Today on The Mag we have John Lanza, financial literacy expert, creator of The Money Mammals, author and father of two. Learn more about John and his business, the biggest misconceptions about kids and money, the three core money-smart skills to teach our kids and much more!

We're so happy to talk with you! Can you start by telling us a little about yourself and how you started The Money Mammals?

Soon after our older daughter was born, my wife and I asked ourselves, “How can we make sure she’s good with money?” Though neither of us was in finance, we knew money smarts mattered for a happy life. And, in the end, isn’t that — a happy, fulfilling life — all we want for our kids? Of course, oodles of money won’t make you happy, but a lack of money is guaranteed to cause you suffering.

I had a lot of experience producing shows and marketing to kids. I worked on compelling content designed to entertain and to prime consumption. In the case of shows, we did this covertly. With brand marketing, the goal was crystal clear: Sell more product. My wife and I found nothing out there designed to get kids excited about saving or charitable giving. The little research that existed at the time — and our intuitions — suggested that kids could and should learn about money early.

We created The Money Mammals to scratch our itch. We figured we probably weren’t the only parents who wanted their kids to consider something other than spending when they thought about money. We were right. I’ve yet to run into a parent who doesn’t want to raise a money-smart kid.

How many kids do you have? What ages?

Our girls are now 17 and 15. We have continued to scratch that itch and have expanded our program beyond elementary school-age kids. I realized that though The Money Mammals were very good at getting kids to “Share & Save & Spend Smart,” we all learn by doing. An allowance is the tool parents can use to help — to get money into children's hands to practice.

We developed an allowance program that grew with our kids and helped them learn to become more responsible with money as they entered their tween and teen years. I incorporated my own experience, the latest research in financial literacy and the growing literature about how we can best use money to shape our ability to live happy, fulfilling lives.

Your mission statement is “Help parents raise money-smart kids.” What do you think is the ideal age to start talking about money/allowance?

Parents can start an allowance program when their kids are as young as five. But that doesn’t mean they shouldn’t be giving children money practice earlier. Let your three- or four-year-old purchase items on your store trips (with money you give her specifically for this purpose). You can even do it as a separate transaction from your own so that she engages in the money exchange. You’re introducing her to the language of money and letting her see something more than a swipe.

More important than the allowance logistics, though, is knowing why an allowance matters. What purpose does it serve? An allowance is a tool to help your kids learn money-smart skills. It also allows you to begin an ongoing conversation about money. Allowance programs help break down the taboo that families shouldn’t openly discuss money.

So many other parents have mirrored my experience. When you start an allowance, you begin to have conversations you would never have had because your kids now literally have “skin in the game.” Their allowance becomes their money, and when their money’s on the line, they’re all ears.

What are the biggest misconceptions you see from people about kids and money?

Parents shouldn’t worry if they haven’t started a program, even if their child is six, seven or a teen. You can begin at any time.

Also, you don’t have to tie chores to an allowance. I get why parents feel this way — they think an allowance is a handout and that kids must earn money through hard work. I think that’s a fundamental misunderstanding of the roles that allowances and chores play.

Allowances and chores are tools to teach different lessons. A chore shows a child that work is often required to earn money. An allowance helps a child get comfortable with money. It also empowers kids with their own money. They make choices and learn both by having successes (for example, saving for goals) and making mistakes (for example, buying toys they play with once).

Once parents understand that an allowance is a tool and not a handout, they typically realize that they don’t need to require chores to be tied to it.

What are your top three tips for instilling financial responsibility in kids?

I’d like to reframe this question and explain the three core money-smart skills to teach our kids from a very young age (even before they turn five).

The first core money-smart skill is distinguishing between needs and wants. We’d like our kids to recognize that it’s ok and natural to want, but things can’t make us happy in the long run. This lesson can only come from experience.

I suspect that most people reading this have the basic needs covered — clothes, food, shelter — so my concept of needlets, or conditional needs, might be helpful for parents when teaching this money-smart skill.

The second core money-smart skill is setting and saving for goals. Rather than trying to teach kids to “save for a rainy day,” an abstract concept that they generally translate to, “My money has been taken away,” we can help them use their money to buy things they want but for which they don’t yet have the funds. Setting and achieving goals is a powerful life skill and a more effective way for a young child to learn that delayed gratification can indeed be gratifying.

The third core money-smart skill is making smart money choices. Any time we receive money, we’re making choices about it. Whether we plop acquired cash into our wallets to spend or automatically save a portion of our paychecks, we’re making choices. The more intentional we can be about these decisions, the better. For example, when we set up three jars for allowance and require our kids to put a portion of their money into the Share jar for charitable giving, that means they can make donations when the time comes. We also teach them that charitable giving is an act our family values.

You work with parents and credit unions. How does your work differ for these two very different groups?

We began working with credit unions because we share core values. Providing financial literacy learning for their members (customers) is the fifth of credit unions’ seven core principles. We help credit unions connect with parents and families to raise money-smart kids through our content ecosystem. Our program includes games, apps, videos, books and more. We also provide these institutions with educational materials to make an impact in local schools.

You recently launched a new workshop for parents. Can you tell us more about the workshop and any other plans for your brand?

I’ve always loved to teach. When I was younger, I was a camp counselor and, eventually, a program director. I also coached my kids’ soccer teams for years. My recent book, The Art of Allowance, was just a series of lessons from which parents could create a system to help them raise money-smart kids.

I’ve been fortunate to experience some transformational online courses, like Building a Second Brain and Write of Passage. I brought what I learned as a student in those courses to the participants in my new Art of Allowance Academy.

As I did, the first cohort of parents discovered that the magic of live classes happens when the students interact and share. You get to meet other parents going through what you’re going through. You also learn that you don’t have to be an expert to raise money-smart kids — anyone can do this. I’m so excited about continuing to improve this course, reach more parents and build a community of folks excited about raising the next generation to become money-empowered.

Where do you go for inspiration on the web and in real life?

I read and write a lot — research and books about financial literacy, motivation, happiness and the human condition. I read to collect ideas and write to organize my thoughts. Plus, I have a fantastic team of folks that help me bring my visions to life.

What are your three favorite parent-related small businesses?

I hope you don’t mind if I take a different approach here — three relevant books that I think your readers might enjoy:

Your Money & Your Brain by Jason Zweig (How we’re our own worst enemies when it comes to money and what we can do about it)
The Opposite of Spoiled by Ron Lieber (So many useful tips and tactics for parents to raise money-savvy kids)
The First National Bank of Dad by David Owen (A beautifully written example of one family’s financial literacy approach) If you’d prefer audio, listen to my conversation with David Owen on The Art of Allowance Podcast.

And finally, where can we find you?