7 Fun Money Lessons to Teach Your Kids this Summer

Summer is a great time for kids to catch fireflies, perfect their backstrokes, daydream, and learn some great lessons about money and financial literacy. Sound like a hard idea to sell to kids in vacation mode? Not if you make it a rewarding part of summer fun. Here are some tips to incorporate smart money lessons for kids from K-12 that will add to their summer fun and set a great foundation for making smart money choices later on.

SAVING

Ask your kids to set aside part their allowance for a special summer savings goal then sweeten the pot by telling them you’ll match whatever they save. For the little ones it could be as simple as setting up 2 jars, one for their summer goal (like a super-soaker, hula hoop, or the ingredients for s’mores) and one for the rest of their allowance. They’ll love seeing the jars fill up with coins and counting and re-counting their money. For older kids who are saving for a concert ticket, an app or a website that keeps track of their savings and your matching funds is a great way of getting them interested.

EARNING

Nothing like learning the satisfaction of having your “own” money! Even if your older children have an actual summer job, consider “hiring” them for extra chores like organizing your photo files, digitizing old cassettes and CDs, or washing the windows. For the little ones, watering plants, pulling up 20 weeds (counting skills!) or helping you rinse the car can help add their allowance jars.

INVESTING

There are fun games to teach kids of all ages about the stock market, investing, and the power of compound interest. The best way of course, though, is to follow the real stock market. Why not have every family member invest a virtual $1000 in 2 companies whose products they know at the beginning of the summer (Lego and Disney for the younger kids, for instance) and see who ends up with the most virtual profit by the end of the summer. Or, if you have the resources, open accounts for the kids with real investments, however small, so they can watch them go up and down, while earning interest, over the months and years ahead. The SEC’s site Investor.gov has a great compound interest generator to show kids how their money could grow.

SPENDING

Summer is also a great time to teach kids about comparison shopping, supply and demand, and the power of buying things when they are on sale. Keeping track of what you save each time you buy a sale-priced item this summer can be an eye-opening for your kids. As you enjoy vacation trips, or even day trips to waterparks, let your kids know about the value you are getting (rather than complaining about high prices.) Give the kids a choice when possible, telling them how much you have to spend for the day and ask their input about how to spend it. When they know that buying cotton candy means they are giving up two rides they learn a valuable lesson about resource allocation!

READING

Find great books to read or listen to in the car about entrepreneurs’ success stories. Young children will enjoy books about Thomas Edison, for instance, or Alexander Who Used to Be Rich Last Sunday. Try a biography of Steve Jobs for the teens, or check out finance videos from Khan Academy.

PAYING

Take a moment to explain what you’re paying for when you’re paying bills: show your kids how the electric bills soar in the summer if you’re use air conditioning or your water bill if you’re watering the lawn. Calculate – or Google – how much it costs when they leave lights on. Not exactly entertaining but an empowering eye-opener for kids.

PLAYING

Nothing like a great game of Monopoly to while away summer nights while teaching kids about saving up for those houses and hotels (including our favorite trick: hiding money under the board so no one sees how much you are accumulating!)

In short, if you treat money matter-of-factly – and build in some challenges, competition, and entertainment – summer can be a great time to sneak in a little fun “schooling” that will help prepare kids for an empowered future.

 

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The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Sherman Wealth unless a client service agreement is in place.

Ep. 147 Launch Financial- Markets Await Key Economic Data For Outlook On Future Rate Policy

Overview: Tune into this week’s episode of Launch Financial as we await key economic data, including CPI and PPI reports, which will be a key indicator of future interest rate policy and what the Federal Reserve will do at thier next meeting. As we are halfway thru the year, make sure you start thinking about scheudling your mid-year financial review to ensure you are on path to reach your yearly goals. 

 

Show Notes:

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Ep. 146 Launch Financial- Happy 4th Of July!

Overview: Tune into this week’s episode of Launch Financial as we discuss Q2 in the markets and the first half of the year. As 2023 is off to a strong start in the stock market, consumer sentiment ended the month of June on a positive note, surging 9%. We hope everyone has a wonderufl 4th of July tomorrow and we will be back next week! 

Show Notes:

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Ep. 145 Launch Financial- Markets Readied For The End of Q2

Overview: Tune into this week’s episode of Launch Financial as we discuss the markets bracing up for the end of the second quarter and first half of the year. The stock market will digest lots of economic data through the rest of the week to close out the quarter. Stay tuned for a quarter in review next week. 

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What To Do With Your Old 401(k)

Have you been laid off before, recently left a job, or just starting a new one? If so, keep reading. We’ve been getting tons of questions about what to do with old retirement accounts. This is a great question that is oftentimes not discussed, causing many people to “forget” or lose track track of their old accounts. Many people often make rushed decisions and think they need to pack up their savings when they leave a job.  And conversely, some people pay no attention when they move from job to job and leave a trail of 401(k) plans behind them.  With any employment change, it’s important to know which mistakes to avoid when it comes to your 401(k).

Here are some tips regarding your 401(k). First and foremost, pause before simply cashing out on your 401(k) when leaving a job. Cashing out and not reinvesting your funds in a qualified retirement plan is a mistake.  People don’t realize the cost to their financial security by cashing out on their 401(k) and that cost includes an immediate tax hit – income taxes plus another 10% early withdrawal penalty if you are younger than 59 ½.

One thing to be weary of is not to roll over your accounts too many times. Employees who decide to move their money to another 401(k) plan or an IRA typically have two options—transfer the funds directly to another account, or do a rollover. Although “rollover” is when you move money from one retirement account to another. That money is best moved by direct transfer, but some employers will send a check. You have 60 days to roll that money over to an IRA or other qualified plan. If you miss that window, there is a grace period (with a penalty fee), but this is offered only once every 12 months, so direct transfers are often best to avoid penalties and issues. 

There are plenty of good reasons to move your money into an IRA (individual retirement account).  These accounts aren’t linked to any one employer and consolidate your money into a single retirement account. You also are not confined to that employers or old 401(k)s fund lineup, so may have more flexibility moving over to an IRA.  However, your employer’s plan may offer you access to investment options, tools and institutional pricing that you might not get with an IRA so it’s important to analyze that beforehand. 

Next, make sure not to overlook other tax strategies. There may be other strategies to consider when weighing a job move, although most people associate 401(k) plans with pretax contribution. One option may be to convert the savings to a Roth IRA; you’ll owe income taxes on what you convert, but future growth and withdrawals will be tax free. If your income is lower that year, the tax impact will be less.  For those who’ve accumulated their employer’s stock in their 401(k) plans, leaving a job may open the door for an often overlooked tax break. 

As we get ready to kick off summer plans, use this opportunity to evaluate and understand what old accounts you have if any and your options to consolidate them. Keeping regular tabs on what is going on with your investments is critical to ensuring they line up with your goals for the future.  For more specific advice on what to do with your old retirement accounts, email, info@shermanwealth.com.