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Mortgage Rates Today, Sept. 30: Little Change, Pending Sales Dip

Thirty-year and 15-year mortgage rates held steady, while 5/1 ARM loan rates slipped a hair, according to a NerdWallet survey of mortgage rates published by national lenders Friday.

Mortgage Rates Today, Friday, Sept. 30 (Change from 9/29) 30-year fixed: 3.60% APR (NC) 15-year fixed: 3.01% APR (NC) 5/1 ARM: 3.50% APR (-0.01) NAR: Pending home sales retreat

Pending home sales retreated in August for the third time in four months and to their lowest level since January, according to the National Association of Realtors.

A shortage of existing homes for sale prompted NAR’s Pending Home Sales Index to fall 2.4% to 108.5 in August from a downwardly revised 111.2 in July — the second-lowest level this year after January (105.4).

The NAR index is based on signed real estate contracts for existing homes, with 100 representing average activity in 2001, the first year to be examined.

“Contract activity slackened throughout the country in August except for in the Northeast, where higher inventory totals are giving home shoppers greater options and better success signing a contract,” NAR chief economist Lawrence Yun said in a news release. “In most other areas, an increased number of prospective buyers appear to be either wavering at the steeper home prices pushed up by inventory shortages or disheartened by the competition for the minuscule number of affordable listings.”

NAR warned that a lack of new home construction, which has long hampered many metro markets, could derail housing’s recovery, especially as we head into the slower sales season. Even more worrisome: Housing inventory has declined year-over-year for 15 straight months, and existing-home prices have jumped year-over-year for 54 consecutive months, NAR said.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

More from NerdWallet How to refinance your mortgage Compare mortgage refinance rates Find a mortgage broker

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearns.

Ask Brianna: Will I Ever Be Able to Afford a House?

“Ask Brianna” is a Q&A column from NerdWallet for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna@nerdwallet.com.

This week’s question:

Affording a house seems out of reach. Will I ever be able to buy a home of my own?

I’ve asked myself this question too many times to count, maybe because I know homeownership wasn’t always so hard to achieve. My parents bought their three-bedroom house on Long Island in 1978 for $46,000, or $169,782 in today’s dollars. My dad was a truck driver, and my mom was an artist, both in their late 20s.

Now, nearly 40 years later, I’m also in my late 20s, but I drop off a rent check each month instead of making a mortgage payment. First-time homebuyers are four years older than they were in the late 1970s and rent longer before buying, according to research by real estate website Zillow. Median incomes for first-time buyers didn’t change much between 1978 and 2013, but the median home price for that group went up more than $40,000.

So here we are, fellow 20- and 30-somethings, eager to buy homes but unable to afford them.

It’s not your imagination. The most recent data for median existing home prices shows they reached a new high of $244,100 in July, according to the National Association of Realtors. Low interest rates have kept monthly mortgage payments affordable by historical standards, says Jonathan Spader, senior research associate at Harvard’s Joint Center for Housing Studies, but higher home prices make it tougher to cobble together a down payment.

That’s especially true when student loan payments and high rents drain our bank accounts. A record 21.3 million renter households allocated more than 30 percent of their pretax incomes toward housing in 2014, reports the Joint Center for Housing Studies, a 44 percent increase from 2001.

While you don’t need to own a house to be happy, many of us still want a place we can be proud of. It’ll take some creativity, but it is possible to buy a house someday. Here’s how.

Save longer

If you want to settle in an expensive area long term, you’ll have to save diligently and feel comfortable waiting longer to buy, which is what I’m doing. A down payment averages 24 percent of the home’s purchase price in high-priced locations, according to real estate data firm RealtyTrac. That makes the down payment one of the biggest hurdles to overcome if you’re angling to live in a competitive market, where mortgage lenders look for more money down as an indication that you’re an attractive buyer.

Sock away a portion of your annual bonus from work, or increase the amount you save whenever you get a raise or quit subscription services you don’t use. Set up an automatic transfer into a savings account designated for your down payment so it grows without much effort.

Look into first-time homebuyer programs

Those strategies might not be enough to reach your down payment goal. If you’re eager to buy a house soon, government-sanctioned companies Fannie Mae and Freddie Mac will let you make a down payment of just 3 percent of the home’s price. The Federal Housing Administration also offers mortgages that require down payments of 3.5 percent. Local housing counseling agencies can tell you what programs you qualify for and whether down payment assistance is available in your area, Spader says.

You’ll need to weigh the trade-offs of a smaller down payment. You’ll pay mortgage insurance if you put less than 20 percent down, for instance, which increases your monthly mortgage payment. A mortgage calculator can help you figure out what monthly payment you can afford.

Search in affordable locations

You might be able to have your long-awaited housewarming party sooner than us coastal dwellers — without stretching your budget to its limit — if you live in or move to a region known for its affordability.

A September 2015 report by real estate website Trulia found that eight of the 10 most affordable cities for homeowners were in the Midwest, for instance, while seven of the 10 least affordable cities were in California. The median home price in the Midwest was $194,000 in July, according to the National Association of Realtors, about $50,000 less than the national median.

Lower prices mean lower down payments and a mortgage that won’t take a huge chunk of your income. Living in a lower-cost area isn’t the right choice for everyone, but it’s an option if you’re ready to put down roots sooner than a higher-priced city will allow.

Brianna McGurran is a staff writer at NerdWallet. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe.

This article was written by NerdWallet and was originally published by The Associated Press.

Help! I Can't Pay My Credit Card This Month

When you’re not sure if you can pay your credit card bill each month, it can be excruciating just to look at your statement. When this happens, your total outstanding balance will jump out at you, and even the amount of your minimum payment can cause your pulse to race.

If you are having trouble paying your credit card bills, there are some positive steps you can take to meet your obligations while protecting your credit history.

Payment Shortfalls

When people talk about having difficulty paying their credit card bills, they could be referring to one of two different problems. About half of all American credit card users always avoid interest charges by paying each month’s statement balance in full and on-time. For these cardholders who are intent on paying no interest, having trouble paying their entire statement balance can still feel like a crisis, even though they can at least avoid going into default by paying the minimum. (It’s understandable why not being able to pay in full could cause someone consternation, given how quickly credit card interest can add up and the fact that high debts can hurt your credit score.) 

The other credit card payment problem is for those who have been carrying a balance, and are now unable to pay the minimum. These cardholders are already paying interest on their existing balance, but they are now unable to pay at all. 

How to Avoid Interest 

If you have been in the habit of avoiding all interest charges by paying your credit card balances in full each month, but are in danger of not being able to do so this month, there are some ways you might be able to continue avoiding interest charges. If your statement period hasn’t ended, you will want to avoid new spending as much as possible, or at least postpone any new purchases until your next statement period.

Next, you can try to find any purchases that are still eligible for return. Thankfully, many credit cards come with a return protection benefit that can offer you a refund if the merchant is unwilling to accept a return.

You could also consider opening a new credit card account with 0% annual percentage rate (APR) promotional financing for a limited time. These offers allow you to transfer your existing balance to a new account that doesn’t incur interest until the promotional financing period expires (usually between six and 21 months). Unfortunately, some credit card users with very high debt-to-credit ratios will not be able to qualify for these promotional financing offers. In addition, most of these cards will impose a balance transfer fee of 3% to 5% on the amount transferred — and it’s best to pay your balance off in full by the time the offers expires, otherwise you may be faced with retroactive interest. 

It’s also important to keep in mind that applying for a new balance-transfer credit card can create a hard inquiry on your credit report, which can ding your score. This may be worthwhile, if the offer will help keep your debts from snowballing, but is another reason why you’ll want to try to apply only for cards your credit score can qualify for. (You can view two of your scores for free every 14 days on Credit.com.)

How to Avoid Default 

Credit card users who are unable to meet their card’s minimum spending requirements are in risk of default, which can result in late fees, a penalty APR, severe damage to their credit and and the closure of their accounts. Needless to say, you should avoid these consequences at nearly any cost. First, you will want to prioritize all of your existing debts, trying to delay payments that might not affect your credit. You will also want to return all of the purchases that you can, and try to uncover all remaining sources of funds to meet your minimum payment.

But if you are still unable to make your minimum payment, then you will have to take steps to mitigate the consequences. You can start by contacting you card issuer and explaining the problem, including any extraordinary circumstances such as illness, divorce or job loss. This isn’t an easy conversation to have, but it’s a necessary one. And if you can get your card issuer to accept a reduced payment, then it might not affect your credit. You will also want them to waive late fees and refrain from imposing the penalty interest rate, if possible.

If you’ve contacted your card issuer and worked out the best possible payment agreement, but you are still anticipating future payment problems, then it’s time to get help. You can consider contact a local non-profit credit counseling service that can help you to examine your options going forward. The Federal Trade Commission has recommendations for choosing a credit counselor on its website. 

It’s difficult to come to grips with the possibility of missing a credit card payment, but there are some possible ways out. By exploring all of the options that are available, you can find the one that allows you to get out of this situation as quickly and easily as possible.

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This article originally appeared on Credit.com.

Drug & Alcohol Addiction Costs Americans $276 Billion a Year

Americans spend an estimated $276 billion every year drinking, smoking and taking drugs, according to a recent analysis. To give that huge figure some perspective, that’s more than the federal government spent in 2015 on education and veterans’ benefits combined.

About half of the spending goes toward alcohol and nicotine, according to the analysis by Addiction-Treatment.com, a Santa Monica, California-based organization that helps connect people with substance abuse disorders with treatment providers. The organization looked at a wide range of sources to compile their estimates, including published government figures, data analysis and news reports.

Legal drugs nicotine and alcohol accounted for more than half of the total $276 billion spent, or roughly $140 billion. Broken down, nicotine made up around 52% of the money spent while alcohol made up 48%. The analysis broke the cost of alcohol abuse into two categories: binge drinkers (who consume six drinks over a short period, once or twice per week) comprising nearly 25% of money spent on abusing alcohol, and heavy drinkers (who consume about 21 drinks spread over a week) about 23%, the analysis showed.

Non-medical prescription drugs — including pain relievers, tranquilizers and stimulants — made up almost 22% of the total drug use cost; and marijuana, cocaine, heroin and meth accounted for nearly 28% of the total. (Though marijuana is legal in some form in 23 states and Washington, D.C., it was grouped under illegal drugs for the purpose of this study.)

Even more staggering than the estimated $276 billion spent, when the costs of active addictions are combined with the costs for treatment, enforcement actions against illegal sale and use, drug-related crime, accidents and lost productivity, addiction ends up costing Americans $1 trillion a year, the analysis found. That’s enough to, among other things, give every American over the age of 18 a check for $4,000 (see graphic below), the analysis concluded.

Protect Yourself Against the Costs of Addiction

If you or someone you know is struggling with addiction, you likely already realize the costs are more than just emotional and physical. Addiction can also push people into financial ruin. If you’re an addict, consider talking to someone you trust who can help you seek the resources you need to get sober.

If you aren’t an addict, but you share accounts with someone you suspect is an alcoholic or drug addict and is not interested in recovery, it could be wise for you to consider closing your joint accounts. It’s also crucial to monitor your credit, because an addict may not be in the right mindset to feel remorse about “borrowing” your information to open new accounts or even use your your health insurance or medical information to get prescription medications. (Medical identity theft is a huge and growing problem).

You can help protect yourself by getting your free credit reports from all three bureaus annually, and you can use a service such as Credit.com to get your two free credit scores, updated every 14 days. If it appears your information has been used fraudulently, consider placing a fraud alert or credit freeze on your reports.

Even if you or someone you love isn’t struggling with addiction but is just a casual drinker, smoker or drug user, it’s good to keep in mind that the money spent on these habits could potentially instead be used for paying off debt, saving for a mortgage or even for retirement.

That isn’t to say people without addictions should stop drinking (though there are health reasons to consider stopping smoking, and legal reasons to stop taking illegal drugs); it’s more of a reminder to track your spending. Blowing your budget on excessive social outings will push you into debt if you maintain the behavior long enough, and it doesn’t make sense to jeopardize your credit rating and financial future for a few extra pints of beer (or those extra packs of cigarettes or purchases of drugs). Enjoy what you enjoy, but do it responsibly, and keep track of how it fits into the big picture, both for your budget and your health.

This article originally appeared on Credit.com.

Morty: The Startup Trying to Streamline Your Mortgage Application

In 2005, Brian Faux was working as a client relations manager at a major bank. This was years before the mortgage crisis had set in and millions of Americans lost their homes.

“I don’t think the vast majority of us had any poor intentions,” Faux, who lives in New York, said in a phone interview. But he admits the ensuing years “were a crazy time.” He remembers when he saw federal regulators take conservatorship of Fannie Mae and Freddie Mac. “People were losing their homes [by] the tens of thousands, and that’s just a really difficult situation to be in,” he said.

One would think those haunting experiences would have pushed Faux to seek a new line of work. But the 32 year old still reveres the mortgage industry. “Owning a home is still, today, and will remain for a long time for many Americans, the best way to build wealth,” he said, “and when used properly [mortgages are] a great tool for doing so.”

Last January, Faux launched a Silicon Alley startup called Morty, a full-service and fully digital mortgage broker that aims to do for homebuyers what online banking has done for consumers: Streamline the paperwork.

Now that the mortgage industry is on the right track, he said, he’s putting his 17 years of industry experience to use, employing high-tech algorithms and verifiable online data to cut down the time it takes to apply for a mortgage. “Instead of things like printing and scanning and emailing your bank statements or credit, we can do it all digitally through linked data sources,” Faux said. But will it work? Credit.com took a closer look.

How Morty Works 

Similar to Quicken Loans’ online broker service, Rocket Mortgage, which touts the idea of pushing a button and getting a pre-approval, Morty gathers borrowers’ information via an online application. After syncing accounts tied to assets, employment and so on (no self-reported data here), as well as using third parties to perform a hard credit pull, Morty brings prospective borrowers to a marketplace, where they can browse different loan products based on their financial snapshot. Up to 1,000 loan options are on offer, Faux said, and the company currently works with five lenders. (Morty is licensed in five states and Washington D.C., including Colorado, Virginia, Tennessee, Florida, and Oregon, with plans to expand to 30 by June of next year.)

The company also aims to eliminate unwanted face time. After submitting your application, you may receive a prompt “telling you to ask for advice before you select,” Faux said, but in reality, “today’s consumer is interested in doing their own research” and would rather educate themselves before stepping into a sales environment. If the borrower decides that she doesn’t want help, she can select a loan and submit her materials for processing.

The company said it can take between a week to two weeks for a consumer to sign a closing disclosure. Joe Parsons, senior loan officer at PFS Financing in Dublin, California, described it this way: “What [it sounds like] Morty is doing is gathering information from the borrower, then submitting it to the Automated Underwriting Systems. If they get an Approve/Eligible or Accept outcome, the broker sends the loan package to one of the lenders they do business with. The lender will then underwrite the file as I’ve described … what they describe appears to be the same process all lenders go through.”

Like a traditional mortgage broker, Morty earns a commission from lenders. However, “we’re uninterested in who a borrower chooses,” Faux said, stressing the lack of fees for using the service. “There is no fee to use the application, even credit, income and asset pulling [has no fee for the borrower].” He added, “We don’t fund the loan or collect payments.”

Is Getting a Mortgage This Easy? 

“Two weeks ago, we had a borrower do the whole process in nine minutes and 18 seconds,” Faux said. “It was a Friday night, and we saw a note in the system because they thought something was broken. They thought it couldn’t be that easy to get a mortgage.”

Yet perhaps the narrative that getting a mortgage is difficult is misguided, said Parsons. “As a loan originator, what I will gather from a borrower is a month’s worth of pay stubs, at least one year’s W-2s, two months of bank statements to show assets, and that’s it,” he said. “They send me those items, and in some cases I get tax returns, depending on the type of the loan. The choice is to send those to me, or push a button and get them electronically. There really isn’t a big difference, one is not less effort than another.”

Parsons also pointed out that “loan approval happens within minutes for any of us.” It’s during the underwriting process, in which application materials are more closely scrutinized, when questions tend to arise. “That’s going to be true with any loan,” he said.

However you choose to apply for a mortgage, it’s a good idea to review all your documents carefully. You may be asked to provide more paperwork than you expected or to better explain certain aspects of your application. Last-minute changes can throw a wrench into the process as well, so it’s important to be on sure footing before you begin. You can check your credit, which can affect the type of program and terms for which you may qualify, by viewing a free snapshot of your credit report on Credit.com.

 

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This article originally appeared on Credit.com.

5 Ways to Make a Small Kitchen Feel Bigger

We can’t all have a sprawling kitchen with ample storage for all our stuff and yards of counter space for prepping those elaborate meals we drool over in cooking magazines. If you have a kitchen that is not as well-appointed as you’d like, there is no need to settle for what you’re given.

It’s a good idea anytime you’re making an expensive home improvement to make sure you understand your financing options. Home owners often use home equity lines of credit (HELOC), personal loans and/or credit cards to help pay for remodels large and small, but they all come with different terms, benefits and pitfalls. For example, a credit card may have a higher interest rate than a HELOC, but if you default on the credit card debt, your home won’t be in jeopardy like it would with the HELOC.

No matter which option you pursue, you can check your credit score for free on Credit.com beforehand to see which options and interest rates you’ll qualify for. And if you spot errors on your credit, disputing them can get them fixed quickly.

Here are some ways to make the most of your small space. 

1. Island Time

If you’re lacking in storage and/or counter space but have some floor space to play with, Doug Hopeman, CEO and decorator at ArtificialPlantsandTrees.com suggests opting for an island with wheels. “Using a mobile island … can help maximize space in your kitchen. An island can be used to store and prep simultaneously, and you can move it to create more space when needed,” Hopeman said.

2. Think Beyond the Kitchen

Does everything in your kitchen have to be there 24/7? Probably not. Architect Frances Temple-West of Sargenti Architects in Philadelphia said “figure out what kitchen items you use on a daily basis and keep only those in the kitchen. Store the rest in a nearby closet. You probably only use a fraction of the kitchen gadgets and storage containers you have on a regular basis.”

It may take some trial and error to get it right, but once you have your daily-use items readily available and secondary items stored nearby, you’ll have freed up a lot of precious space.

3. Mobilize Your Bar

Along those same lines, make more room for your kitchen essentials by moving all your barware and cocktail supplies to a bar cart in another room. Hopeman said, “Bar carts offer multiple shelves and space for you to fit alcohol, glassware, and even mixers.” Overstock.com has a large range of bar carts in a variety of styles, from modern to rustic. The carts with the best storage start at around $118.

4. Put the Cabinet Doors to Work

Temple-West suggests utilizing the inside of your cabinet doors for storage.

For example, if you have more available cabinet space than floor space, try an in-cabinet trash can like the In-Cabinet Can by Simple Human ($30 at Simplehuman.com) to free up floor space. If you are lacking drawer space, use a cabinet door rack, like the Home Basics Wire Food Wrap Organizer ($12.99 at BedBathandBeyond.com) to hold tin foil and plastic wrap.

5. ‘Under’ Think It

Most kitchens have cabinets on the walls, but if you don’t have anything mounted under them you’re ignoring precious real estate! Take a good look around the room for usable space underneath a cabinet or two. Whether you use that space for an under-mounted appliance, like a microwave or toaster oven, or a wine bottle/wine glass rack, like the GGI International Sorbus 6-Bottle Wine Glass Rack ($20.99 at AllModern.com), you’ll be putting underutilized space to work.

You go see the full list of ways to make your small kitchen feel bigger on Credit.com

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This article originally appeared on Credit.com.

How to Protect Your Social Security Number After a Hack

If you clicked here just to confirm that you have nothing to worry about, sorry – there’s plenty to worry about. This is the part in the movie when the doctor takes off her mask and gloves with a defeated sigh and delivers the dreaded news: something went horribly wrong — and we’re all potentially the patient she’s talking about.

You should have already done what I am about to tell you because there’s a good chance your Social Security number has been compromised.

It’s Not About Breaches

Well, it is — but it’s not ONLY about breaches.

But first, about those breaches… More than 21 million Social Security numbers were exposed in the Office of Personnel Management (effectively the HR Department for the U.S. Government) compromise alone. Add Anthem, Premera, and Excellus and the tally of vulnerable numbers reaches more than 120 million, and that’s not including the countless smaller, documented breaches involving SSNs that have occurred over the past five years or so.

But like I said, it’s not only about breaches. Think of all the places that have your Social Security number that may not have the extra security protections of a government agency (even when that government protection is at most pretty pathetic). We’re talking about family doctors, schools, colleges, travel agents, lawyers, accountants (we both know the list is infinitely longer) and the measures taken to ensure that your SSN is not stolen are often minimal to non-existent.

When the identity theft lottery hits you, the evening news won’t be at your doorstep waiting with bated breath to hear whether or not you’re going to Disneyland. You will be miserable. The best time to act is before you are hit by identity-related crime.

Here are some tips to better protect and monitor your credit, or contain the damage in the event you detect you are having an issue.

1. Check Your Credit At Least Once a Year

You are entitled to get a free copy of your credit report from each of the credit reporting agencies at AnnualCreditReport.com. (You can also view a free credit report summary, updated every 14 days, on Credit.com.) Review it carefully for inaccurate, incomplete or unfamiliar information. If you see something that doesn’t look right, contact the fraud department of one of the three major credit reporting agencies (Equifax, TransUnion or Experian) and ask for a fraud alert to be added to your credit file. You may also want to consider a credit freeze to make sure no one (including you) can access and use your credit—unless thawed by a password or PIN. Bear in mind, you need only contact one bureau for a fraud alert, but you will have to contact each bureau to set up a credit freeze

2. Look Into Credit Monitoring

Contact your insurance agent, financial services representative or your employer’s HR department to see if they have a program that provides you access to an identity theft services provider. Many organizations have such arrangements, and many offer them free to customers, employees and members as a perk of your relationship.

If this service is unavailable to you, you can consider enrolling in a paid credit and identity-monitoring program. All three reporting agencies as well as a number of third-party resellers offer them.

3. Review Your Annual Social Security Earnings Statement

You’re looking for any suspicious activity—especially more income than you actually earned. If you find any discrepancies, immediately contact the Social Security Administration.

4. Check Your Bank & Credit Card Accounts Daily

Make sure you recognize all the transactions listed. Pay particular attention to small transactions. If you prefer a more laidback approach, which is actually even more effective, sign up for transactional monitoring alerts from your financial services institutions which can alert you to any suspicious activity in your bank, credit union or credit card accounts.

5. Review Your Explanation of Benefits Statements from Your Health Insurer

Look for any red flags like examinations, treatments or procedures that you never received. If you suspect that you are a victim of medical identity theft, immediately contact your medical provider as well as your health insurer—if your insurance was involved.

6. Contact the Authorities

If you suspect that your SSN has been used for tax-related, new account or other fraud, file a police report, then file an identity theft affidavit with the Federal Trade Commission and IRS.

7. Never Carry Your Social Security Card

Also, mask your Medicare ID (your SSN plus a letter); never provide personal information over the phone, via email or text unless you are in control of the interaction (meaning you called them) and never provide sensitive information by email or text. Store all sensitive documents on an encrypted thumb drive and shred paper files that include your SSN.

At the end of the day, it may be too late to stop an identity thief from using your Social Security number. You should assume your number is out there, and start bright and early to make sure you have all your bases covered and are ready for any contingency that comes your way.

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This article originally appeared on Credit.com.

3 Ways to Teach Kids About Money

Kids get some funny ideas about money. David Frisch, president of Frisch Financial Group in Melville, New York, co-founded an investing club at his kids’ middle school in 2014. One fifth-grade club member told his classmates that his family doesn’t worry about money because his dad has a “special thing you just buy stuff with, and you don’t have to pay for it — it’s called a credit card,” he says. “It was priceless.”

Cute or not, misconceptions about money can sprout when parents avoid the topic, as many do — 71% of parents are reluctant to discuss money with their youngsters, according to a T. Rowe Price Kids and Money survey. The good news is that kids who get opportunities to talk about finances can quickly advance from oblivious to sophisticated.

“You can start teaching your children about money from a young age, as early as 5 or 6 years old,” says Stacy Francis, president and CEO of Francis Financial in New York City. “Children are a lot more perceptive than we often think. They listen to how we speak about money, notice our attitudes towards it and what we do with it.”

She and other experts shared some ways they’ve taught their kids about money.

1. Invest pretend money

The investing club Frisch and a teacher founded, called Fantasy Stocks, had a group of about 20 kids who would meet after school every two weeks in the school’s computer lab. Each student set up a mock brokerage account with $10,000, using a free online stock simulator. They got to pit their stock portfolios against each other’s and learned to search financial sites for good and bad news on their stock picks.

Frisch’s own triplets, then 12, were enthusiastic investors in the club. “Conversations at the dinner table changed to, ‘I’m thinking about buying Apple because there’s a new phone coming out,’” he says. His daughter showed interest in the clothing company Michael Kors as a business rather than just for fashion trends.

One important investing experience in particular will likely stay with the kids for life. That first fall, the stock market performed well and many of the young investors watched their portfolios increase in value. “But in January, the market fell hard, and they quickly learned that it can go down, and it can go down big,” Frisch says. That’s a fundamental lesson that would serve any investor well.

2. Play games with money lessons

If you think about it, some of the most beloved board games revolve around financial decisions. The classic game Monopoly, for example, models real estate investing, while The Game of Life has players driving spouses and kids around the board in pastel-colored cars through a variety of financial ups and downs.

Francis, the New York City financial planner, uses her favorite board game to explain complex financial concepts to teenagers and younger kids. “One thing we like about [the game] Cash Flow for Kids is it allows kids to learn about the difference between assets and liabilities,” she says. Kids easily understand that assets are things you own, like a bike or a toy, while things you have to pay each month are liabilities — like a cable bill, she explains.

Players aim to get assets that generate income, so they can earn money without working for it. “The goal of the game is to have enough ‘passive income’ to pay for all of your expenses, so that you don’t need your salary to pay for them,” Francis says.

3. Fill out FAFSA together

When the time came to fill out her college-bound daughter’s financial aid application, Marguerita Cheng, chief executive of Blue Ocean Global Wealth in Rockville, Maryland, saw it as an opportunity to start a conversation. She suggested that the two fill out the Free Application for Federal Student Aid, or FAFSA, together. Her daughter agreed to help.

“I made her get the tax return and read off the line items,” Cheng says. Being exposed to the specifics of family finances for the first time was a learning experience. “It was eye-opening because she learned why you have to keep good records,” she says.

The first time filling out the FAFSA was a bit difficult, but doing it together has become an annual ritual and the basis for meaningful conversations about student loans, interest payments and future career plans, Cheng says. “I think she’s more aware of how much it’s costing. There’s an appreciation of what it costs for her to go to school.”

When parents find ways to talk with kids about real-life finances, it’s doing them a favor. “By teaching them about money, you are empowering them by giving them knowledge and tools they will use for the rest of their lives,” Francis says. In fact, the most important thing you can do is to start having those money conversations with your family sooner rather than later.

Jeanne Lee is a staff writer at NerdWallet, a personal finance website. Email: jlee@nerdwallet.com. Twitter: @jlee_jeanne.

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