Quicken, Kids & Money teaches kids money management

Intuit has recently started a new Web-based program called Quicken, Kids & Money. The goal is to provide children ages 5 - 8 with a solid foundation to understanding effective money management — from spending to saving it for long-term goals.

The service costs $99.99 a year (but is available through the end of April for $69.99). For that, parents are mailed a kit that includes pouches the kids can use to start their savings. Parents get instructions for how to access a members-only Web site where they can begin to teach their kids lessons on money management, and kids get access to a special kid-safe online “KidZone,” hosted by the animated characters Reggie (a cash register) and Penny (a coin).

The goal, Intuit’s Denise Labuda told Macworld , is to help children who, at first, may not even understand what money is to understand how to properly use it.

One study, said Labuda — business leader for consumer education initiatives at Intuit — showed that 64 percent of high school students polled failed a basic financial literacy test that probed their skills at saving and investing money.

“People are trying to work on this with their kids, but they don’t always have the right tools,” said Labuda. Primary schools mainly focus on teaching kids how to simply count money — not how to manage it. Only 17 states in the United States have approved state-level curriculum for teaching grade schoolers finance, said Labuda. And because it’s left to individual states to come up with frameworks for learning, state curriculums can vary dramatically.

Before launching Quicken, Kids & Money in March, the company invested a year in developing and testing a pilot program.

“The best place to start is with the parents,” she said. “We want to revolutionize the way that parents teach their kids, beginning with kids ages 5 - 8.”

Older kids aren’t a lost cause, said Labuda, but kids in kindergarten through second or third grade are already learning the basics of counting and understand intrinsically through watching their parents how money is used and what it does.

Quicken, Kids & Money seeks to teach how to earn, save and spend money through real life applications and “recipes,” according to Labuda.

The first step is to put children on what Labuda calls the “Family Payroll.” Start with a small allowance that affords the children with a weekly income. Each child enrolled in the Quicken, Kids & Money program becomes responsbile for managing their own small budget. Four separate pouches allow them to separate money to be spent, shared, put into medium-term savings, or put into long-term savings.

The KidZone Web site provides kids with a basic financial calculator that helps them set up goals for what they want, and how much they’ll need to get it. So if your kid wants a skateboard or a Game Boy cartridge, they can input the description and the amount, and the site will calculate how long it will take to save up for that item. Penny and Reggie will occasionally drop the child e-mails congratulating them on saving, and encouraging them to keep up the process.

What’s more, the KidZone site features a variety of activities kids can participate in to understand more about financial planning and savings. The interface is broken up into five major areas: My Cash, which tracks their savings; My Wants — items they’d like to have; My Sharing, which attempts to instill in kids an interest in charity; My Savings, which shows the kids’ long term savings, and My Report, which provides an overview of the kids’ financial activities.

Similarly, the adult area on Quicken, Kids & Money provides grown-ups with practical advice for how to instill proper money management philosophy into their kids. Article topics include helping decide what sort of allowance to give, how to motivate your kids into saving money, ways to encourage your kids to become responsible for their finances, and coming up with a list of age-appropriate chores. There’s also a chore planning chart that will help you organize what activities your kids need to do in order to earn their allowance including descriptions and frequencies. The site also tracks milestones to help parents give an idea of their family’s progress in developing good money management habits.

“Over time, we hope this process becomes ingrained in the kids’ lifestyle,” said Labuda.