Paul Riedner, FamDoo Content & UX, April 23, 2014

As FamDoo’s Director of Content, I work to provide content within the Do, Learn & Be modules of FamDoo that not only focus on completing chores, but also include a wide range of activities and exercises that embrace the developmental needs of children. One of these areas includes providing our kids with appropriate money management skills.

When it comes to teaching financial literacy, we as parents realize the value in preparing our kids for the future. But sometimes we may not know the appropriate way to start the conversation or have the necessary tools that make a relevant connection to their lives. Let’s take a dive into how to start the conversation, and how FamDoo can be used as a tool to teach valuable money lessons to your kids.

Parenting Gut-Check: Did you know?

86% of teens learn their money management skills from their parents.

Source: Junior Achievement Study, 2012.

Nearly 86% of parents say they aren’t always honest with their kids about money-related items.

Source: Sheryl Nance-Nash, “Why Aren’t Parents Doing A Better Job Of Teaching Their Kids About Money?” March 2012.

Here are some great tips and resources we’ve found to help you kick-start the money conversation with your kids:

Talking To Your Kids About Money:
A common concern from parents is that they are not comfortable enough themselves with money to be a confident teacher. Dave Ramsey, New York Times best-selling financial author, provides five steps to approach the money conversation in “Why Aren’t You Talking To Your Kids About Money?”

What Should My Kids Know About Money?:
It’s helpful to think about the progression of financial literacy topics in discrete steps, and how much kids should know depending on their age. A great resource to visualize this can be found at Money as You Grow, a website that offers 20 essential, age-appropriate financial lessons—with corresponding activities—that kids need to know as they grow.

How Can I Make Financial Literacy Fun?:
Another great conversation starter and educational resource is called, The Centsable Program. Winner of the Parent’s Choice Awards, it is an animated TV series that covers financial literacy for kids and is lauded for its educational value and commitment to social, emotional growth and well-being of children. It airs Saturday mornings on Fox Business and is a great way to make the money conversation a fun one!

Using FamDoo To Teach Financial Literacy:
So how does FamDoo contribute to financial literacy? The Modern Allowance ™ creates an environment where real money skills are used every day. In this environment, only when a child’s tasks are completed successfully and approved by the account holder, do they earn that portion of their allowance. Just as adults work to receive an income, families can use FamDoo to provide these “real world” experiences of earning money and making decisions about what to do with it.

Keep in mind that work is only one part of the education here; the other side is budget. A good budget should set aside portions of earned income to save and donate. FamDoo encourages parents and kids to discuss and decide what the proper blend of Save, Spend, and Donate is for them. FamDoo’s auto-settings can help manage earnings between these areas. After the allocation is set, for example: 20% Save – 60% Spend – 20% Donate, your child’s earnings will be appropriately divided and deposited into each bucket.

FamDoo is committed to adding new tasks to help kids learn about financial literacy. These tasks focus on basic money skills that we hope will help them progress to greater awareness of how financial literacy relates directly to their ambitions and goals for the future.

Making Choices (Ages 6 & Up)
At the heart of this task is the concept of scarcity. Since money is a limited resource, we need to make choices and prioritize how we spend. In the Making Choices task, we introduce to FamDoo kids to the idea of Costs and Benefits associated with two options for spending their money.

Needs vs Wants (Ages 6 & Up)
This task takes financially savvy kids one step further along the decision making process. Have a child break down their wish list into what they need versus what they want. This can be an excellent exercise to focus, redirect, and remind the child about long-term financial goals. The ability to prioritize desires in order to make a good choice with money is a valuable skill.

Dream Job (Ages 10 & Up)
The focus of this task is to help a child identify that inner spark within. Help your kid look at ways that money (and time) can be spent today to help create that dream opportunity in the future. “Does buying that magazine help you achieve your dream of being an actor? If not, then what would?”

Earning Money (Ages 10 & Up)
FamDoo kids immediately understand the value of work when the results of that work are tied directly to a portion of their allowance. This task takes it one step further to encourage an entrepreneur’s mindset of recognizing various ways to earn money.

Spending Money (Ages 10 & Up)
A key to smart money management is an understanding of exactly where our money is being spent each week. Kids are encouraged to keep a spending journal or collect receipts for every purchase made for one week. After one week, this exercise will give kids a big picture of their spending behavior and an opportunity for a larger conversation for parents.

Teaching life-ready skills to kids is an opportunity to equip them with the tools for success. FamDoo was created as a way to round out their development and facilitate valuable conversations within the family.

Paul Riedner has a degree in Economics from Carleton College, an MBA from the Carlson School of Management and is an Iraq war veteran.

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