NEW YORK _ Does your child think the automated teller machine spits out money to anybody who wants some? Does she say, "Just put it on your credit card?" Does he think Amazon packages just miraculously appear on your doorstep?
How can parents teach kids about the value of money in a world where it's less and less necessary to carry any?
Renee Vitullo, a personal finance consultant from Valley Stream, has two children, Anthony, 11, and Victoria, 7, and she, like other parents, grapples with the challenge of teaching her children about money in an increasingly cashless world. "People should definitely talk to their kids, because there is no other way for them to learn," Vitullo says.
Here are some ways Vitullo and other parents are educating the next generation of spenders and savers.
Bethpage's Liana Calabrese, 6, says she knows what she wants to do for a living when she grows up: be a candy maker. So she's starting now _ and her mom, Krystal, is using Liana's venture to teach her daughter about money.
Liana decided to save up her allowance _ she earns $1 if she empties the dishwasher and makes her bed _ to buy chocolate molds. Dressed in her pink polka dotted apron and hair net, she started making chocolate lollipops this past summer and then sold them lemonade-stand style in front of her house. Krystal, 37, a middle school teacher, posted the sale on the local Facebook page and customers arrived. "All the moms came to support her. She made over $100," Krystal says.
"A lot of the people pay with singles," Krystal says. Mom decided a further lesson about money was in order, so she took Liana to the bank and taught the first grader how to use a deposit slip and put the money into her own bank account. "I showed her where her account number goes," Krystal says. When the bank clerk asked Liana, "Would you like the balance?" Liana replied, "I don't know what that means" and Krystal explained that the clerk was asking if she wanted to know the total money in her account.
Liana used some of the earnings to buy more supplies and has been filling orders from friends and family members for blue Cookie Monster fudge, chocolate-covered strawberries and more. She now has more than $1,000 in her account. Because she's earned the money herself, she's more hesitant to spend it, Krystal says. If Liana wants a doll, for instance, Krystal will explain to her whatever number of lollipops she would have to make and sell to earn that money. "The work is correlating to the money at this point," Krystal says.
Liana agrees. "I do hard work," she says. What is she hoping to use the money for? "A swing set. A whole playground," she says. How long does she think it will take to meet her goal by selling candy, now that she knows what a chocolate lollipop translates to in cash? "I think a long time," she says.
MOM GIVES EXAM AT HOME
Estrella Orellana gave her two teenage sons a choice _ they could either take an at-home class led by her to learn about financial responsibility, or they could take a seminar at a local bank.
They chose the homegrown option.
"I started realizing they hadn't learned in school the things I think are important," says Orellana, 44, a high school science teacher from Farmingdale. First, she created an assessment quiz regarding issues beyond dollars and cents that both sons _ Gabe, 19, a college student, and Nico, 17, a high school senior _ took cold. Orellana tested them, for instance, on what a FICO score is. "I was very surprised they didn't know the difference between a debit card and a credit card," she says.
Then she put together a 45-minute PowerPoint presentation that they had to watch. She also showed them her household budget on an Excel spreadsheet.
"I did it separately with each one," she says of her sons. Afterward, she gave them the same assessment quiz again. "I thought it was very helpful," she says.
HARNESSING AN APP
Adriana Colleran, 14, of Shirley, doesn't carry cash, but that doesn't mean she hasn't been getting educated about money.
"It's always, 'I need money for this, I need money for that,' " Colleran's stepmom, Kylie Stewart, 34, a stay-at-home mother, says of teenagers. So, when Stewart came across an ad on Facebook for the Greenlight debit card for kids about a year ago, she and Adriana's father, Eric Stewart, who works for an environmental services company, decided to give it a shot. Adriana's card looks like any other debit card, but her parents control and monitor it through the app of the same name. Because they load it with money or set limits on how much cash she can withdraw from an ATM, it's got built-in protection from overages.
Parents can designate what category of venue the card can be used at _ say, a restaurant, or a gas station. They get alerts any time the card is used, even when it's declined. Parents can transfer a weekly allowance, add money for accomplished chores, or even add money instantly if necessary.
The kids have their own PIN number (parents can cancel a lost card immediately from the app). They have three categories _ spend, save and give _ into which they can transfer money. They can set a savings goal for a particular item. If parents opt to add a parent-paid interest rate for savings, kids can see the power of compounding interest.
Using the app and card costs $4.99 a month per family for up to five kids.
Says Adriana: "I think I've learned how to spend my money more wisely. My favorite thing is I always have money wherever I go."
AIRPODS AS A LEARNING TOOL
Renee Vitullo, a personal finance consultant from Valley Stream, turned her 11-year-old son's desire for AirPods wireless earbuds into a lesson on money.
AirPods cost about $150. Vitullo, 43, and her husband, also named Anthony, 44, a foreman for National Grid, told their son he would have to save the money himself, and that he would have to save 20% more than he needed so that he would have some money left in savings after meeting his goal. Vitullo gives her children allowances tied to their chores _ Anthony, for instance, earns $10 a week by vacuuming, unloading the dishwasher and helping to carry in groceries from the car. "I don't think we should be handing out kids money for nothing. That's not how the real world works," she says.
During the time he was saving for the AirPods, Vitullo boosted Anthony's allowance to $20 a week to help him out. Giving him the money in cash is important, Vitullo says. "First of all, they can see it, hold it and be able to count it," Vitullos says. "Second, when they buy something, it hurts."
That's why Vitullo also made sure Anthony didn't buy the AirPods online, she says. She had him research which store offered the best price, and then took him there to buy them. "I could see in his face the pain of paying for them," Vitullo says. "Giving cash really does make a difference verses swiping that card. This is a big chunk of money. 'Do I really want these?' Giving that up and feeling that exchange."
Vitullo says Anthony takes very good care of the AirPods, and she thinks that's because he understands now what it took to buy them.
A CLASSROOM APPROACH
Viscel Moore of North Amityville says it's important for her two children, Sean, 14, and Kyra, 12, to learn about financial literacy. Credit: Moore Family
When Viscel Moore heard that the Keep Your Change academic enrichment program in Amityville would be holding a free introductory workshop about financial literacy for teenagers, she signed up her son, Sean, 14.
She says she wanted him to be exposed to financial terms and issues that he doesn't learn about in school. "You're talking algebra and geometry, but financial literacy skills are not taught," Moore says. "These things are vital ... By the time you've learned it, you're in debt."
At the evening seminar, Sean says he learned about compound interest and different types of bank accounts. "I enjoyed it," Sean says. Moore, 49, of North Babylon, who works for the Town of Babylon, says she would love for her daughter, Kyra, 12, to learn as well.
Keep Your Change is planning to expand the offering into a multiweek course, says Kim Harris, director of Keep Your Change, an afterschool program to help children with reading, math and writing. The course might cover how to balance a checkbook, how to establish a budget, getting returns on investments, paying for college, and financing a car, says Dwayne Farris, an economics teacher at North Babylon High School who is working with Keep Your Change to establish a program.
"There's things we're going over that some parents don't know about or didn't know to teach their kids," Farris says.
