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Financial Literacy: The Gift that Keeps Giving

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During this month of holidays in which gift-giving is the norm, monetary gifts can be the most meaningful. Gifts of money offer your child choices: Save. Spend. Give. Invest. They’re all great options, and your child’s financial literacy will grow with your support. I call that a gift that keeps on giving.

You might feel your child is too young to learn about money firsthand, but the perfect time to start teaching is once kids reach school age.

State Funds for Literacy Education

Being able to understand and effectively use financial skills is so essential to creating better financial futures for children, teens, and young adults that State Superintendent of Public Instruction Tony Thurmond recently announced the availability of $3.6 billion in block grants that can be used to expand financial literacy course offerings and an additional $1.4 million in private funding for high school teachers to receive related professional development. The hope is that the next generation of consumers will be more financially savvy.

As a parent of young teens, I’m thrilled about this. I want my kids to have the best quality of life possible and to learn that how they manage their money is a big part of this. It’s important to me that they develop a healthy relationship with money and can plan for large expenses, make wise spending decisions, manage debt, and grow their assets.

I’m fortunate that I feel equipped to teach my kids effectively, but that might not be the case for all parents. You might be relieved that the California Department of Education has stepped in with funding for financial literacy and that it’s working toward joining other states requiring such a curriculum. The only related requirement in California is that high school students take one semester of economics.

Real World Experience

Kids need real-life, hands-on experiences with money to learn how to manage it, and teaching money management and budgeting habits takes time, experience, consistency, and patience. Empowering them with opportunities to make decisions gives them confidence and helps shape their attitudes about money and behaviors related to spending, saving, and giving.

Being a parent puts you in a prime position to model healthy habits and attitudes about money and provide opportunities for your kids to earn, learn, and demonstrate their understanding of using it responsibly.

A good goal is to have your child be comfortable talking about money while giving them some basic knowledge they can build on, along with tools and resources for learning more. And, for their best chances of success, they need a working knowledge of handling finances long before they leave the nest.

Allowance or Paying for Chores?

Offer an allowance for chores around the house or cleaning one’s room. If that doesn’t sit well with you, consider paying your child for special projects or asking them for ideas of how they could earn money. They’re more likely to stay engaged if they have a say. Have your child think about short- and long-term goals and divide earnings for saving, giving, and spending.

Whenever you can, have them conduct transactions for the things they want in cash with money they earned or received as a gift. Ask them to keep receipts and add up purchases weekly so they can reflect on their choices.

Skills for Each Age Group

Kindergarteners can learn to identify coins, their value, and count money. Teens can understand creating a budget and using checks, cash, and credit cards to buy things they want and pay bills. If you run out of ideas for building your child’s financial literacy, look at a financial glossary and choose terms that make sense to introduce according to your child’s age.

Depending on your child’s interest, the teen years are a perfect time to introduce more complex concepts such as earning or accumulating interest and the differences between bank accounts and brokerage accounts. If you don’t feel confident in this area, learn together. Research types of investments and how they can earn income from dividends and capital gains, for example.

Tools for Parents

You’ll find tools, guidance, and youth-centered resources for children in Kinder through 12th grade on the California Department of Education websites, banks, and brokerage firms. These include articles about saving and investing, apps, games, podcasts, and challenges and competitions. Your teen might even enjoy a subscription to Money magazine or a book for youth about finances.

Whatever methods you choose for teaching financial literacy, be assured that this is one investment you can count on to pay off.

WENDY J. ROSENTHAL is a writer, credentialed educator and tutor, and solopreneur of a boutique marketing company. She is certified in Youth Mental Health First Aid and is the parent of two teen boys. She and her children reside in Salinas with their rescue pup Sherman.

Helping Kids Learn About Money

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Recently, I was in a grocery store for the third time that day, engaged in a game of “Never Ending Shopping List” courtesy of my significant other, when I encountered a common scenario in the toy aisle. A young tyke of about four was planted firmly, going back and forth with an older lady as he clutched the plastic case of an action figure. From the furrowed brow of the youngster, it was clear that things weren’t going his way. As I neared, I overheard a bit of the exchange.

“But grandma, why not!?!”

“Because, I said not today.”

“But I want it! I have my own money!”

“You don’t have enough — remember when you spent some last weekend?”

The child scowled for a moment, then threw the final Hail Mary. “Can’t you let me borrow some?”

As I scooted past the standoff, my mind wandered back to my own childhood, the idea of money, and how we first learn to interact with it.

Understanding the ins and outs of finances can be tough for everyone at one time or another, especially for our little ones. Mastering money is a tricky prospect for many kids because of the amount of mental math and reasoning that is typically involved. Children first have to understand the price, then remember the value of given coins and bills (an extra step beyond a simple, regular addition or subtraction problem), then arrive at a final understanding. While it becomes second nature, it can initially be a lot for younger children to comprehend. Additionally, the increasing use of less tangible methods of payment — debit cards, for instance — can make learning the foundations of currency even more challenging.

Whether your child is just beginning to learn about money, or you’re helping your older kids learn how to budget, here are a few games and tricks you can use to help them understand the true value of a dollar.

COMMON BOARD GAMES

Buy It Right (Ages 5-9+)

This game is popular among teachers and homeschoolers alike and is a great all-purpose game to learn and reinforce fundamental math and decimal skills. The game focuses on basics like bill and coin denomination and recognition, equivalency, and calculation. The object of the game is for players to attempt to be the first to obtain different items in their cart based on color, cost, and their current budget. The game includes a kid-friendly calculator and is a terrific precursor to some of the more advanced currency games on the market.

Money Bags (Ages 7+)

Perfect for helping your child who struggles with coin counting, Money Bags uses spinners and dice to help kids “earn” and calculate money with each turn. The object of the game is simple: the player with the most money at the end of the game wins, hopefully avoiding various money-sucking pitfalls along the way. Bills and coins are exceptionally realistic, which makes this game great for reinforcing interactions involving real money.

Monopoly (Ages 8+)

Yeah, you saw this one coming a mile away. And for good reason. Since it’s inception by Parker Brothers in 1935, Monopoly has given kids and adults alike entertaining practice in the basics of saving, purchasing, and investing with a dose of fortune thrown in for good measure. With multiple editions based on age, theme, and other characteristics, this old standard should be on everyone’s shelf.

The Stock Exchange Game (Ages 11+)

For older kids who want to learn the power of investing early, this game is a great option. Similar to Monopoly in some respects, the game involves multiple laps around the board with each cycle representing a year in the player’s life. Players experiment with different strategies to increase their net wealth through various forms of investment, such as stock options. The game focuses on management strategies versus heavy math, and therefore has a less “educational” feel. There are multiple options for play depending on age, and the player with the most money at the end of the game wins.

ADDITIONAL APPROACHES

In education, the concept of compartmentalization is commonly present in some form when a child struggles with material, whether mathematical or otherwise. Simply put, kids can understand or perform a skill in a strict context — such as accurately solving addition problems on a worksheet —  but fail to reproduce the same results elsewhere, such as in a real-world situation. For example, a child might be able to tell you which character in a game has more money, but be stumped when asked if they can afford a toy a few days later during a trip to the mall. Simply put, they can’t consistently apply what they have learned.

There are several ways to address this issue, but they all center on explicitly pointing out connections between what a child already knows and what they are trying to do. It sounds simple, but can be tricky in practice. A good way to start is through casual exposure outside a formal teaching environment. Try some of the following approaches to help reinforce what they have learned through games and other avenues.

  • Keep A Change Bin. This is a great way to regularly expose younger kids to coins and their denominations. At the end of each week, shopping trip, etc. empty all coins into a central location or container, such as a glass jar. Have your child help you count the value of the coins as you put them into the container, and remind them that the coins are the same as they have seen in the board games you play together.

  • Try Using a Household Money System. Give your child the change to earn and spend household money based on daily chores, allowances, etc. This will help with motivation and reinforce the concepts of spending and budgeting.

  • Involve Them in Planning. Decide on a set overall cost, and let your child choose a weekly meal that requires individual ingredients. Then, figure out the cost of ingredients together.

  • Give It Time. Remember that kids develop at different rates, and understanding money is the same as countless other topics — sometimes things need a bit of time to sink in to a child’s consciousness.


Originally from New England, Matt Desenberg is a writer living in Monterey.

Parenthood with a Side Gig

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It’s a wonder more of us aren’t generating millions with the number of money-making schemes revealed by a simple “side gigs” search. Online promises aside, side gigs require commitment, time, and preparation.

The side job (or hustle, project, gig, or venture) has been around for decades, with the term moonlighting coined in the 1950s to indicate a second job performed during non-traditional working hours. Jennifer Nahrgang, professor of management and entrepreneurship at the University of Iowa and a Palmer professor at the Tippie College of Business, says technology has made it easier and improved access for people to participate in the side hustle culture (think Uber, Airbnb, Etsy, and the like).

While the gig economy has its critics, it’s attractive to moms for its flexibility and autonomy. Nahrgang interviewed a gig worker who, due to health issues, could only work on days she felt well. A side gig versus traditional employment allowed her to do that.

And though making money is obvious incentive for a side gig, it’s not the sole objective nor even the primary motivator for many of the moms we surveyed. Most gig workers are seeking to be free agents or casual supplemental earners (30 to 40 percent), while a smaller percentage chooses gig work out of necessity (14 to 16 percent) based on a 2016 report from McKinsey Global Institute.

Still, as satisfied as gig workers are with their work arrangements, financial volatility is a  downside. How can you ensure your side gig is a success? Nahrgang was part of a small research team whose results of a study of 337 full-time employees with side hustles were recently published in the Academy of Management Journal (Vol. 64, No. 1, 2021). In addition to her expertise, we surveyed more than a dozen moms to glean the best side-gig practices for parents.

1. Know your motivations. What do you hope to gain besides cash? New skills? A creative outlet? A larger network of colleagues and friends? It’s helpful to know your motivations — it’s empowering, Nahrgang says.

Samantha Peterson’s cookie decorating hobby during COVID quickly turned side hustle. A mother of three girls ages 5 to 16, Peterson found herself sometimes lonely and without purpose, even with a part-time position as a court clerk. “I thought if I could make extra money doing what I’m passionate about, it would be a win-win,” she says.

Laura Luidahl, also a baker was seeking a creative outlet when money and time were tight and her kids were preschoolers. Baking filled that gap, plus ingredients counted as grocery money. Her boys are now 16 and 13 and her side gig is a full-time venture. “The fact that people were willing to pay me to bake for them was ‘icing on the cake’ for me,” she laughs.

2. Do your research. Once you’ve nailed your motivations, look for the sweet spot where those motivations and your passions, talents, and available time intersect. Will you provide a service? Utilize an app such as Uber? Or rely on a capital platform such as Etsy or Airbnb?

Consider the things you do every day that might have income opportunities attached. As a mystery shopper, you may need to check prices, take photos of displays, or conduct customer service checks. Is there a store you visit regularly seeking these services?

For 11 years, Lindsay Moe has found synergy with family life as a food blogger at The Live-In Kitchen (easily customized vegetarian recipes). “Food blogging incorporates beautifully into parenting,” Moe says. “With four kids at home I always have plenty of interesting food on hand for them to enjoy or expand their palettes. I can cook and photograph something during the day and serve it for dinner in the evening.”

Next, read the small print, Nahrgang says. Some opportunities are strict in their procedures and you must follow them to a T in order to be paid.

If you’re considering a direct sales company, such as Avon, Pampered Chef, Tupperware, or Norwex, be clear about what you’re purchasing if there are fees for enrollment or initial kits, says direct-sales veteran, Rita Koch-Thometz. In addition, Nahrgang advises not to invest anything beyond what you’re willing to lose. Watch for pyramid schemes. Know and understand minimum sales expectations. And beware of being lulled into more inventory than you need by company incentives.

Be honest with yourself about whether you plan to treat the venture as a business, hobby, or simply a personal discount, Koch-Thometz says. Rachel Truax, mother of four, admits she initially became a Norwex consultant seven years ago for discounts on her purchases. Extra money from sales to others was just an added bonus until the pandemic hit and she found herself not only in need of income, but offering products especially appealing during COVID.

“If you want it to thrive as a business, you must treat it as a business,” Koch-Thometz says.

Share your plans and goals with your family, she adds, who are much more likely to encourage and support you if they are included and informed.

3. Be strategic. Nahrgang says the most successful folks at side gigs are strategic. They consider not just how much they’re earning but the amount of time it takes to make that money and at what expense. They shop the available opportunities (and sometimes take advantage of more than one, such as Uber and Lyft) and consider how they’ll get paid, Nahrgang says. And they know when they can maximize making money, whether it’s certain hours of the day or times of the year.

Strategizing can have a significant impact on the bottom line for a side gig. One driver Nahrgang interviewed drove for two major companies, each offering incentives. The driver Nahrgang spoke with would carefully consider whether those incentives truly added value. For example, she might make more in tips on multiple short trips over the one long trip the company incentivized.

4. Set boundaries. Because the nature of side gigs provides few boundaries, the most successful set limits for when or how they’ll work, Nahrgang says.

Kelsey Lyons holds a stressful full-time position as a nurse. The mother of two boys ages 15 and 16, Lyons was previously a massage therapist and wood-burning artist, which have now become relaxing side gigs. “It’s so calming to be in an environment that’s so different than my ‘real’ job,” Lyons says. “I don’t push my art or push my body to do more massages than I want to do. It’s got to be something you can manage and not create more stress. And time management is key.”

You can also set boundaries financially. Luidahl of Laura’s Baking Delights suggests setting up a separate bank account early on. Deposit side-gig sales into that account and purchase your supplies from it so you always have an accurate reflection of your income and expenses.

Support, whether it’s from your family or a Facebook group such as Side Hustle Nation, can help you keep your boundaries and priorities.

5. Feel the power, find the joy. Side gigs can make you more confident about your full-time work and parenthood, Nahrgang says. In reviewing responses from the moms we surveyed, their passion is contagious.

One social worker and mother became a wedding officiant when gay marriage was legalized in New York in 2011. “I just wanted to be part of that joy,” Lauren Gourley of NYweddingsbylauren.com says. “I’ve officiated about 100 weddings at this point, some for dear friends but mostly for complete strangers.”

Kristy Honaker, mother of two boys ages 11 and 18 months, has devoted herself to improving health and her side gig reflects that passion. Hona Goods utilizes herbs, plants, flowers, and produce from her home garden to create edible and wellness products, such as a lavender salve to soothe sore muscles.

Lastly, own your side gig. “Make it work for you,” Truax says. “The perk of a side gig is you make it work for your own life.”

Lissa Carlson found it humorous that her side gig this month is writing about side gigs.

Adulting 101: Get your finances in order!

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Adulting, according to the dictionary is to “behave in a way characteristic of a responsible adult, especially by accomplishing mundane but necessary tasks.” It’s a word made popular by Millenials and means handling daily tasks like cooking your meals, maintaining the car, and managing your own money. Most people take on these tasks as a normal course of moving from adolescence to adulthood, and yes, parenthood accelerates having to address these necessary tasks. Even though I’m well into adulthood, one task of adulting remained unaddressed for me: making a will.

Some of you may think that making a will is somehow morbid – thinking about what will happen when you die or an advanced directive of what wishes you have if you become medically incapacitated. It isn’t. Making these plans is not only an adult thing to do, but it is also an aspect of caring for your children that can avoid a lot of turmoil when stress is high. As a dad, I currently am the primary earner and have our benefits through my work, which means my death would have a significant impact on how my wife and daughter could afford to stay in the area.

My wife and I didn’t jump on our planning right away upon having a child (we should have). At a Mommy & Me class my wife attended, they had an estate lawyer talk to the parents about estate planning, wills, advanced directives, etc., targeted towards young children’s parents. My wife came home a bit freaked about the necessity of these plans and documents. We both dragged our feet, and nearly six years later, got motivated to finish the initial estate plan just before COVID-19. I say initial because you are supposed to re-visit the plan every five years or so and if there are any significant life changes.

The process we underwent was thorough. We went through every account, credit card, retirement benefit, and social security statement. We made sure that each one had the other listed as a beneficiary and our daughter, as a secondary beneficiary, if allowed. This process allowed us the peace of mind that if something happens to the other, the remaining person could access the money and benefits as needed. We also had conversations with the relatives who would care for our daughter if something happened to both of us. We even had a good discussion of what happens with our stuff if something happens to all three of us (and made arrangements for the dog). We also had a conversation with our daughter to let her know who would care for her in the remote, far away possibility of something happening to both of us.

Given the current pandemic, my wife and I talked about how our estate planning was a relief. We had seen friends on social media have loved one get ill or lose a spouse or parent. Neither of us is in high-risk groups and are non-essential workers, so we don’t have immediate concerns about falling ill (but always wear our masks and social distance in public). Nonetheless, the randomness of the coronavirus worries me.

According to a 2020 Caring.com/ YouGov study of 2,500 35 to 54-year-olds, only 27.2% have a will. Also, for those earning $40,000 to $80,000 and lower, there is an even smaller chance of having estate planning documents. Some people may think that because they don’t have a house or earn a lot of money that they don’t need these documents in place. However, with dramatic changes in income or health, these documents can be vital in keeping the household running and reducing the impact on the children.

With more people staying home due to the coronavirus, it is the perfect time to audit bank accounts, retirement accounts, titles on cars, and any other assets to ensure the beneficiaries are correctly noted. You can even find an Advanced Directive form online that can help document your wishes, at a minimum. I’m pretty confident that estate lawyers are willing to meet remotely.

As a dad, I want to ensure I’ve taken care of my family. To properly take care of them, it means that if something happens, I want to provide the means to support their lives going on without me. So, if you’re going to continue “adulting,” now is the time to have the conversations, make the decisions, and do those tasks to ensure providing for your family, just in case.

Robert (Rob) S. Weisskirch, MSW, Ph.D., CFLE is a Professor of Human Development at California State University, Monterey Bay and is a Certified Family Life Educator. He and his wife are parents to a chatty, elementary school aged daughter and reside in Marina.

Year-End Financial Advice for Monterey and Santa Cruz Families

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Just as you get an annual physical to keep your health in tip-top shape, you should set aside time to go through your finances. This ensures that you are in charge of your money. The earlier in the month you start, the better, so it does not interfere with your holiday festivities. A task as simple as verifying your car and health insurance coverage and making or updating a personal or family budget can make 2019 go much smoother. Before you file your papers away and start to write on your brand new calendar, it is a good idea to go down this quick list and make sure your finances are up to speed.

1. Assess your progress toward your goals. Take a look at where you have been, where you are and where you want to be in the future. “Before the year ends take advantage of any gains or losses that should be recognized within the year,” said Milda Iliscupidez, a financial advisor with Edward Jones in Monterey. Having a power team including an attorney, certified public accountant and financial planner go through your portfolio can make things easier. 

2. Contribute to an IRA. You cannot open a joint IRA with your spouse, but you can each open one and claim double the tax deduction. U.S. News & World Report said that those who are not provided with retirement benefits at work could contribute to an IRA regardless of how much they earn. They added that if you are eligible for a traditional pension plan or workplace retirement plan like a 401(k) you can additionally make a tax-deductible contribution to an IRA only if your income falls below specific cutoffs. 

3. Contribute to a 529 education savings plan. “A lot of people have family that is far away or do not like to send gifts so contributing to an education savings plan is a wonderful way to show someone how much you care,” said Iliscupidez. It is never too early or too late to give a child’s brain a boost. 

4. Review your insurance coverage. Every year your needs change such as if you have paid off your home or just bought one. Go down the checklist of property insurance, auto insurance, health insurance, life insurance, and long-term care insurance. Make sure you are familiar with policy numbers, premiums and customer service numbers. 

5. Get your child to start saving. At the holidays make sure it is not just about giving money to your child so he can pick something out at the toy store. Instead, it should be about earning it and teaching a way to save. “Every time there is good behavior, or something deserving of praise put money in a piggy bank so your child understands that things are paid for, and you cannot just write a check or use a credit card,” said Iliscupidez. It helps if you set a goal such as an entertainment system or video game that your child wants and save up to be able to make the purchase. 

6. Understand how required minimum distribution works. At the age of 70, if you have a retirement account, you are required by law to take out a certain amount every year. It increases every year, and if you do not take it out, it is taxable by almost 50 percent. It is the second highest tax penalty next to fraud. 

7. Pick a charity. You can help homeless animals find forever homes or raise funds for medical research to eradicate a disease. You can also give household items that you no longer use anymore to an organization that distributes to people in need. Fidelity Investments stated that for non-cash charitable contributions over 250 dollars you would need a receipt that includes a description of the item and details. 

8. Declutter. Know what to keep and what you can discard. AARP said that there are two general rules. First, anything tax-related should be saved for at least three years, and anything tax-related that reflects a loss should be saved for seven years. For insurance policies, AARP instructed to get rid of old versions when new versions arrive. This helps to avoid confusion. Keep monthly statements until you get year-end reconciliation. When you get rid of papers, shred them to prevent fraud. 

9. Create an organization system. You can make this fun and use anything from file cabinets to decorative boxes. Once you master how your system works, you will need to maintain it. You may have a file for incoming bills for example. Put the due date on your calendar, and when you have taken care of it write paid on it. 

10. Find a professional you can trust. Forbes named some pros of having a certified financial planner. They described the advantage as having expert management of your portfolio taking into account goals and cash needs and a partner to help you navigate complex financial situations, answer questions as they come up and provide continuous financial planning. They also said the planner could bring peace of mind because you know that a professional is monitoring the market and your portfolio and making needed changes. Of course, you can manage your own money, but some mistakes can be expensive. You may miss out on tax savings opportunities, make poor investment choices or pay hidden fees and not realize it. 

Jamie Lober, author of Pink Power (www.getpinkpower.com), is dedicated to providing information on women’s and pediatric health topics. She can be reached at jamie@getpinkpower.com.

Surviving the Season with Your Finances Intact

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The average American spends roughly $900 on gifts during the holiday season, according to a 2016 study by American Research Group, Inc. Add to this, the holiday cards, decorating, baking, and holiday dinners, and it can add up to a big chunk of change.

For many families, holiday spending sets them back financially for months to follow if not longer. Credit cards make it easy to overspend leaving families to suffer the consequences later. The problem with credit cards isn’t just the monthly payments. It’s the long-term cost of accrued interest.

So what can you do to ensure you start the new year without new debt? Here are ten tips to help you survive the season:

  1. Create a holiday budget. Include not only gifts, food, and decorations, but also postage for holiday cards, wrapping supplies, and the babysitter for your shopping trip. Once you’ve listed all your expenses, review it, and decide where you can cut some costs.
  2. Start with gifts to extended family and friends. Talk to those you exchange gifts with, and see if they’ll agree to forego the gift exchange or else set a dollar limit. Another option for families or groups is to draw names to reduce the number of gifts everyone has to purchase or hold a white elephant exchange.
  3. Decide in advance on a gift value for each gift recipient. Let’s say you’ve decided on a gift value of $50 for your sister. Now, rather than buying her something on sale for $50 that’s worth $75, stick to the value. Buy something on sale for $35 that’s worth $50. This is a good place to shave a lot of expense.
  4. Pare your holiday card budget. Do you usually send out more holiday cards than you receive? Opt instead for a phone call during the holiday season for those you don’t talk to often. It’ll cost you nothing and have more meaning. Also, mail cards only to those who send you card.
  5. Cut back on the baking. When’s the last time you heard someone complain about a shortage of holiday goodies? Probably never. Most of us eat far more than we’d like to just because it’s there.
  6. Economize on entertaining. Hold potluck dinners rather than playing head chef if you’ll be hosting any parties. Offer to provide just the meat. Then ask everyone to bring a specific type of dish to avoid duplicates.
  7. Exchange services. To eliminate the cost of a babysitter, offer to exchange babysitting with a neighbor, so each of you has the opportunity to shop without the kids. Instead of baking several different kinds of cookies, bake multiples of one and exchange the extras with a few friends in a cookie swap.
  8. Plan your shopping before you head out. Do research online to find the best deals on those items on your shopping list. If you can’t find a good deal on something, consider an alternative. Also, keep your eyes out for newspaper fliers and check the ‘coupon’ page of the store websites you plan to shop.
  9. Nix impulse buys! If possible, leave credit cards at home when you go shopping to avoid impulse purchases. Many people spend far more than they plan on by purchasing unnecessary ‘bargains’ they just can’t resist.
  10. Commit to paying off any debt asap. Finally, if you do use your credit card, try to make a serious plan to double or triple the monthly payments to reduce the interest you’ll pay and to quickly get out of debt.

Kimberly Blaker of Michigan is a freelance writer. Her articles have appeared in more than 250 newspapers, parenting and women’s magazines, and other publications throughout the U.S.

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