What important lessons will you teach your children this summer? Riding a bike? Sharing with others? How about teaching them important financial skills.
Financial literacy may not immediately come to mind when many parents think of essential skills for students but what children know about money at a young age can shape the way they manage money in adulthood. As children develop, they are strongly influenced by what they learn in their formative years, and studies have shown the same holds true for financial matters. In fact, a 2015 study by the Financial Industry Regulatory Authority (FINRA) found that credit scores among young adults improved in states with mandatory financial education.
However, not all states implement financial education, and when it comes to financial literacy, American education falls short. A 2012 study by the Program for International Student Assessment (PISA) found that American students performed below the world average on a simple financial literacy assessment. Additionally, over 7,000 American youths earned a grade average of just 60% on a 2014 financial literacy test administered by the National Financial Educator's Council. Yet with students today graduating with an average student debt of $48,172 having strong financial skills is equally important as the degree they earn.
So how can we close the gap between what American students currently know about money and what they need to know?
Financial education standards vary widely from state to state, making it difficult to know exactly what kind of money skills your child may learn in school and even at what age. Since important financial lessons aren't always taught at school, children often need learn these skills outside of the classroom. However, this doesn't mean they have to sit through hours of difficult, tedious lessons: they can learn important life long skills in a fun way.
Edutainment - one of the key personal finance instruction tactics that Visa uses to reach people of all ages - is an innovative learning method that strikes a balance between education and entertainment. Whether through interactive games, comic books, or other methods, students can learn financial lessons without feeling like they're studying. And it can help them retain the information better. According to a 2013 study commissioned by the Bill & Melinda Gates Foundation, students who played educational games in addition to the standard curriculum performed better on tests than students who didn't.
Summer is a great opportunity to teach your children more about money. It's a perfect way to keep their minds active while school is out, and helping them learn through edutainment ensures that lessons are fun and engaging while still being worthwhile and informative. There are many great resources available to help improve your children's financial literacy, whether they're in kindergarten or about to graduate high school. Here are a few simple ways your children can learn about money this summer.
Learn together: Mymoney.gov offers activities and lessons for all ages, ranging from fun cartoons about American coins to guides on how to budget effectively. The site provides enough resources for the whole family to learn together in an engaging and entertaining way. The website features World of Cents, a child-friendly game for ages 5 and up designed to help teach the value of money through the concepts of earning, saving and spending money, while incorporating basic math concepts.
Begin with the basics: Knowing the value of money is essential to financial literacy. The sooner children learn how much everyday items are worth, the better. Visa's Practical Money Skills initiative has developed a game, Peter Pig's Money Counter, which helps children improve basic financial skills such as sorting and counting coins to learn their monetary value. Besides helping youngsters brush up on their math skills, the game also teaches the value of saving money. The free game is available online, as an Android app and from Visa's Practical Money Skills website.
Animate it: Educational favorite Schoolhouse Rock! makes finance fun with songs about interest, savings accounts, paying bills, and more. Dynamic animation and catchy songs help children learn basic financial facts while having fun. Search for clips online or pop in a DVD to teach your children these important and practical lessons in a fun and memorable way.
Play the market: The Stock Market Game is an online simulation of the global capital markets that engages students grades 4-12 in the world of economics, investing and personal finance, and has prepared 15 million students for financially independent futures. The game is part of a program provided by the SIFMA Foundation.
Make it comical: Visa recently teamed up with Marvel Custom Solutions to create a Guardians of the Galaxy comic that promotes saving and smart spending and introduces young children to the difference between wants and needs. The comic, "Rocket's Powerful Plan," features an exciting storyline where saving money in an emergency fund is crucial to helping the Super Heroes. If your children are fans of Rocket, Groot and Ant-Man, they're bound to love this comic featuring the same iconic characters.
Bring it to life: Jump$tart Clearinghouse offers a variety of games and resources that demonstrate how money skills transfer to real life. Children are challenged to plan their budgets, stretch their money, and be financially responsible. The website also provides a range of educational materials for both parents and teachers.
Additional edutainment resources include:
• MyMoney.gov Youth Resources
• TreasuryDirect Kids MoneyMemory and Perry's Pennies
• The United States Mint H.I.P. Pocket Exchange games
• Visa's Financial Football and Financial Soccer
Looking for even more resources? Visit the Practical Money Skills website to explore personal finance topics and materials for every age group.
Bottom line: It's important to teach your children about finance, and edutainment is both an effective and engaging way to do so. Use these summer months to teach your children important basic personal finance skills that they can use for the rest of their lives.
Nathaniel Sillin directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.