How to help your kids & grandkids avoid these money blunders

Money

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One of the best times financially is when you’re in your 20s. You’re likely not married, don’t have a mortgage or other obligations, and your job is probably the least demanding it will ever be. If you take advantage of this time, you’ll be very well off in the future, but if you waste this important time by making money mistakes, it could leave your finances deteriorated for years to come.

 

This video will cover five major money mistakes that you should avoid at all costs in your 20s and how to fix those mistakes if you happen to make them.

 

Without further ado, let’s begin.

1. Getting into Credit Card Debt

Credit card debt is easy to rack up, hard to repay and has one of the highest interest rates of any kind of debt. Worst of all, having credit card debt from an early age could stop you from saving money in the future and further worsen your finances.

How to fix it

Credit card debt has a very high-interest rate, which means you should pay it off more aggressively than other debt – the sooner you pay it off, the better. When paying off credit card debt, you should pay off the card with the highest interest rate first while still paying the minimum amount due on all other credit cards. Once you have paid that card off, move on to the one with the next highest interest rate.

2. Not Saving for Retirement

When saving for your retirement, time is your best friend. The earlier you start saving, the better.

 

Let’s take an example: If someone started contributing $50 a month to their retirement account at age 20, they’d have over a million dollars when they’re 70. In contrast, if someone started saving at 45, they would need to contribute $750 per month to get the same result. That’s 15 times more money they would need to set aside every month!

How to fix it

The easiest way to fix this problem is to start investing now. Whether you’re 20 or 30 or older, the sooner you start investing, the better. When you start investing, make sure to park your retirement savings in a special retirement account,  like a 401(k) or Roth IRA. That way, you can lower your taxes and further accelerate your saving for retirement.

 

 

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3. Spending Carelessly

Have you ever gone into Target looking for milk but came out with shoes, a bag, a pair of jeans and a t-shirt? Chances are, you’ve made some impulse purchases. And those seemingly small expenses add up. Over time, if you stop spending so carelessly, you could end up saving a lot of money that could go to something you really care about buying.

How to fix it

To stop spending carelessly, you need to know what you’re buying when you go to a store. Make a list of what you will buy, and stick to it. No matter what, you shouldn’t buy things that are not on the list. Alternatively, you can also add up the cost of each item and only bring enough cash to pay for those items – no credit cards! That way, you cannot overspend.

 

And finally, if you do end up making impulse purchases, make sure to return all unused unnecessary items as quickly as possible.

4. Taking Loans for Big Purchases

When you go on a vacation or buy a luxury handbag, you might be tempted to take a loan and take advantage of “easy” monthly payments. Don’t! Just like with credit card debt, all loans will leave you with not enough money to save or invest in the future.

How to fix it

Next time you think about taking a loan for a purchase, try saving for it instead. You can set aside a portion of your paycheck every month, and when you’re done saving, you can take that vacation or buy that product without worrying about breaking the bank.

5. Not Living Within Your Means

Imagine someone earning $3,000 a month has $1,000 left after paying for essentials like rent, utilities and groceries. If they choose a lifestyle that involves eating out, partying all the time, paying for expensive gym memberships and spa treatments or other expenses, it will easily eat up the $1,000 and more! This will not just impact their ability to save for the future, but it would plunge them into a debt-ridden lifestyle.

 

 

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How to fix it

Create a budget. Outline your income and how much you intend to spend on each category of expenses: food, rent, entertainment, etc. Then, add up the expenses and check if they are less than your income. If they are, great. If they aren’t, then you need to reevaluate.

 

But the most important thing is to stick to the budget. If you don’t, then there’s no point in having one in the first place.

 

Related:

This article originally appeared on EasyPeasyFinance.com and was syndicated by MediaFeed.org.

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23 fun ways to teach your kids about money

 

Most parents are looking for toys, games and activities that will keep their kids occupied, but also help them learn in the process. So we’ve put together a list of 23 fun ways across four different categories that can help you teach your kids about money, and giving them financial literacy skills for today and the future.

 

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You can start teaching money basics to very young children with toys such as these.

 

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As early as age 2, there are toys like The Learning Journey Numbers and Colors Pig E Bank, which has colored coins that the bank counts as you put them in the slot. It costs around $19.

 

Rawpixel / istockphoto

 

Beginning with toddlers (around age 3), you can use a play cash register to let kids play “store” and understand the basics of money. This can help them learn how much money they have, how much they have left when they buy something, and how things add up when you buy multiple things. One popular cash register from Learning Resources costs about $30 on Amazon.

 

kiankhoon / istockphoto

 

Made for kids 5 and up, this Learning Resources Pretend & Play Checkbook comes with a calculator, checkbook, deposit slips and guide to help kids learn about managing a bank account and writing checks. Even if checks aren’t often used much anymore, it’s still a fun way to help your kids learn about money and debiting accounts. It costs approximately $12.

 

Learning Resources / Amazon.com

 

These games are available online for you to help your kids learn about money and finance.

 

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This simple money game on Visa’s Practical Money Skills site is made for ages 3-6 and involves putting together a “puzzle” from mixed up pieces of a bill ($1-$100).

 

Cash Puzzler / Practicalmoneyskills.com

 

Ruby’s Troupe is an organization that uses an interactive theatre with a fun-loving group of puppets to teach kids ages 3-10 (and their parents) about money and finance. The program was created by puppeteer Phyllis Matson and Debbie Todd, a licensed CPA. It has online modules where children watch puppets, get coloring pages, and have access to games and activities.

“We have three purposes when it comes to teaching about managing money,” Todd explains. “First is for them to find out it’s fun. Second is to find out it’s practical. And third is that they can do it and be successful at it.”

They also focus lessons on the emotional and psychological aspects of money, because that is where a lot of mistakes can be made. They’ve also done live sessions and Todd says it’s amazing to see the “tall kids” (parents) sit in the back and learn with the kids: “By the end, we’ve provided the parents with the tools to have a non-confrontational, non-threatening conversation with their children.”

Ruby’s Troupe also donates 90% of its profits to charity, including nonprofits and foundations that promote financial literacy, which is critically lacking here in the U.S. Only 17 states offer financial literacy courses for high school students and a recent report card by Champlain College’s Center for Financial Literacy gave only five states—Alabama, Missouri, Tennessee, Utah, and Virginia — an ‘A’ grade for providing personal finance education.

 

Financial Educators Council

 

Made for children from 5-8, this interactive game from Visa helps kids learn about counting and saving money along with U.S. currency.

 

Peter Pig’s Money Counter / practicalmoneyskills.com

 

Clay Piggy is an online game created for Kindergarten and above by a parent who didn’t find any fun options when trying to teach her own daughter about money. Students learn basic money management skills such as how to earn, spend, save, invest, and give.

There are different scenarios in the game where they have to take a job to earn money, create a budget, understand wants and needs, watch their credit scores, be a responsible investor by assessing credit profiles of other users who asking for loan, learn how to pay taxes, look at their paychecks and more.

“Parents need to talk to their children about savings and give them situations at an early age where they have to manage money,” explains Narinder Budhiraja, founder of Clay Piggy. “Lots of people learn about money by making mistakes and then spend lot of years fixing their mistakes. This bring lot of stress in their personal life. At Clay Piggy, we are determined to change that behavior.”

Currently Clay Piggy is currently only available for schools to use, but they’re planning to roll out an application for parents later this year.

 

Clay Piggy / claypiggy.com

 

Another game on Visa’s Practical Money Skills site, this one is created for 7-12 year olds to make life decisions that impact whether their virtual bank account will make or earn money.

 

Money Metropolis / Practicalmoneyskills.com

 

This game is a choose-your-own-adventure simulation where kids help a backpacker plan a trip to Mt. Everest without going into debt. It’s available from Money Prodigy and is made for kids ages 8-13. You can learn more about it and join the wait list here.

 

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Visa’s World Cup-themed soccer game is made for ages 11 and up to test financial management skills and the Financial Football game helps kids learn about money management.

 

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Created for ages 13 and up, Cash Crunch 101 facilitates the conversation about money. It was created by a teacher for the classroom, but can be used by parents and kids as well.

 

Cash Crunch 101 / cashcrunchgames.com

 

By keeping these around your house, your kids can play games with the family to learn more about money.

 

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Kids ages 5-8 can play this kid-appropriate version of traditional Monopoly, learning how to count money and accumulate assets. It costs approximately $15.

 

Hasbro / Amazon.com

 

This version of Hasbro’s Game of Life is made for kids as young as 5, letting them go on various life adventures and make money along the way. It costs about $25.

 

Hasbro / Amazon.com

 

This board game was created for children ages 7-12 and focuses on the value of money, denominations of money and making change. It’s a great way to help kids learn at home while having fun counting money. It costs $30 and is available on the Cash Crunch Gameswebsite.

 

CashCrunchGames.com

 

Kids age 7 and older can play this board game from Learning Resources that teaches about collecting, counting and exchanging money. It costs about $16.

 

Learningresources.com

 

Originally launched in 1975, this board game was made for children 8 and older to play with their families. Created by Winning Moves Games, the object is to have the most money at the end of the game, which runs about 35-45 minutes long. Throughout the game, players can make deals on property to earn money, get a salary, pay off bills, take out loans, add to savings, and learn about paying fees. You can get it for approximately $15.

 

Winning Moves Games / Amazon.com

 

Ages 14 and up can learn more about financial skills, investing, and wealth building in a fun way with this interactive game. It was created by Robert Kiyosaki, author of the bestselling personal finance book of all time, Rich Dad Poor Dad, and comes with a PDF guide. The cost is approximately $80 on Amazon.

 

The Rich Dad Company / Amazon.com

 

Going and doing isn’t just a great way to spend quality time together, it can also be an opportunity to learn about money.

 

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If you live in Chicago or are traveling there this summer, make sure to take your kids to the Chicago Fed’s Money Museum. It’s open Monday through Friday (except for Bank Holidays) and they offer exhibits such as the Alexander Hamilton Exhibit and interactive displays like the “Banker Challenge” game where kids play the role of a bank manager.

 

Federal Reserve Bank of Chicago

 

While camps to get your kids outdoors are great, you may want to look into finance camps for a fun, educational experience for part of the summer. Even though finance summer camp may not sound exciting at first, these camps make money and entrepreneurship really fun for kids:

  • Camp BizSmartTM in Santa Clara, CA and Chattanooga, TN helps aspiring young entrepreneurs ages 11-15 learn how to solve business problems and defend their solution to executives and investors.
  • KidsCamps.com offers a directory of camps, showcasing availability in 18 states for business and finance camps.
  • Smart Money Commanders Fun Summer Money Games is launching its first online summer camp in mid-June 2018, which will run through August 2018.
  • Young Americans Center For Financial Education offers workshops in the Denver area both to teach about managing money and running a business.

 

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Check out the children’s museum(s) in your area. Many of them have rotating exhibits and some of those cover business, money and finance in fun, interactive ways. You can find children’s museums here.

 

monkeybusinessimages / istockphoto

 

Teaching your kids how to give to others while on a budget is something that will help them learn various skills and allow them to feel a sense of purpose and pride. Here are some unique ways kids can learn about money and give back.

 

Rawpixel / istockphoto

 

There’s an organization in Atlanta, GA that not only encourages children to give back, but teaches them how to raise money. Kids Boost, which currently has a wait list of over 200 kids, is a 501(c)3 organization that gives children from third grade through high school $100 and they put together a fundraiser for a charity of their choice. In just a few years, they’ve given kids $6,000 and they have turned that into more than $110,000, supporting 48 non-profits.

“Fundraising comes with important life lessons such as money management, communication, planning, and accountability,” explains Kids Boost founder and executive director Kristen Wintzel. “This teaches kids so many things while boosting courage and self-esteem and supporting wonderful nonprofits around the world. Most kids go on to either compete another Kids Boost project or continue to get involved in philanthropy and civil engagement. Giving is powerful and giving is contagious!”

 

KidsBoost.org

 

Instead of adding to the never-ending supply of toys that your kids play with for five minutes, you can use your child’s birthday as an opportunity to give back. Some charities like St. Jude’s offer a birthday fundraising program where you can easily create a page to collect donations for your birthday. Also, Facebook lets you create a fundraiser for various organizations, letting you share and have people donate to anytime including your birthday.

You can also pick a charity that may need physical items and create an Amazon wish list. We did this with my daughter for her birthday—collected toys for the Aflac Cancer and Blood Disorders Center, an idea I borrowed from my cousin. You can deliver the items with your child and make them part of the experience.

This may not seem like its teaching kids how to manage money, but it helps them learn about wants vs. needs and the value of money—along with how it can be used to do good things for others.

 

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The bottom line is that it’s a good idea to get your kids involved in money conversations early on, and make sure it doesn’t become a taboo topic. It can benefit them (and you) in the long run, and help keep them from becoming embarrassed when dealing with money challenges.

The reality is that most all of us have to deal with negative financial issues at some point. A recent survey by the American Psychiatric Association shows that two-thirds of Americans are anxious about paying their bills, up from 56% last year. So the earlier you teach your kids how to handle money and how to talk about it, the better set for success they’ll likely be as they grow and start making their own financial decisions.

For those who may not know where to start, Amanda Grossman, Certified Financial Education Instructor and founder of Money Prodigy says, “The best way parents can get started teaching their kids about money is to find out what your child is interested in, such as goals and what they want to be, do, and have in their lives. You can then tie any money lessons you teach or money conversations you have moving forward to their list of things that are important to them, meaning they’ll be more receptive in receiving the information instead of just thinking you’re babbling on about stuff that doesn’t relate to them.”

This article originally appeared on Experian.com and was syndicated by MediaFeed.org.

 

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Featured Image Credit: SbytovaMN / istockphoto.

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