Apps train users to make good financial decisions

Apps train users to make good financial decisions

The Great Piggy Bank Adventure uses a board game and simple trivia questions to show examples of wise saving and wasteful spending. Users can earn money, in this case “truffles,” to save toward a long-term goal. (Photo: Michael Snyder/The Desert Sun )

More than half of American adults say they don’t have a budget, according to a survey by the National Foundation for Credit Counseling. One-third say they don’t pay all of their bills on time.

Advocates say more should be done to promote financial literacy among adults and their children. Most teachers agree that students should take a financial education course, but only 11 percent of K-12 teachers have taken a workshop on teaching personal finance, according to a study funded by the National Endowment for Financial Education.

More free mobile apps for kids and adults have popped up in recent years to help spread awareness about basic financial concepts. Learning wise money-making habits should start at an early age, with a financial goal to reach, advocates and financial planners say.

Ted Gonder, CEO of Moneythink, leads a national financial literacy nonprofit founded in Chicago. The nonprofit trains college mentors and pairs them with inner-city youth.

“A lot of people are brought up in situations where they’re not too confident about the topic of money,” Gonder said. “At our organization, for our core premise, money ultimately isn’t an end in itself.”

Encouraging kids, especially those from a low-income family, to believe they can get a job and be financially successful is the most effective starting point, Gonder explained. “Once they have the means, they have to learn how to manage it.”

To reinforce wise decisions outside of the classroom, Moneythink created a mobile app that allows teens to track each saving and spending moment. Anytime they bought an item or saved money, they were encouraged to post a photo to the classroom newsfeed. As a result of the positive accountability, some students took a different route to school to avoid spending money at McDonald’s. Others took photos of shoes they wanted to buy, but didn’t because they decided to save instead.

“Teenagers are incredibly social with their money,” Gonder said. Through one study, “we learned a number of really amazing things. They might not have a computer or broadband at home, but 93 percent have smart phones.”

Mobile apps are one way to start a conversation about money with kids.

Two-thirds of kids say they’ve used an online game about money matters, according to a 2014 survey sample of nearly 1,000 kids by T. Rowe Price, a public investment firm based in Maryland. Almost a third of surveyed parents felt they shouldn’t be the ones to teach their kids about money. Most parents said games were a good way to teach kids, but only 38 percent used digital and online tools for education.

T. Rowe Price and Walt Disney Imagineering created a free mobile app game to introduce basic concepts, such as setting goals, saving and spending wisely and inflation, to kids. The Great Piggy Bank Adventure uses a board game and simple trivia questions to show examples of wise saving and wasteful spending. Users can earn money, in this case “truffles,” to save toward a long-term goal.

“The idea of the app was to get the kids engaged in the topic, that gives parents the opening to talk to their kids about money,” said Stuart Ritter, senior financial planner at T. Rowe Price. “You don’t need to be an expert in price-to-earnings ratios to teach kids to be good stewards of money. At the end of the day, the No. 1 driver of people’s ability to buy the things they want to buy is how much money they saved toward it.”

The first, and most crucial, step is setting a goal, Ritter said. It could be as simple as saving for a video game or a skateboard.

Many kids already have cell phones, or are at least familiar with using a computer and surfing the Internet. Creating a mobile app fell in line with their digital habits, Ritter said.

“All the other decisions you make about money, whether or not to save it or spend it on, all of that can be determined only if you know what the goal is,” Ritter added.

Other free, money-savvy mobile app games for kids include Green Streets: Unleash the Loot! And Thrive ‘n’ Shine. For adults, Mint, Billguard and Planwise are free financial planning apps.

In the Coachella Valley, Integrated Wealth Management in Palm Springs has advocated for more education through its Financial Literacy Initiative, which launched three years ago.

In April — national Financial Literacy Month — financial advisers from the firm taught College of the Desert students about budgeting, credit card debit, planning for retirement and saving for emergency funds. The firm also partnered with the Boys and Girls Club of Cathedral City to teach 15 kids about basic financial decisions.

“Most people understand the value of money, and what it takes to earn that dollar, but people are afraid to make those financial decisions,” said Erin Scott, who manages the Financial Literacy Initiative. “Saving money and spending wisely, those key concepts transcend, no matter whether you have a few dollars or a whole bunch.”

In the fall, senior vice president Reesa Manning plans to teach a free COD seminar, “Learning in Retirement,” for retired women. In this digital age, many more purchases are done on credit, and consumers are racking up debt, Manning said.

“What happens today, as kids, we had to save money in cash,” Manning said. “Now everything’s on a card. Even if it’s in the bank, you don’t have the reality of really making the money, feeling it coming out, you don’t ever touch it anymore.”

Dominique Fong is a business and real estate reporter for The Desert Sun. She can be reached at (760) 778-4661, dominique.fong@desertsun.com and on Twitter @dominiquefong.

Chick this out