A+ Advice for Parents

Q: My daughters, ages 9 and 10, are earning money doing chores for neighbors such as dog walking, watering plants and redeeming cans. I want to teach them about investing and running a business before they spend it all. Are there apps for that?

A: There are apps and some good books, too. But before teaching them how to run a business, start with savings -- namely, why we save and how.

Educator Gail Karlitz, author of "Growing Money: A Complete Investing Guide for Kids" (Price Stern Sloan, 2010), suggests you begin by explaining the concepts of needs (food, housing, clothes), wants (treats, entertainment, things we like but don't need), goals (things we must save for, such as a new bike), and giving (charitable donations, birthday presents).

She encourages kids to use a clear plastic envelope, box, jar or piggy bank for each category, so "they can see the actual money."

Karlitz also suggests keeping a notebook with a running total of what they are earning, and how they are allocating their earnings in each category.

One website, ThreeJars.com, helps kids track their money in saving, spending and sharing jars. The site shows them the tradeoffs between saving and spending, and allows them to earn interest on their savings jar. (It costs $30 annually.)

You can teach the girls about running a business by drawing examples from their summer. Lead them through questions such as, "What do you need to increase can redemptions?" If the answer is investing in a larger bin to store more cans until making a trip to the redemption center, you can discuss what that costs and if the investment is worth it.

Educational game maker Motion Math has created a couple of excellent apps that simulate running businesses and boost kids' math and reasoning skills, says Warren Buckleitner, the editor of the Children's Technology Review (childrenstech.com).

The "Motion Math: Pizza!" app gives kids a start-up budget to open a pizza shop with customers who must be kept satisfied.

The "Motion Math: Cupcake!" app lets players bake and sell cupcakes and be responsible for making decisions that influence all aspects of the business, from delivering orders to managing costs.

"Even though it's pretend money, kids start to understand that if you blow all your money on sprinkles for your cupcakes, you won't have enough to meet all the customers' needs and you lose money in the end," says Buckleitner.

Each app costs $6 and is available at the Apple Store.

Two books geared to your daughters' age levels can help teach them more sophisticated investment concepts.

"How to Turn $100 Into $1,000,000" (Workman, 2016) offers an easy-to-grasp explanation of compound interest, what the book calls "the most powerful force in the financial universe."

In "Blue Chip Kids: What Every Child (and Parent) Should Know About Money, Investing, and the Stock Market" (Wiley, 2015), author David Bianchi makes sophisticated concepts such as stocks, bonds, analyzing companies, interest rates, net worth and asset allocation understandable.

As you're studying the best books or apps for your kids, take heart: Surveys have shown that 1 in 5 American adults think that hitting the lottery is the best strategy to save for retirement. Your daughters are lucky. They will have no such illusions.

(Do you have a question about your child's education? Email it to Leanna@aplusadvice.com. Leanna Landsmann is an education writer who began her career as a classroom teacher. She has served on education commissions, visited classrooms in 49 states to observe best practices, and founded Principal for a Day in New York City.)

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