“If there’s one thing that’s guaranteed to put a strain on a friendship . . . it’s money. Or, rather having different amounts of it, and the conflicting attitudes that often accompany financial disparities” (Otegha Uwagba, “Money” The Gentlewoman, No. 23, Spring and Summer, 2021, 156-57).
Mother and daughter using credit card online
For so many kids today, their priority is often defined by “fitting in:” having the “right look, the “things” all the other kids have, being in the “right” group. These concerns are, of course, not new. However, what clearly differentiates past generations of kids from Gen Zers today lies with the overwhelming impact COVID has had on parents’ and them. Health, finances, employment, housing, education, and family/socialization have all affected kids’ sense of normal, as well as their sense of safety and stability. Parents may be unaware that kids listen to and feel their parents’ frustrations and fears; actually, this generation of kids constantly reflect and process even when they do not appear to be doing so. And they do not always share these internal questions, thoughts, fears, and frustrations with parents.
As a result of kids’ increased listening and reflection, one very interesting reaction has emerged with kids’ being more open to discuss their concerns about the future with teachers and each other—particularly, how they can help their parents with costs, as well as pay for college. Amazingly, even elementary kids share these concerns. More specifically, our kids worry and fret about money.
This blog addresses the new, very different, often uncomfortable, and frank conversations Gen Z parents must have for the present conditions and the preparatory conversations parents must continually have to establish, guide, and sustain kids’ financial literacy as they mature.
Why, and why so much focus now? In an article published by the American Psychological Association, “Gen Z more likely to report mental health concerns,” Gen Zers cited the following as personal stressors they experienced almost daily: money, lack of housing stability, and debt (Jan 2019, Vol. 50, No. 1).
Saving—never too young
Money/finance is no exception. John E. Grassie, co-author and collaborator, and I have discussed our observations of students and their conversations. In addition to our observations, we were also reading a variety of articles authored by Gen Zers’ sharing their personal challenges with finance as well as their increasing concern of not having the requisite skills to navigate and think through managing money—saving, spending, self-discipline, for example. Having these hard and sometimes sensitive conversations with family may pose internal stress. In addition, while Gen Zers talk among themselves about money, the peer pressure some of them feel further limits such conversations because some so want to fit in and not say the dreaded words: “I can’t afford that,” or “I don’t have any money.”
As a result of our conversations and research, John and I discussed the efficacy of addressing the critical import of encouraging parents to have frank conversations about financial literacy with their kids, specifically, talking and listening and observing their kids.
What many of us have taken for granted for so long—money, housing, safety, work—no longer are “a given.” For this generation, literally honed out of post 9/11, the Great Recession, the digital-terrain, COVID 19 with its concomitant challenges and tragedies, George Floyd, #MeToo, #BlackLivesMatter, #AsianLivesMatter, and other social-awareness moments, and increasing violence, the “new normal” is processed and adapted to in nanoseconds. For this generation of students, these changes are ever-evolving and ever-morphing.
Adventurous, teachable moments: Father’s guiding and modeling for son financial literacy
Having financial conversations as early as possible and sustaining them will inform and armor kids in so many ways. To address these challenges, the Blog is divided into sections:
For Parents: Topics to Explore and Model Kid-friendly Section—Interactive Family Activities Hyperlinked Resources—For Further Information
For Parents: Topics to explore and model:Defining and helping kids with terms: As noted below, this section is about more than only describing terms with kids. A greater potential for learning might well be gained through kids’ participation in specific activities (provided later in the blog).
Understanding the Bank—Saving: Explore with kids what this word means and looks like. There are many ways to save: personally, pensions, investments, for example. Identify and explain additional terms often associated with Saving: growth, interest. Whenever possible, have your kids join you at the bank. Show them what you are doing and why it is important to follow certain rules. If the bank tellers or customer service representatives agree, have them talk with you and your kids about how the bank works.
Explore at what age kids can have a savings plan/account—procedures, process, signatories/access, and monitoring growth.
Adventurous, teachable moments: Father’s guiding and modeling with daughter checks and balances
Also, be prepared for the unexpected questions:
1. Does everyone save? Why/Why not?
2. Is saving really that important?
3. What are some other ways to save that do not require a bank, credit union, for example? What other types of money can be saved and how, such as tax returns.
Understanding the Bank—Checking:
1. What is a checking account? At what age can kids have a checking account?
2. How is a check written, how is it used, and is there only one kind?
3. Associated terms:Balance Over-draft Balance Money in/money out Insufficient funds
Checks and Balances—listing and review—keeping records
Credit card(s): Perhaps no other form of purchasing goods has more sustained appeal than credit cards. Many kids grow up, seeing adults and older kids using them. Banks and credit card companies spend thousands of advertising dollars, persuading viewers and readers to believe the ownership of credit cards moves a person into a certain class economically and socially.
The visual impact and design of the cards also appeals to both parents and kids. At early ages, kids are consciously and subconsciously affected with the alluring message that one’s owning a credit card is a necessary brand for identity and image. Peer Pressure and Identity are key components here which are daily concerns for kids.
1. Explore with kids why, when, and how to use credit cards.
2. How many are too many?
3, With high school and college-aged kids, prepare them for the onslaught of credit card offers they’ll receive that promise unbelievable rates and “gifts.”
4. Use any personal narratives, if you have any, that illustrate to kids how easily anyone, including parents can be overwhelmed and even, sometimes, deceived by such offers.
5. Encourage kids to feel they can come to you for help and counsel, even if they have made a mistake. Allow kids to know you are their champion and guide without fear of blame. Turn such moments into family learning moments.
6. Illustrate where to find and the importance of reading the fine print on all agreements before accepting credit cards.
7. Always remind kids: Never loan credit cards or numbers.
1. What are the differences between a debit card and credit card?
2. What are the Pros and Cons of debit cards?
3. How does a debit card work with a checking account?
4. Or, with other forms: online shopping or allowance through other companies—Teen debit cards: A real-world way to teach by our kids about money (NBC Better by TODAY 24 October 2019).
Father and daughter using debit card online
Good credit ratings depend on ones creating a credit history of paying bills on time—debt that is paid back with regularity over an extended period of time. This kind of debt parents take on to create a good credit rating. Help kids understand how a good credit rating is a recognition from the banks and lending organizations for paying off debts in a regular and timely manner.
1. Show kids sites that track personal debt to illustrate what the site elects to list, to score, to rank.
2. Show kids how such sites can be helpful in contesting a possible report error.
Spending money wisely: Explore with kids what this phrase means to you and why you want to share it with them. All parents have varying definitions of this phrase. Being clear in how parents want to influence kids early on is keenly important to discuss and model. Think about how you spend money—wisely or not so wisely?
Money/Financial literacy—never too early
1. Have you ever reflected on any item(s) that you later regretted buying? Why?
2, Given how many have experienced very hard times with rent and mortgage payments during COVID-19 and the end of the eviction moratorium, now is an important moment to examine personal stories of others—people evicted, mortgage companies, renters, landlords through articles and news reports—money management and unforeseen challenges.
Shopping: As a very small child, a huge treat for me was going to grocery and department stores with my Father and with my parents together. I loved it! From those experiences— observing and listening to my parents, watching them interact with merchants and salespeople—I learned how to “talk” to people, to listen to them, to look at what I was purchasing. The adventure with my parents was always fun, yes. In addition, though, they were modeling for me what to buy, how to choose, when to listen to advice and recommendations, and comparing and contrasting prices on my own.
Since COVID and economic challenges, shopping habits have changed significantly. Going to many different stores and malls has evolved in ways that address health and safety concerns: online ordering, delivery, pickup, and curbside. All of these most recent iterations of shopping comprise both traditional and new shopping methods parents can use to help kids understand and navigate shopping—informed, safe, and fun.
Supermarkets, for example, have undergone huge adjustments, making way for groceries to be home-delivered, shopping for groceries to be online, paper ads formerly delivered via postal mail, now appear in email and texts.
Family grocery shopping together, examining produce
1. With kids, talk about how shopping has/has not changed for the family.
2. Explore how lists can make shopping smartly more targeted vs impulse buying.
3. Read, Read, Read—With kids, make reading the labels, origins of products, and, if possible, even talking with those who provide the services—butchers, stockers, sales people, for example—when in the grocery store—any other stores—to illustrate how reading and interacting with those who provide services are so important in making wise decisions on pricing, quality of item, place of origin for item, freshness/durability of item.
4. Making money grow: This section expands on the Saving sections. In addition to saving, how can kids themselves make money and grow it?
Here, parents can integrate other lessons: working for money and saving, for example. Kids’ work experience, from babysitting, helping those in their community, to part-time jobs are important. Another important point to make regarding this section of making money is how can kids use their earlier experiences of jobs/tasks for money later?
Simply put: College Applications.
Do remember, many college applications have sections for a personal profile. This section provides an assigned group of professors who read, review, and ultimately approve application-entry requests to have a more personal snapshot of the applicant as an individual, a person. In this section of the application, students are asked to list what they’ve done from childhood to the present in the community—volunteerism and work.
This section is important because it encourages students to provide professors an insight into who they were and are becoming as individuals. In a sense, this section allows and encourages students “to speak” to the professors who will decide approval or rejection. This section is also important because it can provide information a professor may decide to use as further support for the student’s entrance approval to the overall committee.
1. Influencers and their impact on kids: TV, song lyrics, celebrities kids favor, such as athletes—kids see, hear, and watch these individuals, Influencers, almost daily. Just how much do these forms and individuals influence them and their sense of money and spending?
2. Make yourself(selves) available to kids to explore how they understand and see themselves in relation to money. In other words, how do they see who they are as a person with or without money?
3. Be honest with kids about how money is important around the entire world, but also how money does not really define a person. Many examples exist in the media today of immensely wealth people who are not happy with themselves, who are incarcerated, who cannot seem to find happiness within themselves.
Sometimes, having such conversations can be difficult for parents, And, sometimes, parents might be uncomfortable sharing sensitive topics like money and finances, especially, personal narratives. However, with this new generation of kids, personal narratives are important. Family history can provide significant and intimate family moments. For example, on a personal note, John’s Father and mine died when we were 11 and 10, respectively. Our Mothers almost immediately brought us into the world of finance: going to the bank with them, being on the checking account, writing checks for bills, shopping at the grocery store. Of course, our Mothers were guiding, explaining, and modeling at every juncture. Did John and I completely understand the import of the financial lessons or how long those early days would help us downthe road in college and career? Absolutely not. But . . . to this moment, we remain ever so grateful.
Father and daughter grocery shopping checkout with card
This brief personal snapshot illustrates not only how important parents’ guiding and informing children about finances can provide lasting and informed financial literacy practices but also how early tutoring, guiding, modeling, and including kids at the financial table can make them feel safer because of the inclusion. You privilege your kids’ voices and input when you listen, explore, and respond to their concerns.
Leveraging School: I am a teacher. I could not resist this last piece: Think about leveraging what kids are reading in English language arts, social studies, and mathematics classes when you explore and have activities on finance and money. Some of the texts, time periods, and socio-economic challenges are integral parts of school curricula around the country. While this activity is a kind of “going back to school” for parents, it is also an integrated approach, providing a real-life model of how what kids are reading in class also reflects their real world—relevance. This connection is very important to Gen Zers.
Family Activities: As discussed earlier, what follows are some ideas parents and kids can do together: fun and learning at the same time.
Smart Shopper—Create a Simple Budget:
As a fun and interactive time together, create simple budgets, such as for groceries; kids can select and track the cost. Kids can purchase the item(s) on their own in the grocery store, recording the cost and amount of change. Or, if online, kids can do the same activity with you. Using this methods, selection of the online source and why is the first step. In addition to following the steps of purchasing groceries online, another concern will be to help kids understand site-security and scheduling. Remember: be patient and allow for possible errors the first few times.
After kids’ first experience, work with them to continue including their help and input.
Exactly how to win—guiding and modeling together
Whether you decide to allow kids to share your checking account, have their own, or have a savings account, take them to your bank, or, a bank, at an early age for the experience. You may even want to explain to the security person your “mission” and if you feel comfortable, talk with the guard and other persons, if available—tellers, managers. You’ll be surprised at how friendly some will be when they understand why you are bringing you child into their bank.
Don’t forget to take any brochures to share and explore later at home. Also, take a picture of your child’s first time at the bank, in front of it where the name is clearly visible. Work with kids to explain how savings and checking accounts work.
On Your Own—Earning Money:
Consider alternatives to an allowance, such as specific projects in the community or a part-time job. Allow kids the choice of saving all or some of their earned money and allow them to save money towards something they want to purchase—just like you! As they work and save, kids can determine how long it will take it save enough money for the purchase. Share conversations about this process, allowing them to ask you questions and your answering them.
Make part of this include a means of storing all their money as they save for the item. Have the kids keep records of how their savings grow over time. Make their purchase a celebration of their efforts.
Buying Wisely: How Do You Know?
As discussed earlier, we all know from experience that money-sense takes time and maturity. This blog addresses working and sharing with kids very young through college. As you and your kids begin the process, allow for regular review and honest assessment.
Be prepared for kids to challenge you; this is exactly what you want. When Gen Zers inquire, even push back, they really are processing. They really are listening. So, think about how you and kids can chronicle your progress. Again, this repetitive review establishes a model that kids may very well adopt for life.
1. If you had to write down your process of buying wisely, what would that list look like?
2. Once you have your list, would kids benefit from using it as a model?
3. Ask kids to share their lists. Compare and contrast in a “we are all in a learning mode”—a family-friendly activity.
4. No recriminations from either side. Have fun learning with kids. Don’t be afraid stop to tell them, “I had never thought of that!” Kids will not only be surprised but also will love it and be more willing moving forward to share and discover together.
Resources:You can find additional resources to help with kids’ financial literacy through local financial sections in newspapers, as well in a variety of articles.