MONEY Kids and Money

Shark Tank for Kids: This Game Delivers the American Dream

A cattleman from Peoria, IL gets a second chance to show the Sharks what he's learned about his gourmet meat business since his Season 4 visit to the Tank.
Kelsey McNeal—ABC

Educators are using reality TV as a model for teaching kids about money. Here's why it works.

As part of his middle school history and civics classes, James Kindle incorporates a segment on money. He calls it Shark Tank after the popular TV show, and while the idea is to introduce personal financial concepts and entrepreneurship what Kindle believes he really teaches is how to achieve the American dream.

Just like the competitors in the TV show, Kindle’s students must come up with a business idea, write a proposal, and pitch the concept to teacher “investors.” He’s a pretty good pitchman himself. Bringing financial education alive through his Shark Tank program at Sullivan Community School in Minneapolis, Minn., earned Kindle first place in the PwC Financial Literacy Innovation Challenge and a $50,000 prize for his school.

“I want to give my students a taste of this dream, while teaching persuasive language, entrepreneurship, and financial literacy skills,” Kindle wrote in a request for funding. In an email, he added “while it might be awhile before my students are meeting with investors and venture capitalists to fund their business ideas, it won’t be long until they are presenting at science and history fairs, competing in speech and debate, or meeting with college admissions officers.” So his program teaches presentation skills, too.

As one of the judges in the PwC Charitable Foundation contest, I can say that what resonates in Kindle’s program is the game-based approach to a difficult subject, along with the infusion of popular culture to make the experience relevant. These were common traits of all top finishers. The results suggest to both parents and educators that they would do well to keep the principles of fun, hands-on, and timely instruction in mind when trying to teach young people about money.

Second place went to a history and civics class at Lawrence County High School in Moulton, Ala., where they play Biggest Loser, also modeled after a popular TV show. Students visit “exercise stations” where they choose a loan or credit card or make some other decision to help them lose “weight” (debt). Who knew reality TV could serve a purpose? Other finalist programs were organized around things like how much various careers pay, and everyday saving and spending decisions.

“Mr. Kindle’s Shark Tank lesson bases financial literacy around core values and behaviors versus facts and figures in order to teach skills like persuasion, negotiation and ownership,” says Shannon Schuyler, PwC corporate responsibility leader. “The idea was contagious, authentic and, most importantly, fun.”

Interestingly, this contest’s winners are taking bows even as educators around the country wrestle with the role of play in learning. With today’s focus on formal education, kids are being asked at earlier and earlier ages to put away the blocks and listen to their teachers lecture. Yet some researchers say this “head start” may backfire. Rebecca Marcon, a psychology professor at the University of North Florida, found that pre-school students allowed to learn through play earned significantly higher grades in the third and fourth grade. With financial education, especially, most experts agree that a game-based approach works best.

One study found that when good instruction is paired with high-quality digital games there is a 12% jump in cognitive learning outcomes. The game-oriented H&R Block Budget Challenge has produced evidence that this type of learning significantly improves financial know-how. Says Kindle: “Using games always increases student engagement. An activity that seems mind-numbingly boring, when slightly twisted into a game, suddenly becomes thrilling.”

Relevance and timeliness are also important. Modeling programs after Shark Tank and Biggest Loser gave students an instant touchstone. At home, parents trying to make a financial point might choose an opportune moment—perhaps when their teen is getting an iPhone upgrade, which means more to them than the incremental cost of your adjustable-rate mortgage as bond yields tick higher.

Understanding personal finance isn’t just a way to make ends meet. As the enterprising middle school teacher from Minneapolis might say, it’s how you achieve the American dream.

Read next: Kids and Money: The Search for What Really Works

MONEY Kids and Money

How New College Grads Can Beat the Tough Job Market

Paul Bradbury/Getty Images

The career expectations of college grads may be overoptimistic. But these strategies can boost their odds of landing a job.

As another crop of college graduates frame their diplomas, another dose of reality is about to set in. The financial crisis may be ancient history for this group, most of whom were still in middle school when the market began to plunge. But the effects linger—and new entrants to the job market may be surprised at how difficult it is, even now, to move ahead in this economy.

Eight in 10 new graduates expect to have a job in their field within a year, with more than half expecting to land one within two months, according to an analysis from Upromise.com, a college savings website. That jibes with research from Accenture, which found that 80% of the Class of 2015 say their education prepared them well for the workforce. Yet here’s the reality: 49% of graduates from 2014 and 41% from 2013 report being underemployed (having no job or one that does not require a college degree), Accenture found.

Meanwhile, just 15% of this year’s graduates expect to earn $25,000 or less in their first job. But almost three times that many from the classes of 2013 and 2014 report that level of income. So for entry-level job seekers, it’s still surprisingly tough out there.

Despite their upbeat expectations, most new grads do have a fallback plan: Mom and Dad. About half expect to be financially dependent on their parents for two years after graduation, and they are prepared to move back home and pay rent, Upromise found. This won’t surprise their parents. Nearly a quarter of 25- to 34-year-olds lives with parents or grandparents, up from 11% in 1980, Pew found. This failure to launch is so widespread psychologists have given it a name: emerging adulthood. The share of parents that expect to support their college graduates for two years or more doubled to 36% this year, according to the Upromise analysis.

Why, then, is this class of graduates so optimistic? First, optimism is rightfully a trait for the young, and Millennials possess it in staggering proportions—probably because they were raised by helicopter parents who constantly extolled their greatness and rewarded them with trophies for showing up. But more is at work here. The economy has been growing since 2009, when this class was taking the SATs. In their college years, this group has known only rising stock prices and an improving jobs and housing market. Consider: through four years of higher education the S&P 500 rose 2%, 16%, 32% and 13%. Even for the uninvested, that’s an encouraging backdrop.

This optimism may also spring from the Class of 2015’s improved career preparation. Accenture found that 82% considered the availability of jobs in their field before choosing a major. That’s up from 75% in the Class of 2014. To minimize student debt, more from this class also started at a community college. And—a crucial step—some 72% of this year’s class had an internship or apprenticeship while in school, up from 65% of graduates the year before.

This is all smart planning. More than half who took part in an internship said it led to a job, Accenture found. At the Intern Group, 88% of those who take part in an internship find work at a graduate level job within three months and 95% say the program was good for their career, says David Lloyd, the firm’s founder. Still, it seems we’ll be talking about the Great Recession a while longer.

Read next: The Costly Career Mistake Millennials Are Making

MONEY financial advisers

The 3 Biggest Money Worries of First-Time Parents

first time parents
Ashley Gill—Getty Images

Good news, explains a financial planner: They're easily addressed.

Over the last 13 years I’ve worked with countless millennials preparing to embark on their journey to parenthood. First-time parents are concerned about many things, starting with feeding their newborn, keeping the little one healthy, or just sleeping through the night (for both parent and baby).

Amid the whirlwind of emotions a single parent or couple may go through leading into the birth of their first child, I’ve found that first-time parents all find themselves confronting the same three financial questions:

  1. How will we afford this baby?
  2. How will we pay for college?
  3. What if something happens to us?

As a financial adviser, I often find myself counseling first-time parent trying to process it all. The great news is that all three of these questions can be answered with a little bit of planning.

1. How will we afford this baby?
You can count on new and unexpected expenses with your little one on the way. Many of my new-parent clients have found that three of the most significant expenses in the first year are daycare, diapers, and baby food. By increasing your monthly contributions to a liquid investment savings account, you can get a head start on changing your spending habits and begin to prepare for costs you know are coming.

2. How will we pay for college?
College is getting more expensive every year. If you want to put your money to work, start saving early and take advantage of time and compound returns. A 529 college savings plan offers you 100% federal tax-free growth for qualified higher-education expenses. (State tax advantages vary from state to state and may depend on whether you are a resident of the state sponsoring the plan.) As the parent, you retain complete control of the assets. To help bolster their child’s college fund, many parents encourage family and friends to contribute to their child’s 529 plan instead of giving toys or other presents for major events like birthdays and graduations.

3. What if something happens to us?
It probably isn’t going to hit you in the first trimester, or maybe even the second, but it’s a realization so many parents reach by the time their newborn comes home to the nursery: What if something happens to us? Most new parents have never had to sit down and plan for contingencies like death. But the moment you have someone depending on you — both financially and emotionally — for the next 20-plus years, it hits you: “I need a plan.” For many, this plan has two major pieces that ultimately answer two questions:

a. Who will take care of my baby? An estate planning attorney can help you gather information and consider some important issues designed to protect your family. Through your estate plan you can dictate guardianship instructions for your baby, control over the distribution of your assets, and medical directives.
b. Who will pay all my baby’s expenses? Life insurance can provide your child, or your child’s guardian, with a lump sum payout upon your death. Term life insurance is typically the least expensive, and thus the most common, option; you pay a set amount each month over a certain number of years, and in turn are guaranteed a death benefit should you die during that term. The policy’s lump sum payout can help your beneficiaries cover the costs you would have otherwise paid.

By starting your planning early, you can set aside the extra cash you’ll need when your family’s newest addition arrives, split the college bill with your old pal “compound returns,” and prepare for the unthinkable. Once you have these pieces in place, you’ll have your mind clear to focus on what is most important — your family. (And your sleep.)

Joe O’Boyle is a financial adviser with Voya Financial Advisors. Based in Beverly Hills, Calif., O’Boyle provides personalized, full service financial and retirement planning to individual and corporate clients. O’Boyle focuses on the entertainment, legal and medical industries, with a particular interest in educating Gen Xers and Millennials about the benefits of early retirement planning.

MONEY Kids and Money

Why Mothers Know Best About Money

150507_FF_MomKnowsBest
Jamie Grill—Getty Images

Eight in 10 Americans say they learned something about money from Mom. That's good, because Dad may have been a tad overconfident.

Moms deserve a lot of credit for the things they teach kids about money, and with Mother’s Day this weekend what better time to celebrate their financial tutelage? More than eight in 10 Americans say they learned something about money from their mother, a new survey shows.

The chief overall lesson: live within your means. That motherly wisdom was cited by 55% in the survey from BeFrugal.com. The same percentage said she taught them the difference between a want and a need. Some 44% said Mom emphasized the importance of being self-sufficient. Mom also taught them how to shop wisely: 67% said she taught them about sales, and 57% said she taught them about coupons.

These findings jibe with other research on the subject. A few years ago, TD Bank found that in many families Dad doles out allowance and oversees big purchases, and that Dad tends to be the most confident about money and most interested in results. Meanwhile, Mom is most interested in the kids’ money learning process and the day-to-day aspects of financial management.

Mom’s softer approach to money lessons probably stems from motherly wisdom in many areas. Life lessons like “don’t be late” and “practice, practice, practice” and “don’t be afraid to ask for help” and many others have direct application to the money world. After all, it’s sage advice indeed to never make a late payment and to seek advice on complicated money matters.

Given the financial mistakes that many parents have made—poorly managing credit cards, for example—some argue that young adults would do better to skip parental advice altogether and find a financial adviser or third-party online advice. But the best advice is probably to listen to both Mom and Dad. They often see financial matters differently. That’s natural—opposites attract. And through discussion and compromise, your parents probably run the household finances better together than either one would alone.

That’s good since kids—and even young adults—seem to depend on both Mom and Dad for financial advice. Two surveys last fall, one by Fidelity Investments and the other by TIAA-CREF, show that Millennials seek out their parents more than anyone else for financial guidance. Fidelity identified parents as their top choice for trusted money advice. TIAA-CREF found that 47% view their parents as especially influential in money matters.

So here’s to all the moms out there, imparting financial wisdom in ways only they seem able—and for being an important counter balance to all the fathers with misplaced confidence in their own money skills. Several studies have shown that women make better investors. But let’s give a nod to dads too. Embracing risk and a focus on results have their place, and the balance that both parents produce may be the best lesson of all.

Read next: What Dads Can Do to Really Help Mom This Mother’s Day

MONEY Kids and Money

How to Save on Your Kid’s First Cell Phone

Children are getting phones at younger ages than ever. But the earlier you give in, the longer you'll be paying wireless bills.

When Dallas mom Jan Valecka’s twins hit that contentious tween age, the rite of passage she dreaded most was a relatively new one: when to get them cell phones.

“They were starting to see all their friends get smartphones and iPads,” says Valecka, a financial planner at her own firm. “They started lobbying hard.”

She caved when they started 5th grade and got them basic cell phones. The boy-and-girl twins are now 13 and in 7th grade. Their upgrade to smartphones costs Valecka about $75 a month each.

Valecka is hardly alone in dealing with the emotional and financial consequences of giving kids smartphones. A quarter of U.S. 8-and 9-year-olds now have them, according to the 2015 Parents, Kids & Money survey by Baltimore money managers T. Rowe Price. And a new study from Pew Research Center discovered that only 12% of American teens age 13 to 17 do not have a cell phones of any type.

To make the correct call, though, do the math to be sure you are ready for far-reaching consequences. After all, it’s not just a one-time purchase that parents are agreeing to, but a stiff monthly charge that could last for many years to come.

If you get your 12-year-old a plan that costs, say, $50 a month, that will set you back $4,200 though age 18. And that’s not even including any ancillary costs like equipment and upgrades, repairs and app purchases. Data overages, especially if your kids are heavy video watchers, could inflict significant extra damage.

Indeed, 23% of households report paying much more for their kids’ phone plans than they originally expected, according to a study by the National Consumers League.

That doesn’t have to be the case if you are thoughtful about how your decisions will affect household finances. Here are some suggestions:

1. Start with baby steps

A basic cell with phone and texting capability can be very reasonable indeed; Sprint, for instance, offers a WeGo starter phone for only $9.99 a month.

There are also prepaid plans available, with varying restrictions on minutes and data, and low-cost handsets. T-Mobile, for instance, offers a $40-a-month prepaid plan with unlimited talk, text and data on its own network, and 1 GB of nationwide LTE data. With hard limits in place, parents are essentially saving themselves from any unwanted bill surprises.

Consider it something of a trial period: If your kids prove responsible with their new gadgets, and aren’t constantly calling or texting their buddies late into the night, then you can talk about graduating to more elaborate phones and plans.

When you are all ready, every major carrier offers a version of a family share plan, like Verizon’s More Everything and AT&T’s Mobile Share Value. Additional lines cost less money than standalone packages, but contracts are often involved.

At that point the training wheels are off—and if you are sharing your family data package with your teenager, be prepared to blow through some usage limits.

2. Have the money talk

“The question that must always be discussed is, ‘Who will pay for what?'” says Mark La Spisa, a planner with Vermillion Financial in South Barrington, Illinois. “It’s critical to talk about it in advance of a child receiving their first phone.”

For an 8- or 9-year-old, it is unfair to expect anything beyond a token contribution. But teens who have their own income from part-time or summer work can start chipping in to cover part of the bill.

Also consider who the phone is really benefiting. If it is mainly for the parents’ peace of mind, that’s one thing. But if it is only for their enjoyment, and parents are not deriving any benefit at all, then “then they should be footing the bill,” says personal finance expert Gail Vaz-Oxlade, author of Money Rules.

3. Resist the lure of the constant upgrade

For her own kids, Vaz-Oxlade pays the bills, because she wants to get in touch with them. But she draws the line at hopping on the “hamster wheel” of getting them the latest-and-greatest gadgets on the market. That’s just throwing away money, in her opinion.

As a result she, her son and her daughter are all still using trusty iPhone 4s they got a few years ago.

MONEY Kids and Money

4 Important Lessons to Teach on Take Your Kids to Work Day

Girl on phone in medical lab office
Stanislas Merlin—Getty Images

On the fourth Thursday of April, working parents all across America take their children to work with them so they can see what Mom or Dad do for a living.

April 23, 2015 marks the 22nd year of ‘Take Our Daughters and Sons to Work’ Day.

Some companies have organized activities for their young visitors; others have little or no planning. Regardless of how things work at your office, you can use your workplace to teach kids about the value of money.

Of course, your lessons must be age-appropriate. It’s difficult, if not impossible, to teach your toddler about the stock market, and older children will be bored with simplistic discussions. With that in mind, here are a few ideas that can spur your thinking on appropriate lessons for your kids.

Salary – You can give younger children an analogy of worth and value by equating your work time to money and purchases. Give them a frame of reference by how much of your work time it takes to buy an ice cream cone or a bike.

Beware of two unintended consequences — make sure your children do not think that just because you work a certain amount of time they will get an ice cream cone or a bike, and make sure they understand that your salary is private. You do not want them relaying their newfound information to everybody they meet in the hallway or the elevator.

Profit – If you work in a manufacturing environment, you can show your children the products you make and talk about profit in general — how it takes money to make the products and how your company has to charge more to be able to pay employees and stay in business. Make the discussion age-appropriate and do not use actual company numbers unless you’ve cleared it with your manager (and even then, it’s not a good idea to be specific).

You can extend the profit discussion to retail jobs as well. It may be harder to illustrate in an office environment, but it’s not impossible to do so.

Sales – If you’re in a retail environment, you may be able to show your children how transactions take place. When ringing up a customer’s cash purchase, you can go over basic math skills with younger children by letting them “help” you make change and hand it out to the customer. You can engage your older children with discussions about credit cards and debit cards — how they work, what the difference is between the two, and pros and cons of each.

Taxes – If you can keep out your own biases (and we all have them), you can teach your kids about taxes. For example, in the retail environment, you can explain why the customer pays more than the price on the price tag because of taxes, where the tax money goes, and how it’s spent.

Take Our Daughters and Sons to Work Day isn’t for everybody. If your workplace is hostile to the idea, you don’t think you can pay sufficient attention to your child and still do your job, or you can’t keep them from disrupting the office, then don’t participate. A bad experience at the office is worse than no experience at the office.

However, you should spend extra time with your children later on and talk to them about what you do at work. You can use that time for teachable moments about money. They may not pay close attention or seem to appreciate the effort now, but as they grow up, you’re more likely to see the fruits of your efforts. Take the extra time to teach your kids about money, and they’ll reward you by staying out of trouble (and out of debt) with their good money-management habits.

MONEY Taxes

How Your Kids Can Help Cut Your Tax Bill

father with son at daycare
Sandro Di Carlo Darsa—Getty Images A little bundle of potential tax breaks.

As you rush to finish your tax return this year, don't overlook the ways your children (or grandchildren) can save you money.

As a busy parent, you may feel fortunate just to finish your income tax returns by April 15, let alone find the time to investigate ways to reduce your state and federal income tax bills

But devoting a few extra minutes of your precious time to these potential tax breaks could save hundreds or thousands of dollars on what you owe to Uncle Sam for 2014, as well as in the years to come.

1. Think Broadly About Who Depends on You

Each dependent you declare on your 2014 tax return can reduce your taxable income by $3,950. In the 25% federal tax bracket, that’s a tax savings of almost $1,000. And the IRS allows a broader scope of this definition than what you might imagine.

The dependent must be a U.S. citizen or resident and can’t be declared as a dependent by anyone but you. He also can’t file a joint tax return with someone else (i.e. the dependent’s spouse).

Children have to be related to you via birth, adoption, “step-” status, or under certain types of foster care. Children of all of these people (i.e. your grandchildren) may qualify as your dependents as well, if the other standards are met.

Qualifying dependents usually have to live with you for at least half of the year, and be under age 19 (age 24 if they are full-time students). Although they can earn money, you have to provide at least half of their support.

2. Make Sure Your Child Has a Social Security Number

With the child tax credit, you can reduce your tax bill by as much as $1,000 for every child under your care who was under age 17 at the end of 2014—if you meet a few conditions.

You must be able to claim the child as a dependent, and she can’t have provided more than half of her support. She also must have lived with you for at least half of the year.

Last but not least, she must have a federal taxpayer identity number (usually the child’s Social Security number), so this is a good motivator for parents of a newborn baby to get going on that process as soon as possible.

Your ability to claim this credit may also be limited by your income. For married couples filing jointly, the credit starts to be phased out when modified gross income (MAGI) hits $110,000 ($75,000 for single filers).

Also, you have to file form 1040, 1040A, or 1040NR to receive the credit—using the 1040EZ form won’t cut it. For more information download Publication 972 and Schedule 8812 at IRS.gov.

3. Don’t Overlook Any Helpers

The child and dependent care credit delivers another big tax cut to parents who work outside of the home and pay someone to care for children who were age 12 and under at the end of the tax year. Money paid to caregivers who are your spouse, the child’s parent, a dependent of yours, or your child is not eligible.

The limit on qualifying expenses is $3,000 for one child, and $6,000 total for multiple children. The tax credit ranges from 20% to 35% of the qualifying amount, depending on your income.

The expense can’t exceed the lesser of your (or your spouse’s) earned income. If you withhold any pre-tax funds from your paycheck to a dependent day care flexible spending account, you must use any tax-free distributions from that account against the $3,000/$6,000 limits of the tax credit.

Best of all, as long as your situation meets the aforementioned criteria, you can include last summer’s day camp expenses in the total, even if the camp focused on a particular athletic or skill development. Unfortunately, overnight camp costs, summer school, and tutoring expenses don’t qualify.

For more information download Publication 503 (Child and Dependent Care Expenses) at IRS.gov.

Kevin McKinley is a financial planner and owner of McKinley Money LLC, a registered investment advisor in Eau Claire, Wisconsin. He’s also the author of Make Your Kid a Millionaire.

MONEY Taxes

What Happened When I Did My Taxes With My 10-Year-Old

What I learned about my kid—and what she learned about money—when we filled out the Form 1040 together.

This past weekend, I asked my 10-year-old daughter Lucy to help me do our family’s taxes. She read off from my W-2 and our 1099 forms as I filled in the boxes on the tax prep website we use. This meant, of course, that she got to see exactly how much her parents earn.

I expected that this was going to feel like the Big Reveal of a closely guarded secret. As I probably should have known, the numbers at first meant nothing to her. Annual incomes are an abstraction to a kid who has never written a rent check.

The real talk came a couple of days later, when Lucy and I had a chance to look over the actual 1040 I sent to the IRS, and I could show her how it all fit together. I’m glad we did that.

Before I get that to that conversation, though, a word about why I decided to do this. I was inspired in part by New York Times columnist Ron Lieber’s case for telling your children what you make. As Lieber points out, kids have a knack for figuring this out anyway. And showing them how you handle money—even when (believe me) you are far from perfect at it—can be a first step toward showing them how to be competent with it themselves.

I was also motivated by a more cranky-old-man impulse: I’ve been surprised by the number of young adults I meet who don’t know how to do their own taxes. To me, knowing how to fill out a 1040 is a just a basic life skill everyone should have by 18. I know this is more sentimental then reality-based. After all, I also put driving a stick shift in this category. And for years I’ve been farming out the hard work of my own taxes to the H&R Block website. (Thanks, AMT.)

Still, I remember that I was in the eighth grade, our teacher Sister Loretta had students fill out 1040s using mock W-2s as a math exercise. She was cracking the door on the adult world a little bit wider. Kids are always eager for those peeks, and when they get one, they seem especially open to learning. And talking.

For me and Lucy, the tax talk turned into one of the most impressively grown-up discussions we’ve ever had. She saw what we make, and I tried to put that in the context of what other Americans earn. She also saw what we pay, and so then we turned to where that money goes and what it’s used for. I tied the conversation in to a news story I read that day, about legislation in Kansas that would bar families on public assistance from spending that money on a long list things, including casinos, but also movie tickets and trips to the swimming pool. We talked about why some families need financial help, and why people have such strong opinions about that.

Lucy doesn’t need me sharing her nascent political views with the world, so I’ll just say that she surprised me (the way kids do) with her insights about what’s fair and about the choices people should have. Her ideas seemed too thought-out for her to just be parroting back what she guessed I’d like to hear. So I learned something about my daughter. And my wife and I also had a chance to articulate some of the values we are trying to pass on to our kids.

Lucy also asked a simple but very good question about our own money: “So this is how much you made, but how much do you have?” The distinction between making money and actually having any is an important one, and these days in our family we are frankly doing better on the former than the latter. Turning from our income tax forms to our savings, I was able to at least hint at some of the tricky choices her mom and I are trying to juggle.

Lucy didn’t get a “wow” moment of understanding from this, but I think I laid the groundwork for future discussions of things we have to be realistic about. Like how we’ll pay for Lucy to go to college, and where she’ll be able to go. And why (to hit on a question that’s really on her mind) she still has to share a room with her little brother.

I was able to have this conversation from a standpoint of some comfort. For a lot of parents, opening up about money means talking about losing a job, or how they’re dealing with a foreclosure, or how they’re going to buy the groceries this week. Those are much tougher things to talk about. But starting from where we are, and knowing we’ll have some ups and downs in the future, I think I’m glad that for my daughter this part of real life is already a little less mysterious.

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