit unions have different rules, but you can usually open a joint account with a teenager. Then kids can have debit cards to make their own purchases, including online. Be sure to coach them closely, and keep tabs on their spending.

The best part about getting kids interested in money in fun ways—besides the fact that the skills they’re learning will help them the rest of their lives—is that you get to be a part of the process with them.

Bonus! Download Keep a Budget, a free printable worksheet from The Survival Guide for Money Smarts. Use the form with kids to help them create a budget and stay on track.

Eric Braun writes and edits books for readers of all ages, specializing in academic and social-emotional topics. Books he has worked on have won awards and honors, including the Eugene M. Emme Astronautical Literature Award, a Foreword Book of the Year Gold Award, a Benjamin Franklin Award, and many others. A recent McKnight Artist Fellow and an Aspen Summer Words scholar for his fiction, he earned an M.F.A. in creative writing from Minnesota State University, Mankato. He lives in Minneapolis with his wife and two sons.

Sandy Donovan has written nonfiction books for kids and young adults on topics including economics, history, science, and pop stars. She has worked as a journalist, a workforce policy analyst, and a website developer. She currently works for the US Department of Labor, developing online tools to help people of all ages meet their career, education, and employment goals. She holds a bachelor’s degree in journalism and a master’s degree in labor and public policy. She lives in Minneapolis with her husband and two sons.

Eric and Sandy are coauthors of The Survival Guide for Money Smarts: Earn, Save, Spend, Give.

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