photo credit: wwarby
Have you sat down with your children and discussed the value of saving money yet? I posed the question to my twitter followers and was fascinated by some of the responses I received. I had figured that some people would have the money talk when the child was old enough to start doing chores around the house or maybe when they started asking for expensive clothes. I don’t recall the exact age, but I was probably around 7 or 8 when my parents discussed the importance of saving money for a rainy day. At the age of 7 I really didn’t need an emergency account, so all the money I earned went towards savings.
I received several comments from twitter friends that started teaching children about money management during the high school years. A couple had even started as early as 2 years old when they took the children shopping and discussed how much items cost at the store. My favorite comment came from a mother who had opened a bank account for her daughter when she was only 3 months old. Any cash gifts given at birthdays or holidays was going to go straight towards the child’s bank account.
It can be tough to teach your children about money when your child is begging for candy or a toy at the store. Taking time when you are at the dinner table or getting ready for bed to discuss how they can help them understand where money comes from. At 5 my daughter understands the concept that money is earned and that we don’t just visit the store and buy anything we want. Our toddler though doesn’t have any concept of money yet and thinks he can have anything. The beauty of diversion for a 3 year old is priceless and I will miss using some of my stealthy tactics with him in the store.
Maybe you’ve waited until your children are a little older and have the ability to take more responsibility with money. You might have conversations about working for extra money or doing chores around the house. Have you let your children make financial mistakes so they can learn from them? If your child wanted to buy $100 jeans, but it would deplete savings, would you allow it to happen?
Discussing financial situations with your children can also impact the way they look at money. Do you and your spouse communicate openly about your finances with your kids? If you are shopping for a car, do you set expectations around your budget?
What are you doing to teach your kids about saving money? Do you take time to discuss how you earn your money and what expenses you have to pay each month?
{ 2 trackbacks }
{ 5 comments… read them below or add one }
We have been teaching our son about saving money. Sometimes it’s difficult, since he doesn’t really get the whole “future” thing as a 6 year old. But we showed him how much it would cost for him to buy a toy he really wants, and compared it to how much it would cost to buy a toy he doesn’t particularly care for, and showed him how much he had, and how much longer it would take to buy the toy he really wanted. We are pleased that he decided it was worth it to save up for a couple of weeks (we will mark it on the calendar in his room so he can see progress) to get what he really wants.
Our kids have been interested in our debt-freedom process all along. They proudly announce that they are “already debt free” and ask if there are any more credit card they can have to cut up.
My opinion is you can’t start early enough to teach your kids about finances. Unfortunately I say that now but haven’t always been the best at doing that.
I know growing up that this was not a subject that was ever touched on in school (other than basic checkbooks and how to balance). However I have seen a very recent change on this and have noticed that Middle school and up seem to be offering classes about personal finance. I think this is great as it will help enforce the lesson children should be getting at home from their parents on the subject, or if children aren’t getting any direction from home at least they will not go out in the world with absolutely no financial knowledge.
Another big component I believe of teaching your children about be financially responsible is to “practice what you preach” and to talk openly with your family about your finances. It is amazing what they pick up on and how they will start to help you reach some of your financial goals.
One quick proud father moment and I’ll be quiet
About 4 years ago my wife and I got to a point that we could start an allowance program. We offered an allowance for certain chores above the basic ones they do as contributing members of the family. When we started this program (at the time with just my eldest daughter) I asked how she would like to receive her allowance each week. Her comment “please just deposit it into my savings account so it can earn interest and I won’t spend it” I almost cried…and to this day she has left it alone.
Coupon Dad
@ Maria
Great to hear your kids are getting excited about cutting up credit cards. I’ve never heard a child use the term “debt free” before. You must have some savvy financial planners in your house.
@ Zack
What a great story. I can only hope that my kids will want to save money like yours and get excited about earning interest. I did as a kid and hope to continue the fascination with compound interest.