One of the greatest disservices a parent can do for a child is to not teach them about how money works. As parents, we make sure they know the dangers of so many things like drugs, sex, guns and Fiona Apple’s music, but when was the last time you saw a commercial reminding you to talk to your kids about money?
In my family money wasn’t talked about, because it wasn’t proper to talk about money. And guess what? I ended up doing a lot of stupid things with money that I regret today. I know I am not alone in this regard. And while I do think it is a travesty that with all of the worthless shit our children learn in school there is no curriculum about money and financial matters, I don’t think that our government should be teaching anyone how to deal with money, let alone impressionable children.
Since my son is only six months old I’ve got plenty of time to get a plan in place to teach him about money. Here are some of the things I would like to do once he’s old enough:
Allow him to earn money – Whether it be with chores around the house or some simple tasks helping Mom or Dad, allow him to learn the connection between work and money will help him to appreciate his earning more in addition to his purchases.
Separate money for different goals – Managing money for different goals is useful throughout life which is why 50% goes to savings, 25% goes to spending, 10% goes to charity and 15% goes to investing. The low tech method for this is using 4 different jars or boxes, each labeled with the appropriate task, but there are also cool piggy banks out there that take this concept to heart.
Opening a savings account – Almost every major bank and credit union has some type of children’s savings account that requires only a very small amount to open. Having your child open an account and make regular deposits from their savings jar can be a really fun way to teach them how important it is to save money. Their deposit book will immediately become one of their most valued possessions.
Make him keep records – A single piece of paper would suffice here, but make sure that every deposit into the piggy bank is written as well as every amount spent. Not only will this hopefully get him in the habit of keeping clear financial records, but it will also allow him to visualize what he has done over time.
Teach him the value/pressure of a loan – If the opportunity presents itself, possibly for a large purchase he can’t afford, I will allow him to take a “loan” from me, with interest and a regular payment schedule of course. Will the car be worth it if he has to lose 25% of his allowance every week for a few months to get it? That’s a lesson with value that can’t be underestimated.
But like I said, my kid is only six months old so I’ve got a long time before I will be able to implement any of these ideas. I would however, like to know, for those of you with children, how do you teach your kids about money? Leave em’ in the comments.
Photo: somegeekintn
Tagged with: kids saving money • Money and Kids • teach kids about money