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April 2020 marks the 20th anniversary of Financial Literacy Month, also referred to as National Financial Capability Month. The National Endowment for Financial Education initiative began with students, encouraging youth to explore financial education opportunities and strengthen their financial literacy.
As the U.S. continues to work through the Coronavirus health crisis, many people are confronting financial challenges. Even if this is not your first time experiencing financial hardship, it may feel different because of the widespread impact and uncertainty. Furthermore, many people in the U.S. would benefit from some financial education as 54% of people had trouble coping with their finances, and 17% were struggling to keep up with their finances in 2019. These numbers will undoubtedly increase in 2020, so it’s never too late to get started or brush up on your financial education.
Now more than ever, learning about personal finance is no longer a choice or privilege—it’s a necessity. It’s essential to dedicate time to understanding your finances and use this knowledge to make improvements to budgets and adjust spending habits.
Here are three financial resources that you can start using today.
Make money real for kids with roleplaying games
How old were you when you understood the value of money? For little ones, the difference between a $5 bill and a $50 bill is an extra zero. Kids learn by doing, which makes role-playing an effective way to help learn the value of money. Try turning your home into a shop. You’re the shopkeeper and your child is the customer.
Start the exercise by having your child draw, color and cut $150-worth of paper money—their spending budget. Any mix of denominations will work. Have your child use their math skills to add up the dollar values until they get to $150. Allowing children to choose which bills they use can help them develop a sense of ownership over their micro-economy.
Next, here are some options to get you started with creating interactive money games to role-play with your child:
- The pricing game: Have your child guess what things in and around the house are equal to or cost less than $150. Have them find 5, 10, or 20 items that are over/under the set amount depending on their understanding and/or interest in the game.
- The “thrifty shopper” game: Using the items from the pricing game, help your child find the actual retail value of these items online so they can see how close they were to the actual price. As an advanced option, you can explore different sites to find the “best” price on items of interest.
- Take the thrifty shopper game a step further by asking, “If you had $150 of your own, what would you buy for the yard/bedroom/playroom? What things that we already have in the yard/bedroom/playroom would you buy with your $150 budget?” The catch here is that they only have $150 to spend, which encourages developing budgeting skills and a conversation about needs versus wants by talking through the things they chose to buy and chose not to buy.
- The playtime budget: Have your child “buy” items that they can access during playtime (within reason). Attaching an imaginary budget to playtime can help instill the value of money and limited resources. As the shopper, the child can offer you part of their budget to “purchase” an item for playtime—you can role-play emotions as the shopkeeper to show that you’re disinterested in selling (the offer isn’t enough), content/happy (that’s a fair offer), or very excited (the offer was more than necessary).
- The “higher-lower” price comparison game: Choose sets of items around the home to do a price-comparison to determine what costs more and what costs less when comparing the chosen items. The difficulty of this game can be scaled easily by choosing items with very different values, or items with very similar values.
Roleplaying and creating interactive experiences allows your child to hold the “money,” declare how they will use the money and exchange the money for a good or service. It creates a tangible experience that helps young kids develop cognitive skills for remembering information and problem solving on their terms. Over time, you can expect your child’s critical thinking skills to improve, and they will show a better understanding of market value. Plus, it can be a fun way to mix things up without depending on a screen for entertainment.
Jump$tart! Reality Check for teens
Teens have a lot of ideas about themselves, how they should be, or how they want to be seen by their peers. However, they may need support in understanding themselves in relation to the world around them. When money is involved, teens may overspend or underspend, depending on a range of factors such as adolescent age and socio-familial circumstances. Teens know the value of money and can make short-term decisions on their money habits, but they might not see the need to plan for their financial future.
It’s not always easy to have a conversation with teenagers about real and expected living expenses—you may consider sharing your experiences or other examples of living expenses. Still, they could have a tough time relating to examples and anecdotes with little-to-no personal experiences with their own finances. One approach to help teens plan for their financial future is through choice-based simulations.
Reality Check is an easy interactive question and answer exercise for teens to gain perspective on financial planning for their future. The interactive tool Jump$tart! uses data from the Bureau of Labor Statistics in its salary, job, and education calculators. Teens get to see how much money they’d need per hour, per week, and per year to afford the lifestyle they want in the future. They also learn what jobs they’d need to work to sustain their future livelihoods.
Reality Check is based on national averages, so the tool isn’t a one-size-fits-all simulation. However, the interactive resource can be a starting point for teens to research cost-of-living scenarios and college, career, and job training options. More importantly, teens can initiate conversations on financial planning for the future with you rather than the other way around.
Enrich Calculators for adults
Getting ahead of your personal finances takes time, effort, and financial awareness. Not everyone has access to a financial advisor or coach to help with this process. Navigating financial information alone can feel daunting and risky. Where should you start? How do you determine if the resources are credible?
If you’ve asked yourself similar questions, you’re off to a good start. Showing an interest and a commitment to useful and accurate information is a good step in managing your personal finances. Asking questions reinforces your financial framework. Your questions are the building blocks to that framework, so write them down for future reference to help keep you on track. Before getting answers to some of the more complex questions of personal finance, you may want to evaluate where you are now and compare that to where you would like to be in the future. You can do this with some simple calculators. This exercise can help you understand how to focus your in-depth personal finance questions and research.
OnPoint’s Enrich financial education resources platform features a Calculators page. There are 25 interactive calculators based on common financial situations like:
- What’s the difference between saving now versus saving later?
- How much money should I have in an emergency fund?
By signing up for a free OnPoint Enrich account, you can try all of the calculators. You also have access to OnPoint’s suite of calculators, which requires no sign-up or login and is categorized by the following topics: auto, home, savings, retirement, debt, and business.
We’re here to support your financial growth
We acknowledge the many ways the current health crisis affects our members; we’re committed to serving our community throughout the crisis and beyond. We also recognize the opportunity to share financial education resources to strengthen your financial health. Any age is the right age to exercise your financial muscles, and Financial Literacy Month is a great time to make some progress. Do you want to find additional resources to help you on your journey? Check out Enrich for interactive digital courses, tools, and more.