If you’re still trying to figure out what to get your child (or someone else’s) for the holidays, you may want to consider a gift that encourages financial literacy.
Toymakers have put out a range of products in recent years that teach kids as young as 3 about responsible money management. Some of the games available, such as “The Allowance Game,” focus on teaching kindergarteners and elementary school-aged kids to count and save their pennies. Others, such as the board game “Charge Large” go a step further and teach kids, 12 and older, how to responsibly handle a loan.
Financial literacy experts say that it’s “never too early” to start teaching kids fundamental concepts about money.
However, a recent survey by Parenting magazine and Citi found that a large number of parents mistakenly believe that their kids are “too young to understand money concepts.”
In an effort to combat that misconception, financial literacy advocates have pointed to a number of studies showing that kids are not only capable of learning about money at a young age; they substantially benefit from it. A recent report by researchers at Cambridge University, for example, showed that kids as young as 7 have already figured out a number of key money concepts — such as how to count cash and identify its value — and can think ahead and make decisions they know they can’t take back. (Hat tip: Kimberly Palmer)
In a recent speech at the University of Wisconsin at Madison, CFPB Director Richard Cordray encouraged parents to play an active role in teaching their kids financial readiness. “Teaching kids about money should not be reserved to a few games of family-night ‘Monopoly’ where children are taught the benefits of buying up Boardwalk and Park Place,” said Cordray in prepared remarks. “Parents need to be engaged as their children are learning to master the concepts of personal financial management. Children form their financial identities early, and so it is important for parents to talk to their children about money at an early age.”
Gift ideas for money-smart kids
Talking to kids about personal finance, however, can be daunting. To help, you may want to start with a toy or a game that’s designed specifically with financial literacy in mind.
I recently combed through a large number of financially focused toys that are currently available in toy stores and online. Here are just some of the ones I thought were most interesting:
- The Money Savvy Pig: More than just your average piggy bank, the Money Savvy Pig from MoneySavvyGeneration has four separate slots for giving, saving, spending and investing. Available in four different shapes — a football, soccer ball, cow and pig — the MoneySavvy bank also comes with “goal-setting stickers” that kids can use to help visualize what they’re saving for. ($19.99)
- Conversations to Go: Money: Not sure what to talk about when you chat with your kids about money? This 100-card set from Moonjar may help. The set includes dozens of money-related questions and conversation-starters that players can draw from the box and use to spark a wide-ranging discussion about cash. ($16.00)
- Charge Large: The board game “Charge Large” starts players out with an entry-level credit card (as well as a limited amount of assets) and encourages players to try to end the game with no debt, a larger wad of cash and a higher end credit card. In order to win, you have to “buy strategically, borrow wisely and pay back quickly.” ($19.99, $9.39 at Amazon)
- Buy It Right: This shopping-oriented game for kids, ages 5 through 9, has multiple levels so you can adjust the game’s difficulty, based on your child’s skill level. Kids learn how to shop wisely, set prices and sell goods to other players. ($23.99)
- The Kids Wealth Money Kit: At $39.95, this set is pricy. But it contains a number of helpful tools for parents who want to supplement a regular allowance with teachable moments. The set includes a payday calendar and stickers marking the day an allowance is due and color-coded portable wallets that encourage kids to put a pre-set portion of their earnings toward education, fun, savings and donations.
If you need some extra help deciding what topics are age-appropriate for your kids, you may want to take a look at the National Standards for Financial Literacy that the Council for Economic Education recently put out for K-12 educators. The Jump$tart Coalition and the President’s Advisory Council on Financial Capability also offer a number of helpful resources.